Investors in SaaS are lucky to have plenty of metrics to measure, because those metrics are good proxies for important business decisions.

When do you hit product market-fit? How do you grow in the future? How much capital should you raise? You can look at metrics to answer that!

About this series

This series of articles are drafted from our experience at Point Nine Capital on the top priorities for early-stage SaaS companies. Note that though more relevant for startups who focus on SMBs first and then go upmarket, the priorities are general enough to apply to most SaaS companies.

Looking top down, for SaaS companies everything is about growth and retention — capital efficiency is also important, but for VC-funded companies, that’s subordinated to the other two.

If it’s about growth and retention, what are the metrics that reflect?

Clearly, MRR Growth and Churn are the kings.

But depending on the stage of your company, you face different challenges:

(1) Series A+ Company

The more mature the company, the larger the number of metrics and sub-metrics that are measurable and meaningful.

You can look at MRR growth as the result of (a) growth at the top of the funnel, (b) the different conversions in the funnel, (c) the ARPAs of different account sizes, (d) the degrees of expansion, etc.

Once your funnel is bigger, an apparently small optimization can have significant results at the bottom. The challenge here is not about getting access to the data, but rather segmenting it and making the right attributions.

(2) Seed Stage

At a very early stage, you will not have enough data to calculate those metrics.

Or if you have it, they will be not statistically relevant or very volatile.

But even if you’re not able to measure them accurately, you can find good proxies for them.

Metrics for Seed Stage

At an early stage, you can only measure the actions you do, the inputs — you can write blog posts, you can send emails to potential customers, etc. — because you still don’t have enough data to have expectations about the results, the outputs — volumes, conversions, etc.

At this stage, when you choose what to measure, you should look for stuff that is actionable in the short term.

The feedback between your input and the output should come quickly, like in the following examples:

Content marketing:

Measurable Input : you can control how many blog posts you write and how much effort you put to distribute it.

Measurable Output: number of visitors.

Feedback loop and Uncertainty : You still don’t know how many visitors every post will generate, but in first couple of days after publishing a post you will have a good approximation for that.

: you can control how many blog posts you write and how much effort you put to distribute it. number of visitors. : You still don’t know how many visitors every post will generate, but in first couple of days after publishing a post you will have a good approximation for that. Cold-calling:

Measurable Input : how many emails sent

Measurable Output: how many replies

Feedback loop and Uncertainty : You will quickly see open rates and experience the % of reply rates. Then, you can start iterating and A/B testing different approaches.

: how many emails sent how many replies : You will quickly see open rates and experience the % of reply rates. Then, you can start iterating and A/B testing different approaches. …

At this stage, the only thing you can measure is the effort you put. Sometimes the results will be correlated with that, sometimes not.

But if you don’t have a clear framework on what direction you want to go, you can put effort and don’t get the right results.

Since this is series of posts is about prioritisation, here the 3 key topics I suggest measuring: