There are approximately ten thousand metrics you could track for your startup. Dashboards full of charts, weekly reports nobody reads, KPIs that seemed important when someone suggested them but now just… exist.
I’m going to argue for the opposite approach: track five things well.
These five metrics won’t tell you everything, but they’ll tell you the important things. And more importantly, you’ll actually look at them—because a metric you check weekly beats a comprehensive dashboard you ignore.
1. Cash Runway
What it is: How many months until you run out of money at your current burn rate.
Why it matters: This is survival math. Everything else is secondary if you don’t have runway.
How to calculate it:
Runway = Current Cash Balance / Monthly Net Burn
Net burn is expenses minus revenue. If you’re spending $80K/month and bringing in $30K, your net burn is $50K.
The nuance: Your burn rate isn’t static. You’re probably hiring, spending more on marketing, hopefully growing revenue. A simple runway calculation using this month’s burn rate might be misleading.
Better approach: forecast your cash balance forward, accounting for planned changes, and find the month where it hits zero. That’s your real runway.
Check it: Weekly. Seriously. I’ve seen companies suddenly realize they have three months of runway when they thought they had six. Don’t let that be you.
2. Monthly Revenue (and Growth Rate)
What it is: How much money came in this month, and how that compares to last month.
Why it matters: Revenue is the closest thing to a universal measure of whether your business is working. More revenue generally means more customers finding value in what you’re building.
How to calculate it:
Monthly Growth Rate = (This Month Revenue - Last Month Revenue) / Last Month Revenue × 100
The nuance: Not all revenue is equal. One-time vs. recurring, high-margin vs. low-margin, enterprise vs. SMB—these distinctions matter.
But for a simple dashboard, total monthly revenue and its growth rate tell you a lot. If revenue is growing, you have time to figure out the rest. If it’s flat or declining, that’s your fire alarm.
A benchmark: Early-stage startups often aim for 15-20% month-over-month growth. That’s hard to sustain but represents “things are working” territory. 5-10% is respectable. Flat is a warning sign.
Check it: Monthly, obviously. But look at the trend over 3-6 months, not just this month vs. last.
3. Gross Margin
What it is: The percentage of revenue left after subtracting the direct costs of delivering your product or service.
Why it matters: Gross margin determines how much money you have available to run the business. A company with 80% gross margins has very different economics than one with 30% margins.
How to calculate it:
Gross Margin = (Revenue - Cost of Goods Sold) / Revenue × 100
The nuance: “Cost of goods sold” trips people up. For a SaaS company, it’s typically hosting costs, payment processing fees, and customer support directly tied to serving customers. It’s not engineering salaries (that’s R&D) or sales commissions (that’s sales expense).
When in doubt, ask: “Would this cost go away if we had zero customers?” If yes, it’s probably COGS.
Benchmarks:
- SaaS: 70-85% is typical, 80%+ is good
- E-commerce: 30-50% depending on product
- Marketplaces: Varies wildly based on model
Check it: Monthly. Margins tend to be fairly stable, so big swings mean something changed—investigate.
4. Customer Acquisition Cost (CAC)
What it is: How much you spend to acquire one new customer.
Why it matters: If you’re spending more to acquire customers than they’re worth, you have a math problem that doesn’t solve itself with scale.
How to calculate it:
CAC = Total Sales & Marketing Spend / Number of New Customers
The nuance: This is where people get sloppy. “Sales and marketing spend” should include:
- Advertising
- Marketing tools and software
- Marketing team salaries (including your time if you’re doing marketing)
- Sales team salaries and commissions
- Events and sponsorships
- Content production costs
I’ve seen founders calculate CAC using only their ad spend, which dramatically understates reality.
Time period matters too. If you spend $10K on marketing this month but those leads don’t convert until next month, your CAC calculation gets weird. Some companies use a “blended” CAC averaged over several months.
Check it: Monthly, but expect noise. One big conference sponsorship can spike your CAC for a quarter.
5. Net Burn Rate
What it is: How much cash you’re consuming each month after accounting for revenue.
Why it matters: Burn rate connects your P&L to your runway. It’s the speed at which you’re moving toward either profitability or zero.
How to calculate it:
Net Burn = Total Expenses - Total Revenue
If the number is positive, you’re burning cash. If it’s negative, congratulations—you’re profitable (at least on a cash basis).
The nuance: Watch out for timing issues. A big prepaid annual contract looks like a great revenue month but won’t repeat for 12 months. A quarterly insurance payment looks like a spike in expenses but isn’t representative.
The fix: look at burn rate as a trailing 3-month average. It smooths out the noise.
Check it: Monthly, but trend it. Is burn increasing, decreasing, or stable? More importantly: is it what you planned?
Why These Five?
These metrics form a connected story:
- Runway tells you how long you have
- Revenue growth tells you if the business is working
- Gross margin tells you if the unit economics make sense
- CAC tells you if growth is efficient
- Burn rate ties it together and connects to runway
Notice what’s not on this list: vanity metrics like total signups, social followers, or “engagement.” Also not here: operational metrics that matter but aren’t existential—things like NPS scores or feature adoption rates.
Those metrics have their place. But if you’re only going to look at five things, these are the five.
Putting It Into Practice
Here’s what I’d actually do:
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Build a simple dashboard — One page, five numbers, updated monthly. This can be a spreadsheet.
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Set thresholds — What numbers would make you worry? What would make you celebrate? Write them down.
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Review weekly — Runway and burn should be weekly checks. The others are monthly but glance at revenue weekly if you can.
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Share with your team — Transparency builds trust and helps everyone make better decisions.
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Update your forecast — When actuals diverge from plan, update your projections. A forecast is only useful if it reflects reality.
One More Thing
Metrics are tools, not goals. The point isn’t to optimize the numbers—it’s to understand your business well enough to make good decisions.
I’ve seen founders game their own metrics in ways that looked good on dashboards but hurt the actual business. Don’t do that. The dashboard is there to help you see clearly, not to impress anyone.
Track these five things, understand what they’re telling you, and you’ll be ahead of most founders I’ve met.
Profitual tracks these metrics automatically as part of your forecast. See your runway, burn rate, and growth projections update in real time as you adjust your assumptions. Start free.