Which numbers matter depends on where the company is in its development.
Running a SaaS company is a discipline of timing. The number that’s decisive in Q1 of year 1 becomes noise in year 5. What looks like a success metric when you sell to 50 customers can hide a serious problem when you sell to 500.
This is a walkthrough of which numbers actually tell you something. Broken down by how far your company has come. Not all the numbers at once. The right number at the right time.
What you’re trying to find out: Will people actually use this? At this stage it’s tempting to look at growth numbers. But growth isn’t the real signal yet. The real signal is whether customers stick around and use the product.
How many of the new customers actually get going? Not “created a user”. It’s “did the thing in the product that’s the core”.
Do customers come back week after week or month after month? Or do they have to be pushed back with emails?
After 60-90 days, how many are still there? If 50% are gone after 3 months, it’s not a marketing problem. It’s a product problem.
Ask “would you be disappointed if the product disappeared tomorrow?” Over 40% very disappointed, you have something. Under 20%, you’re missing something.
How many months can you run the business on the money you have right now?
Under 6 months = the most important number in the entire company.
What you’re trying to find out: Can we create growth in a predictable way without burning too much money? Now it’s no longer about whether we have product-market fit. It’s about whether we can acquire new customers without paying more for them than they’re worth.
How much does it cost to land one paying customer? Add up all your sales and marketing spend and divide by the number of new customers. DKK 100,000 in spend + 10 new customers = DKK 10,000 in customer acquisition cost (CAC).
How much do you earn on average from a customer over the whole period they stay with you? If they typically stay 3 years and pay DKK 5,000 a month, the customer’s total value (LTV) is about DKK 180,000.
The most important number in this phase. How much value do you get back for every dime you spend on acquiring a customer?
Around 3:1 is typically healthy. Below 3:1, something is wrong. Either customer acquisition is too expensive, or customers don’t stay long enough. Well above 5:1 can be a sign that you’re holding back on growth investment.
How long does it take before the customer’s payments have covered the cost of winning the customer?
Over 18 months = something is wrong. Either CAC is too high or pricing is too low.
The number I’d spend the most time on in this phase. NRR (Net Revenue Retention) tells you whether your existing customers become more or less valuable over time. Over 100% = the same group of customers generates more revenue year over year (they upgrade, buy more). Under 100% = they shrink.
What you’re trying to find out: Is the company getting stronger as it grows? When you reach this point, the quality of growth matters more than the speed.
Growth rate + EBITDA margin should be over 40. 30% growth with -20% margin = 10 (not good). 20% growth with 25% margin = 45 (healthy).
How much of every unit of revenue is left after the cost of delivering the product? SaaS gross margins are typically 70-85%. Under 60% is a warning sign.
Last quarter’s new revenue (annualized) divided by sales + marketing cost. Over 1.0 = you earn more than you spend on selling. Under 0.5 = selling at a loss.
Regardless of stage, the most important thing is looking at your numbers by cohort, not aggregated. Aggregate numbers lie. A good cohort can mask a bad one.
Example: you signed 50 new contracts last year. 30% of them have already churned. But in aggregate your NRR looks fine because the existing customers grew a lot. If you only look at total NRR, you don’t see that an entire cohort is burning down.
30 minutes. We’ll work out which numbers actually tell you something about the company’s development.
