Stop tracking 20+ vanity metrics. Learn the 6 SaaS KPIs that actually reveal product-market fit, growth efficiency, and retention strength — plus how to track them the smart way.
Most early-stage founders chase too many numbers.
They track everything — and understand nothing.
In truth, only a handful of metrics reveal whether your SaaS business is healthy, scalable, and fundable.
These are the same ones I track in my Notion dashboard every month — and the same ones investors quietly check first.
Let’s break them down.
- Revenue Momentum
Your first proof of traction isn’t a seed round — it’s steady, predictable recurring revenue.
MRR / ARR: Measure your recurring income only. Skip one-off or setup fees.
Net New MRR: The real engine — how much new recurring revenue remains after churn.
Revenue Mix: Avoid overdependence on one or two large clients. Diversification = stability.
💡 Ask yourself: Is my recurring revenue compounding each quarter — or just fluctuating?
- Retention & Expansion
Fast user growth can hide poor retention.
Great SaaS companies grow because users stay, not because they keep reselling the same promise.
Logo Retention: % of users still active after 12 months.
Net Revenue Retention (NRR): If NRR > 100%, your existing customers spend more each year than they churn.
Retention is your strongest moat. Expansion turns it into profit.
- Sales Efficiency
Every founder wants growth.
The smart ones measure how expensive that growth really is.
CAC: Cost to acquire one new customer.
Payback Period: Time to recover CAC through gross profit.
Magic Number: New ARR ÷ Last quarter’s S&M spend. Around 1 = efficient growth.
Efficiency keeps your company alive long after marketing budgets tighten.
- Profit Margins
Healthy margins separate scalable software from service-heavy models.
Gross Margin: Aim for ~75% once your product stabilizes.
Contribution Margin: Reveals if every new user truly adds profit.
If your team is doing what your product should automate — margins will expose it fast.
- Cash Efficiency
Growth means nothing if it drains your runway.
Net Burn: Cash out minus cash in.
Burn Multiple: Burn ÷ Net New ARR. Lower = better.
Capital-efficient SaaS businesses attract better investors and weather bad quarters with calm.
- Product Engagement
The most powerful metric isn’t financial — it’s behavioral.
Engagement predicts everything from renewals to word-of-mouth.
DAU/MAU Ratio: How often active users return.
Activation Rate: % of users hitting that “aha!” moment.
Feature Usage: Which actions predict upgrades or renewals.
When people use your product often, retention follows naturally.
Final Thoughts
You don’t need 20 metrics — you need clarity.
Focus on what proves traction, efficiency, and staying power:
✅ Recurring revenue that compounds
✅ Retention that strengthens
✅ Spending that scales cleanly
📊 I’ve built a Notion KPI Tracker that helps founders monitor these six metrics easily.
It’s free and customizable for any SaaS stage.
[DM me or comment — I’ll share the link.]
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