KPIs are Key Performance Indicators and, in this case, startup KPIs are an affectionate term we’ve given to the things you should track right at the start of the journey to ensure you’re headed in the right direction.
Tracking stats in your business can be a job all on it’s own – there’s so much to keep an eye on, how do you know what’s important? Well, to make it a little easier we’ve written this glossary of content to help you nail your figures and, if you’re going out for investment, to show those angel investors you mean business.
CAC
Customer Acquisition Cost, i.e. How much it costs you to get one customer.
CRR
Customer Retention Rate, i.e. How long someone stays paying with you until they leave.
LTV
Lifetime Value of a customer until they leave. Shows how ‘sticky’ your product or service is.
CAC:LTV
Cost of acquisition vs lifetime value. If LTV = multiples of CAC then good.
CAC recovery time
How long it takes to recover the money spent on acquiring customer. Shorter the better.
Overheads
The company’s fixed expenses
Monthly burn
If the company is loss making, how much it’s spent vs how much it’s made in that month. I.e. If the month started with £5,000 and you finished it with £4,000 then your burn rate is £1,000
Runway
How long a company has until it runs out of money. Of course the ideal situation is sustainability which means the runway is indefinite (generally speaking) but for many startups a runway can be 6, 12, 18 months long and it’s essentially a race with yourself to become sustainable before that times runs out.
Profit margin
How much a product makes vs the cost it takes to make it
Conversion rate
What % of people you can convert to customers out of those you engage with in a sales process. E.g. If you are currently trying to close 10 people on a sale and 1 goes through, your conversion rate is 10%.
MAU
Monthly Active Users. This is mainly used for digital products, apps, website networks etc for customers/users who have been active within the last 30 days. This gives a good idea of the monetisation of a business that hasn’t monetised yet as an engaged audience are more likely to buy.
