Linear #027: Top 10 SaaS Metrics, The Story Of Shopify, What Does A Founder/CEO Actually Do?

Jul 03, 2023

I meet a lot of entrepreneurs that don't organize their software businesses around the right metrics.

Don't do that.

Here are 9 holy grail SaaS metrics to focus on:

Metric #1: Annual Recurring Revenue (ARR)

Metric #2: Net Revenue Retention (NRR)

Metric #3: ARR Growth Rate

Metric #4: Gross Logo Retention (GLR)

Metric #5: Burn Multiple

Metric #6: Customer Acquisition Cost

Metric #7: Lifetime Value

Metric #8: Length of Sales Cycle

Metric #9: Time to Value

When you go to raise a financing round or sell your business investors will look deeply at these metrics.

Every investor is different. Some look at 2 of these. Some 3.

But most derive value from all of these, along with customer interviews, NPS, market reports, and more.

SaaS Capital released a report in 2022 that derived company values and ARR multiples based on two areas - ARR Growth Rate and Net Revenue Retention.

You can see their chart here:

Happy customers lead to all of these metrics being strong.

So focus first on making your customers happy.

But don't forget to ensure everyone at your company watch these hawkishly and work to constantly improve them.

Organize your biz around them.

It makes a big difference.

one of the most exciting opportunities too few are talking about…

One Biz Story:

Click the tweet photo to view

Click the tweet photo to view