Tracking the right metrics can make the difference between success and failure. But which metrics truly matter? We've compiled insights from nine successful founders and investors to shed light on the key performance indicators that drive business growth at various stages. These insights are drawn from our Seed to Success podcast series, where we interview successful founders and investors about their journeys and key learnings.
Early-stage metrics: Validating product-market fit
For early-stage start-ups, the focus is often on validating product-market fit and user engagement. Andrew Jordan, founder of Connect4, emphasised the importance of leading indicators over lagging ones:
"In the first hundred customers, you need to have a lead indicator, not a lag," Andrew explained. "We ended up going with the North Star framework, which is really a product metric. For us, that was taking actions on our tool while in a meeting."
Similarly, Adam Oskwarek from Zopeful Climate tracked reach and awareness metrics in the early stages:
"We track our reach - how many people we're reaching with our online learning courses. We've reached 70 countries now, but we're mainly focused on Europe and North America."
As start-ups begin to validate their product and prepare for growth, the metrics they track often evolve. Sebastian Trif from Aurelia provided insight into this transition: "I was looking at engagement a lot. We had this weird setup where if the product is successful, you hope to see little to no usage of it because you've set up the automations they run in the background," Sebastien explained.
As Aurelia prepared for growth, Sebastian’s focus expanded: "Later on, when we hired a product marketer, I started to care a lot more about the top of the funnel side on customer acquisition. So what numbers were we getting from where we were publishing, where we were active? Were they leading to any kind of interactions outside of those platforms?"
This shift in focus highlights the evolving nature of metric tracking as a start-up transitions from early product validation to preparing for growth. It demonstrates how founders must balance product engagement metrics with early indicators of market traction and customer acquisition as they move towards the growth stage.
Growth-stage metrics: Acquisition and engagement
As start-ups validate their product and begin to scale, their focus naturally shifts from product engagement to customer acquisition and retention metrics. Piotr Pisarz, founder of Uncapped, keeps it simple: "To me, it's the number of clients we talk to every day," Piotr stated. "I believe if we talk to enough of the right customers and we offer them the right product, sooner or later they will convert."
Jonathan Gaunt, who bootstrapped and sold Xavier in just 24 months, focuses on customer acquisition and the quality of logos: "It's got to be that kind of acquisition of a new customer and probably that bit of going beyond it, just being a customer and then starting to look at their websites," Jonathan shared. "That, for me, is almost like the bit that kind of blew my mind - some of the names behind the customers that got me really excited."
Laura Beales from Tally Workspace, operating in a two-sided marketplace, tracks a variety of metrics:
- Customer acquisition cost (CAC) vs lifetime value (LTV)
- Gross merchandise value (GMV)
- Liquidity on both sides of the marketplace (active customers and venues)
- Funnel conversion rates
"GMV is super important because it's actually how much value we provide," Laura explains. "It's super important for us to know what we're giving to our suppliers." She adds, "We're kind of interested in keeping that balance and making sure that there's liquidity on both sides," referring to the importance of tracking both active customers and venues.
Later-stage metrics: Retention and profitability
As businesses mature, the focus often shifts to retention, profitability, and sustainable growth. Rory Codrington from Trust Keith emphasised Employee Net Promoter Score (eNPS): "I think that's really important because that's a catch-all for a lot of things in terms of remuneration, strategy, learning and development progression, and just general line management stuff." Other key metrics that interest Rory are Net Revenue Retention and Gross Margin: "Last year we had a really strong, I think it was like 117% net revenue retention. Our north star is anything above 100% is what good looks like…gross margin, along with NRR, is what I think makes a really healthy business," Rory explained.
This metric is crucial as it shows the profitability of the core business operations, indicating how efficiently the company can deliver its product or service.
Emma Rees from Deployed offered insights into metrics that matter for B2B enterprise solutions: "The biggest thing for us, and one of the metrics that we track within each individual customer, is how much of that project-based spend is actually coming through our platform," Emma explained.
Emma emphasised that traditional B2B metrics like user count aren't always relevant: "Those B2B traditional metrics of how many users you have on the platform just is not fit for purpose for us. So, we started saying, well, what does success look like if we want 100% of their projects coming through our platform?" This goes to show that you have to make the metrics right for your business and your application.
This approach allows Deployed to measure both depth (adoption within existing customers) and breadth (new customer acquisition) of their enterprise solution's penetration.
The investor's perspective
Audrey Miller from Tapestry VC offered valuable insight into what investors look for when evaluating start-ups: "I like to think about derivative versus integral metrics," Audrey explained. "It's really difficult to make a decision based off of an integral metric, which I would consider as total items sold, total number of users, or total revenue in a month. That tells you a snapshot of a story."
Instead, Audrey emphasised the importance of derivative metrics: "What's more interesting is derivative metrics - those metrics over time. Derivative metrics are daily active users, growth rates, changes in revenue over time, changes in margin over time. That's the stuff that I think tells a story."
Audrey also introduces the concept of "escape velocity" in start-up growth: "We like to look for what we call escape velocity. Have they figured out the flywheel? And is that flywheel rolling? In VC, we're looking at businesses that are growing quickly versus growing slowly."
This perspective highlights the importance for start-ups to not just focus on absolute numbers, but on growth trends and acceleration over time.
Conclusion
As these insights demonstrate, the metrics that matter evolve as your business grows. Early-stage start-ups should focus on product engagement and market validation. Growth-stage companies need to keep a close eye on acquisition and user engagement. Later-stage businesses must prioritise retention, profitability, and sustainable growth.
Regardless of your stage, it's crucial to identify the metrics that truly drive your business forward. By focusing on the right metrics at the right time, founders can make data-driven decisions that propel their businesses toward long-term success. Whether it's tracking product usage in the early days, measuring customer acquisition costs during growth, or monitoring net revenue retention as you scale, choosing the right metrics can illuminate the path to sustainable business growth.
Take a moment to reflect on your current metrics - are they aligned with your business stage and goals? Consider implementing one new metric from this article that resonates with your current challenges and growth aspirations.
