What are the best startup metrics and KPIs to differentiate yourself?

1 The difference between metrics and KPIs

Metrics and KPIs are often used interchangeably, but they are not exactly the same. Metrics are quantitative indicators that measure various aspects of your startup, such as revenue, growth, retention, or engagement. KPIs are key performance indicators that align with your specific goals and objectives, and show how well you are achieving them. For example, your metric might be monthly active users, but your KPI might be the percentage of users who complete a certain action or reach a certain level.

2 The criteria for choosing the best metrics and KPIs

When selecting the best metrics and KPIs for your startup, you must take into account several criteria, such as relevance, actionability, simplicity, and consistency. The metric or KPI should reflect your core value proposition and the problem you are solving for your customers. It should also enable you to make data-driven decisions and improve your product or service based on feedback. Moreover, it should be easy to understand and communicate without complex calculations or explanations. Finally, it should be measured and reported in the same way over time without changing the definition or method.

3 The types of metrics and KPIs for different stages

Depending on the stage of your startup, you might need to focus on different types of metrics and KPIs. For example, during pre-launch you may want to measure customer discovery, problem-solution fit, and product-market fit metrics such as customer interviews, surveys, landing page conversions, or minimum viable product (MVP) feedback. When launching your product or service to the market and acquiring your first customers, metrics and KPIs related to customer acquisition, activation, and retention may be important to measure, such as cost per acquisition (CPA), customer lifetime value (LTV), churn rate, or net promoter score (NPS). During the growth stage of your startup when scaling up and reaching more customers, metrics and KPIs related to customer growth, revenue, and profitability may be useful to track, such as monthly recurring revenue (MRR), gross margin, customer acquisition cost (CAC), or return on investment (ROI).

4 The examples of metrics and KPIs for different sectors

Depending on the sector of your startup, you might need to track different metrics and KPIs that are specific to your industry or niche. For instance, e-commerce startups should monitor metrics such as average order value (AOV), conversion rate, cart abandonment rate, or customer satisfaction rate. On the other hand, software as a service (SaaS) startups should focus on daily active users (DAU), monthly active users (MAU), average revenue per user (ARPU), or feature adoption rate. Finally, social media startups should pay attention to user-generated content, interaction, and virality metrics such as posts, comments, likes, shares, or referrals.

5 The tools for measuring and managing metrics and KPIs

Once you have defined your metrics and KPIs, you need to find the right tools to measure and manage them. Analytics tools, such as Google Analytics, Mixpanel or Amplitude, can help you collect and analyze data as well as visualize it. Dashboards like Klipfolio, Geckoboard or Tableau can help you create and display your metrics and KPIs in an understandable way. Reporting tools like Databox, Slidebean or Pitch can aid in communicating and sharing your metrics and KPIs with stakeholders. With the abundance of tools available for different purposes and budgets, you are sure to find the right one for your needs.

6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?