SaaS Metrics Every Founder Should Track

2026-02-19 · 32 min read

Tracking the right SaaS metrics as a founder is essential for making informed decisions about your product, pricing, and growth strategy. But many early-stage founders either track nothing or track everything. Here's what actually matters at each stage.

Pre-Launch: Validation Metrics

Before you launch, track signals that validate demand:

• Landing page conversion rate (visitors → email signups): aim for 5-15%
• Waitlist size and growth rate
• Number of customer interviews completed
• Pre-orders or letters of intent
• Community engagement on posts about your problem space

Early Stage: The Core Metrics

Once launched, these five metrics tell you everything you need to know:

MRR (Monthly Recurring Revenue)

Your most important metric. MRR = number of paying customers × average revenue per customer. Track total MRR, new MRR, expansion MRR, and churned MRR separately. MRR growth rate is the single best indicator of startup health.

Churn Rate

The percentage of customers who cancel each month. For early-stage SaaS, aim for under 5% monthly churn. High churn means your product isn't delivering enough value. Fix churn before investing in growth — it's like filling a leaky bucket.

CAC (Customer Acquisition Cost)

How much it costs to acquire one customer. Include all marketing and sales expenses. Your CAC should be significantly lower than your LTV. As a rule of thumb, aim for LTV:CAC ratio of at least 3:1.

LTV (Lifetime Value)

How much revenue a customer generates over their entire relationship with your product. Simple formula: Average Revenue Per Account / Monthly Churn Rate. LTV tells you how much you can afford to spend on acquisition.

Activation Rate

The percentage of signups who reach your "aha moment" — the point where they experience real value. A low activation rate means your onboarding is broken. Fix this before spending on growth.

Growth Stage: Scaling Metrics

• Net Revenue Retention (NRR) — Are existing customers spending more over time? Above 100% is excellent
• Payback Period — How quickly do you recover CAC? Under 12 months is good
• Viral Coefficient — How many new users does each existing user bring?
• Revenue per Employee — Efficiency metric that matters as you hire

The Foundation: Solving Real Problems

Metrics are symptoms. If your churn is high, the root cause is usually that you're not solving a painful enough problem. The best way to improve every metric is to ensure you're building for a genuine pain point.