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startup-metrics-framework

startupmetricssaasbusiness growthunit economicscac ltvfundraisingperformance optimization
36.8k📄 MIT🕒 2026-06-16Source ↗

Install this skill

npx skills add wshobson/agents

Works across Claude Code, Cursor, Codex, Copilot & Antigravity

The Startup Metrics Framework provides a standardized methodology for measuring business performance across various stages of growth. It moves beyond vanity numbers to prioritize unit economics, capital efficiency, and model-specific health indicators. By applying consistent formulas for MRR, ARR, churn, and burn, you can evaluate whether your current growth trajectory justifies your existing spend. This skill categorizes metrics into distinct groups including SaaS-specific retention, marketplace liquidity, and general cash runway calculations. It serves as a diagnostic tool for founders and operators who need to quantify their progress for stakeholders or internal decision-making. Instead of relying on qualitative intuition, this framework allows you to pin down exactly where a business model is leaking value, enabling data-backed pivots and objective assessments of operational efficiency during the critical transition from seed to series-level scaling.

When to Use This Skill

  • Preparing a slide deck for a Series A fundraising round
  • Auditing monthly churn to identify if pricing or product quality is the issue
  • Determining if your marketplace needs more supply-side or demand-side marketing
  • Assessing if current marketing spend is yielding a sustainable LTV:CAC ratio

How to Invoke This Skill

Example prompts that trigger this skill in Claude Code, Cursor, or Antigravity:

  • Calculate my current CAC payback period
  • What is my NDR and is it healthy?
  • Evaluate if my burn multiple is efficient
  • Analyze marketplace liquidity metrics
  • Does my DAU/MAU ratio indicate a daily habit?

Pro Tips

  • 💡Always specify your business model (e.g., SaaS, marketplace, consumer) when asking, as metrics definitions and benchmarks can vary significantly.
  • 💡Combine metric calculations with scenario analysis (e.g., 'What if churn decreases by 10%?') for deeper insights into potential impact.
  • 💡Request real-world examples or industry benchmarks to contextualize your own metrics against successful companies.

What this skill does

  • Calculates unit economics including LTV, CAC, and payback period
  • Analyzes SaaS growth efficiency via Rule of 40 and Magic Number
  • Monitors marketplace health through take rates and supply/demand ratios
  • Computes financial runway based on monthly net burn rates
  • Tracks user engagement for mobile apps using DAU/MAU ratios

When not to use it

  • When you lack reliable raw data for revenue, customer acquisition costs, or user activity
  • For early-stage ideation where product-market fit has not yet been validated

Example workflow

  1. Input your monthly revenue, expense, and customer acquisition data
  2. Apply the unit economics formulas to verify your LTV:CAC ratio
  3. Cross-reference your retention results against sector-specific benchmarks
  4. Compare your burn multiple against your current growth rate
  5. Generate a summary report highlighting which metrics exceed or fall behind industry targets

Prerequisites

  • Verified monthly revenue logs
  • Categorized marketing and sales expenditure data
  • Clean customer acquisition and churn tracking records

Pitfalls & limitations

  • !Miscalculating LTV by using incorrect churn or gross margin estimates
  • !Focusing on vanity metrics like total signups while ignoring retention
  • !Using benchmarks from the wrong stage, such as applying Series B targets to a pre-revenue seed startup

FAQ

What is the difference between Gross and Net Dollar Retention?
Gross retention ignores expansion revenue and only measures how much ARR is lost to churn or downgrades. Net Dollar Retention includes expansion, giving a clearer picture of whether your existing customers are growing in value.
Why is the Burn Multiple considered better than just looking at the total burn?
Burn Multiple connects your spending to your growth by showing how much cash you use to create each dollar of new ARR, revealing if your spending is actually efficient.
What should I do if my LTV:CAC ratio is below 1.0?
This indicates that you are losing money on every customer you acquire. You must immediately stop scaling paid acquisition until you either lower your CAC or increase your LTV.

How it compares

While a generic LLM prompt might provide broad definitions, this framework enforces standardized industry formulas and provides specific benchmark ranges to give you an objective verdict on your performance.

Source & trust

37k stars📄 MIT🕒 Updated 2026-06-16
📄 Full skill instructions — original source: wshobson/agents
# Startup Metrics Framework

Comprehensive guide to tracking, calculating, and optimizing key performance metrics for different startup business models from seed through Series A.

## Overview

Track the right metrics at the right stage. Focus on unit economics, growth efficiency, and cash management metrics that matter for fundraising and operational excellence.

## Universal Startup Metrics

### Revenue Metrics

**MRR (Monthly Recurring Revenue)**

MRR = Σ (Active Subscriptions × Monthly Price)


**ARR (Annual Recurring Revenue)**

ARR = MRR × 12


**Growth Rate**

MoM Growth = (This Month MRR - Last Month MRR) / Last Month MRR
YoY Growth = (This Year ARR - Last Year ARR) / Last Year ARR


**Target Benchmarks:**

- Seed stage: 15-20% MoM growth
- Series A: 10-15% MoM growth, 3-5x YoY
- Series B+: 100%+ YoY (Rule of 40)

### Unit Economics

**CAC (Customer Acquisition Cost)**

CAC = Total S&M Spend / New Customers Acquired


Include: Sales salaries, marketing spend, tools, overhead

**LTV (Lifetime Value)**

LTV = ARPU × Gross Margin% × (1 / Churn Rate)


Simplified:

LTV = ARPU × Average Customer Lifetime × Gross Margin%


**LTV:CAC Ratio**

LTV:CAC = LTV / CAC


**Benchmarks:**

- LTV:CAC > 3.0 = Healthy
- LTV:CAC 1.0-3.0 = Needs improvement
- LTV:CAC < 1.0 = Unsustainable

**CAC Payback Period**

CAC Payback = CAC / (ARPU × Gross Margin%)


**Benchmarks:**

- < 12 months = Excellent
- 12-18 months = Good
- > 24 months = Concerning

### Cash Efficiency Metrics

**Burn Rate**

Monthly Burn = Monthly Revenue - Monthly Expenses


Negative burn = losing money (typical early-stage)

**Runway**

Runway (months) = Cash Balance / Monthly Burn Rate


**Target:** Always maintain 12-18 months runway

**Burn Multiple**

Burn Multiple = Net Burn / Net New ARR


**Benchmarks:**

- < 1.0 = Exceptional efficiency
- 1.0-1.5 = Good
- 1.5-2.0 = Acceptable
- > 2.0 = Inefficient

Lower is better (spending less to generate ARR)

## SaaS Metrics

### Revenue Composition

**New MRR**
New customers × ARPU

**Expansion MRR**
Upsells and cross-sells from existing customers

**Contraction MRR**
Downgrades from existing customers

**Churned MRR**
Lost customers

**Net New MRR Formula:**

Net New MRR = New MRR + Expansion MRR - Contraction MRR - Churned MRR


### Retention Metrics

**Logo Retention**

Logo Retention = (Customers End - New Customers) / Customers Start


**Dollar Retention (NDR - Net Dollar Retention)**

NDR = (ARR Start + Expansion - Contraction - Churn) / ARR Start


**Benchmarks:**

- NDR > 120% = Best-in-class
- NDR 100-120% = Good
- NDR < 100% = Needs work

**Gross Retention**

Gross Retention = (ARR Start - Churn - Contraction) / ARR Start


**Benchmarks:**

- > 90% = Excellent
- 85-90% = Good
- < 85% = Concerning

### SaaS-Specific Metrics

**Magic Number**

Magic Number = Net New ARR (quarter) / S&M Spend (prior quarter)


**Benchmarks:**

- > 0.75 = Efficient, ready to scale
- 0.5-0.75 = Moderate efficiency
- < 0.5 = Inefficient, don't scale yet

**Rule of 40**

Rule of 40 = Revenue Growth Rate% + Profit Margin%


**Benchmarks:**

- > 40% = Excellent
- 20-40% = Acceptable
- < 20% = Needs improvement

**Example:**
50% growth + (10%) margin = 40% ✓

**Quick Ratio**

Quick Ratio = (New MRR + Expansion MRR) / (Churned MRR + Contraction MRR)


**Benchmarks:**

- > 4.0 = Healthy growth
- 2.0-4.0 = Moderate
- < 2.0 = Churn problem

## Marketplace Metrics

### GMV (Gross Merchandise Value)

**Total Transaction Volume:**

GMV = Σ (Transaction Value)


**Growth Rate:**

GMV Growth Rate = (Current Period GMV - Prior Period GMV) / Prior Period GMV


**Target:** 20%+ MoM early-stage

### Take Rate

Take Rate = Net Revenue / GMV


**Typical Ranges:**

- Payment processors: 2-3%
- E-commerce marketplaces: 10-20%
- Service marketplaces: 15-25%
- High-value B2B: 5-15%

### Marketplace Liquidity

**Time to Transaction**
How long from listing to sale/match?

**Fill Rate**
% of requests that result in transaction

**Repeat Rate**
% of users who transact multiple times

**Benchmarks:**

- Fill rate > 80% = Strong liquidity
- Repeat rate > 60% = Strong retention

### Marketplace Balance

**Supply/Demand Ratio:**
Track relative growth of supply and demand sides.

**Warning Signs:**

- Too much supply: Low fill rates, frustrated suppliers
- Too much demand: Long wait times, frustrated customers

**Goal:** Balanced growth (1:1 ratio ideal, but varies by model)

## Consumer/Mobile Metrics

### Engagement Metrics

**DAU (Daily Active Users)**
Unique users active each day

**MAU (Monthly Active Users)**
Unique users active each month

**DAU/MAU Ratio**

DAU/MAU = DAU / MAU


**Benchmarks:**

- > 50% = Exceptional (daily habit)
- 20-50% = Good
- < 20% = Weak engagement

**Session Frequency**
Average sessions per user per day/week

**Session Duration**
Average time spent per session

### Retention Curves

**Day 1 Retention:** % users who return next day
**Day 7 Retention:** % users active 7 days after signup
**Day 30 Retention:** % users active 30 days after signup

**Benchmarks (Day 30):**

- > 40% = Excellent
- 25-40% = Good
- < 25% = Weak

**Retention Curve Shape:**

- Flattening curve = good (users becoming habitual)
- Steep decline = poor product-market fit

### Viral Coefficient (K-Factor)

K-Factor = Invites per User × Invite Conversion Rate


**Example:**
10 invites/user × 20% conversion = 2.0 K-factor

**Benchmarks:**

- K > 1.0 = Viral growth
- K = 0.5-1.0 = Strong referrals
- K < 0.5 = Weak virality

## B2B Metrics

### Sales Efficiency

**Win Rate**

Win Rate = Deals Won / Total Opportunities


**Target:** 20-30% for new sales team, 30-40% mature

**Sales Cycle Length**
Average days from opportunity to close

**Shorter is better:**

- SMB: 30-60 days
- Mid-market: 60-120 days
- Enterprise: 120-270 days

**Average Contract Value (ACV)**

ACV = Total Contract Value / Contract Length (years)


### Pipeline Metrics

**Pipeline Coverage**

Pipeline Coverage = Total Pipeline Value / Quota


**Target:** 3-5x coverage (3-5x pipeline needed to hit quota)

**Conversion Rates by Stage:**

- Lead → Opportunity: 10-20%
- Opportunity → Demo: 50-70%
- Demo → Proposal: 30-50%
- Proposal → Close: 20-40%

## Metrics by Stage

### Pre-Seed (Product-Market Fit)

**Focus Metrics:**

1. Active users growth
2. User retention (Day 7, Day 30)
3. Core engagement (sessions, features used)
4. Qualitative feedback (NPS, interviews)

**Don't worry about:**

- Revenue (may be zero)
- CAC (not optimizing yet)
- Unit economics

### Seed ($500K-$2M ARR)

**Focus Metrics:**

1. MRR growth rate (15-20% MoM)
2. CAC and LTV (establish baseline)
3. Gross retention (> 85%)
4. Core product engagement

**Start tracking:**

- Sales efficiency
- Burn rate and runway

### Series A ($2M-$10M ARR)

**Focus Metrics:**

1. ARR growth (3-5x YoY)
2. Unit economics (LTV:CAC > 3, payback < 18 months)
3. Net dollar retention (> 100%)
4. Burn multiple (< 2.0)
5. Magic number (> 0.5)

**Mature tracking:**

- Rule of 40
- Sales efficiency
- Pipeline coverage

## Metric Tracking Best Practices

### Data Infrastructure

**Requirements:**

- Single source of truth (analytics platform)
- Real-time or daily updates
- Automated calculations
- Historical tracking

**Tools:**

- Mixpanel, Amplitude (product analytics)
- ChartMogul, Baremetrics (SaaS metrics)
- Looker, Tableau (BI dashboards)

### Reporting Cadence

**Daily:**

- MRR, active users
- Sign-ups, conversions

**Weekly:**

- Growth rates
- Retention cohorts
- Sales pipeline

**Monthly:**

- Full metric suite
- Board reporting
- Investor updates

**Quarterly:**

- Trend analysis
- Benchmarking
- Strategy review

### Common Mistakes

**Mistake 1: Vanity Metrics**
Don't focus on:

- Total users (without retention)
- Page views (without engagement)
- Downloads (without activation)

Focus on actionable metrics tied to value.

**Mistake 2: Too Many Metrics**
Track 5-7 core metrics intensely, not 50 loosely.

**Mistake 3: Ignoring Unit Economics**
CAC and LTV are critical even at seed stage.

**Mistake 4: Not Segmenting**
Break down metrics by customer segment, channel, cohort.

**Mistake 5: Gaming Metrics**
Optimize for real business outcomes, not dashboard numbers.

## Investor Metrics

### What VCs Want to See

**Seed Round:**

- MRR growth rate
- User retention
- Early unit economics
- Product engagement

**Series A:**

- ARR and growth rate
- CAC payback < 18 months
- LTV:CAC > 3.0
- Net dollar retention > 100%
- Burn multiple < 2.0

**Series B+:**

- Rule of 40 > 40%
- Efficient growth (magic number)
- Path to profitability
- Market leadership metrics

### Metric Presentation

**Dashboard Format:**

Current MRR: $250K (↑ 18% MoM)
ARR: $3.0M (↑ 280% YoY)
CAC: $1,200 | LTV: $4,800 | LTV:CAC = 4.0x
NDR: 112% | Logo Retention: 92%
Burn: $180K/mo | Runway: 18 months


**Include:**

- Current value
- Growth rate or trend
- Context (target, benchmark)

## Additional Resources

### Reference Files

- **references/metric-definitions.md** - Complete definitions and formulas for 50+ metrics
- **references/benchmarks-by-stage.md** - Target ranges for each metric by company stage
- **references/calculation-examples.md** - Step-by-step calculation examples

### Example Files

- **examples/saas-metrics-dashboard.md** - Complete metrics suite for B2B SaaS company
- **examples/marketplace-metrics.md** - Marketplace-specific metrics with examples
- **examples/investor-metrics-deck.md** - How to present metrics for fundraising

## Quick Start

To implement startup metrics framework:

1. **Identify business model** - SaaS, marketplace, consumer, B2B
2. **Choose 5-7 core metrics** - Based on stage and model
3. **Establish tracking** - Set up analytics and dashboards
4. **Calculate unit economics** - CAC, LTV, payback
5. **Set targets** - Use benchmarks for goals
6. **Review regularly** - Weekly for core metrics
7. **Share with team** - Align on goals and progress
8. **Update investors** - Monthly/quarterly reporting

For detailed definitions, benchmarks, and examples, see references/ and examples/.

How to Use This Skill Unit

Option A: Project-Specific (Recommended)

  1. Click "Download" above
  2. In your project, create the directory: .agent/skills/startup-metrics-framework/
  3. Save the file as SKILL.md
  4. The agent will automatically discover the skill based on its description.

Option B: Global Installation (All Agents)

Save the file to these locations to make it available across all projects:

  • Claude Code: ~/.claude/skills/wshobson/agents/startup-metrics-framework/SKILL.md
  • Cursor: ~/.cursor/skills/wshobson/agents/startup-metrics-framework/SKILL.md
  • Antigravity: ~/.gemini/antigravity/skills/wshobson/agents/startup-metrics-framework/SKILL.md

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How to use this Skill in Claude Code & Cursor

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Source & attribution

This skill is categorized under Marketing & Growth and is published by W. Shobson, maintained in wshobson/agents.

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