They may sound obvious, but these words from Paul Graham, the co-founder of Viaweb and Y Combinator, have grown into a truism for startup founders:
“A startup is a company designed to grow fast.”
And if that startup is a SaaS (software as a service) company, Graham’s words could perhaps become “designed to grow really fast.”
It’s often this speed, and the resulting pressure, that leads to SaaS founders and CEOs believing they need to always have a grasp on every SaaS KPI under the sun.
The result, aside from being overwhelming and nearly impossible, is inefficiency. And inefficiency will ultimately limit growth.
This inefficiency can take many forms, but here are the three most common ways it impacts SaaS leaders:
- They spend their energy thinking about obtaining venture capital or worrying about their LTV:CAC ratio (Lifetime Value to Customer Acquisition Cost) well before they've found product-market fit;
- They’ve attained solid market traction but fail to shift some of their attention from product engagement metrics to growth metrics like annual or monthly growth rates;
- They’ve been growing fast for a while but struggle to add efficiency metrics like CAC (customer acquisition cost) Payback and Revenue per Employee.
While the SaaS community is awash in metrics, and it can seem like new SaaS KPIs are being created each day, I’ve found it helpful to organize SaaS KPIs in relation to where they are most important in these three stages of a SaaS company’s lifecycle: Product, Growth, and Efficiency.
In the video below I delve a bit deeper into this topic, and in the infographic that follows you’ll find the SaaS KPIs organized by stage. I hope you find these resources valuable.
Here’s the SaaS KPIs infographic, made with the graphic design software Venngage:
If you want to learn how Klipfolio dashboards can help you track these SaaS KPIs, visit Klipfolio.com/SaaS. And if you just want to deepen your understanding on the SaaS metrics mentioned (and then some), check out our SaaS Metrics and KPIs resource page.
Allan Wille is a Co-Founder and Chief Innovation Officer of Klipfolio. He’s also a designer, a cyclist, a father and a resolute optimist.
Originally published March 30, 2017, updated Jul, 29 2020