📊 SaaS Metrics Every Founder Should Track

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Tracking user activity and behavior is vital for almost any SaaS business, especially on its way to scale.

In this week’s edition, we focus on the essential metrics to drive your SaaS business forward.

Here’s a snapshot of what’s on the menu today:

☝️ Scaled this past week: Typedream

Buzzing news this week! 🐝🐝🐝 (I had to do it)

beehiiv acquires Typedream - it’s the scale of the week!

Tyler says the future of beehiiv includes powerful newsletters and powerful websites.

Typedream is an AI-based website builder. A fitting acquisition indeed.

• They launched out of the Y Combinator Winter 2020 Cohort.

• Were founded by 5 incredibly talented engineers.

• They won the #1 Product of the Month in July 2021 on Product Hunt.

• Typedream is currently home to tens of thousands of active websites for companies, publishers, and creators.

👉 If you want to give writing your own newsletter a shot - I cannot recommend beehiiv enough. Here is a referral link from me - when you enter the promo code “SCALABLE,” you’ll get a 30-day trial + 20% OFF for 3 months.

🧠 Deep-dive: Right metrics for the right results

Learn which metrics and KPIs can drive your business to new heights.

Tracking the right metrics is critical for the success of any SaaS company.

The trick here is to focus on what is “right” and avoid the vanity metrics as much as possible.

In my experience, here are four key metrics every SaaS founder should focus on:

Monthly Growth Rate: You should work rigorously to improve this every day, and every hour in the early days. A steady growth rate indicates healthy business scaling and market demand.

Now that company is a unicorn 🦄

Monthly Active Users (MAU)

Avoiding a number of downloads but rather focusing on MAU is a major shift in mindset.

A high MAU indicates strong user engagement and adoption, while fluctuations can signal issues with retention.

Without a reliable MAU rate, I would argue you can never justify accomplishing product-market-fit.

I genuinely enjoy some of upsilon articles in their website. I came across a pretty decent one about why it’s crucial to set some KPIs in the early days

Customer Acquisition Cost (CAC)

Keeping this cost low while driving growth is crucial to long-term success.

Understanding your CAC is vital for maintaining profitability. It’s great to onboard new users consistently, however, keeping an eye out for your avg CAC will set a baseline for monetization potential.

Customer Lifetime Value (CLTV)

CLTV estimates the total revenue a customer will generate over their lifetime.

It helps understand each customer's long-term value and informs customer acquisition strategies. This ties into a lot of financial projections as well.

A high CLTV can justify higher CAC and focus efforts on customer retention.

👉 If you’re running towards a fundraising round any time soon, keep in mind - a lot of investors care about your CAC/CLTV ratio.

In my experience, 3 is nice, 4 is sexy.

🗺️ Method: 3 Steps Make Data-Driven Decisions

Establishing a framework to enable data-driven decision-making for your startup is pretty straightforward.

3 simple steps:

1. Set Up Dashboards: To track these metrics we discussed in real time.

   👉 Ensure all relevant stakeholders have access (don’t let this become a headache).

2. Analyze Trends: Regularly analyze trends in your monthly growth rate, MAU, CAC, and CLTV.

   👉 Look for patterns and outliers to identify areas for improvement.

3. Optimize Customer Journeys: Map out customer journeys to identify bottlenecks and areas for improvement.

   👉 Do not try to reinvent the wheel here. Focus only on reducing friction points contributing to churn and improving the overall customer experience here.

Remember, customer journeys are not static. You should regularly update your journey maps based on customer feedback and behavior analysis.

I often recommend implementing changes incrementally and measuring their impact on key metrics like MAU and CLTV.

Alright then, you can ask how exactly I establish this structure for my app?

Check out the 💡 Spotlight section for one of my favorite tools to accomplish that 👇

💡 Spotlight: Mixpanel

As a PM, Mixpanel used to be my bread and butter whenever I was talking about metrics.

It’s a powerful analytics tool that helps you track every click, drop, page view, scroll (aka every user action) on the web and in mobile apps.

In the past, Mixpanel allowed me to generate pretty solid insights into MAU, retention rates, and funnel conversions.

You can set up dashboards to monitor your key SaaS metrics, implement feedback loops, and optimize customer journeys.

For instance, let’s say you have a 5-step onboarding flow and people are dropping out at Step 3. Mixpanel allows you to identify that. Do check it out!

⚾️ Catch: Waymo - Autonomous Ride Hailing

This has been an interesting Reuters article I came across recently.

In a world where everyone’s talking about Teslas left and right, Waymo’s definitely catch of the week!

Alphabet's (GOOGL.O), opens new tab Waymo said on Tuesday its autonomous ride-hailing service, Waymo One, is now available to everyone in San Francisco, nearly four years after a similar move in Phoenix, Arizona.

What that means is, now, an autonomous ride-hailing service now available to all in San Francisco, USA.

👀 I wonder what it’s gonna take for them to launch further expansions in the states and globally - one to watch out for.

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