Key Metrics for Software-As-A-Service Startup

Key Metrics for Software-As-A-Service Startup

Discover and track the key metrics of your SaaS startup with this step-by-step guide by Mark MacLeod, the Startup CFO.

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Guide Overview

If you run or plan to run a subscription-based business than you need this step-by-step guide on understanding, building a business model around, and tracking the key metrics for a Software-As-A-Service (or SaaS) business.

The good news is that the SaaS industry is one of the fastest growing and most profitable industries for startups ($21B and growing at 20% per year). If properly optimized, revenue for this type of startup is predictable, scalable, and potentially exponential.

The bad news is that most entrepreneurs don't understand the key metrics that drive the success of SaaS businesses. You need to become an expert in key SaaS calculations like Cost To Acquire Customers (CAC), Monthly Recurring Revenue (MRR), customer Churn Rate, and the k-factor of your viral onboarding.

This guide covers all the basics that you'll need to plan, build, and track a high-growth business including Mark's detailed workbooks and spreadsheets used while a startup CFO and as a General Partner in RealVentures.

This guide is critical to ANY SaaS company regardless of their stage.

Guide Outline

  • Key SaaS Calculations

    • Saas Basics

    • The SaaS Business Model

    • Calculate Your Current Cost To Acquire Customer (CAC)

    • Calculate The Lifetime Value (LTV) Of Your Current Customers

    • Evaluate Your Current Business Model Results

    • Optimize The Balance Between Monetization (LTV) And Cost To Acquire Customer (CAC)

    • Calculate Your Monthly Recurring Revenue (MRR) And Average Revenue Per User (ARPU)

  • Sales Funnel And Conversion Rates

    • Track And Measure Key Website Metrics

    • Measure The Conversion Rate In The Sales Funnel

    • Calculate The Return On Investment (ROI) Of Your Marketing Campaigns

  • Revenue And Growth

    • Pricing To Win

    • Calculate And Track The Churn Rate

    • Create A Content Marketing Strategy: SEO Vs. SEM

    • Increase Average Revenue Per Customer (ARPC)

    • Increase Your Funnel Capacity

    • Calculating Viral Growth

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About The Author

Mark MacLeod

Mark MacLeod is one of Canada’s leading startup finance experts. Currently, Mark is a General Partner at Real Ventures, Canada’s largest and most active seed venture fund. Prior to that, Mark was CFO for a number of highly successful VC-backed startups including Shopify and Tungle.

Mark is a frequent blogger on funding, growing and exiting startups.

What Are People Saying

Guide Reviews (15)

Mark Heifets
Sounds very professional

- Rated this guide 5 out of 5

Miyuru Disanayaka

- Rated this guide 4 out of 5

David Speight
Great Guide - Thanks

- Rated this guide 5 out of 5

Robert Di Manno
This is a must read for any new SaaS start-up.

- Rated this guide 5 out of 5

dale sizemore
Really good practical info. Thanks for assembling it and putting important perspective on many of the topics

- Rated this guide 5 out of 5

Kevin Rapley

- Rated this guide 5 out of 5

yu zhao

- Rated this guide 5 out of 5

Chris Taylor

- Rated this guide 5 out of 5

Audrey Melnik
Great insights!

- Rated this guide 5 out of 5

Peter Shepard

- Rated this guide 4 out of 5

Joel Confino
Great information in a concise way. If you are building a SaaS startup, this gives you a framework for measuring your progress.

- Rated this guide 5 out of 5

SkinVision

- Rated this guide 4 out of 5

How to Measure marketing/sales goal

dreamgrow
What should we focus on to increase service growth across regions across companies

- Rated this guide 5 out of 5

Jim Gonzales

- Rated this guide 4 out of 5

Very useful

basedrop
An excellent and very useful project that introduces you to the SaaS terms and metrics and includes a very useful spreadsheet. I could use more pro tips. This will help my startup. Thank you.

- Rated this guide 4 out of 5