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What are Startup KPIs?

A form of performance measurement is a performance indicator or key performance indicator (KPI). KPIs for early stage startups assess how well an organisation is doing or concerning a specific activity (such as projects, programmes, products, and other initiatives).

Success is sometimes defined in terms of moving closer to strategic goals, but it is frequently just the repeated, periodic achievement of some levels of operational plans. As a result, selecting the most critical KPIs for startups depends on having a solid understanding of the organisation’s priorities. The department measuring performance will often determine what is necessary; for instance, the KPIs relevant to finance will differ from those given to sales.

The decision of performance indicators is linked to many approaches to evaluate the current status of the business and its core activities since it is necessary to grasp what is important well. Applying a management framework, such as the balanced scorecard, is a popular method for selecting startup KPIs.

The Most Important Performance Metrics For Startups

CAC or Customer Acquisition Cost 

The acquiring cost of a new client, also known as customer acquisition cost, includes payroll, marketing, and sales costs. CAC is a metric used to track monthly the cost of acquiring a single customer. The lower the CAC, the less money you will spend, and the higher your gross profit will be. Also, the most important KPIs for startups is CAC.

Customers are essential to the operation and success of any organisation, but CAC should also be monitored. This startup KPI aids in determining whether there is room for investment or the costs of customer acquisition are excessive. 

Active Users

These users have interacted with the company’s product, application, or website during the allotted period (set by the company). A business’s success is assessed based on the number of active users. 

A company will develop and generate more income the more active consumers it has. When marketing is done well, it serves as the foundation for building consumer loyalty. DAU, Daily Active Users, and MAU, or Monthly Active Users, are the two main categories used to track active users. Thus, it is one of the most important KPIs for startups.

The number of active users can measure a company’s product stickiness. Additionally, it demonstrates whether or not users are engaging with it. The active user KPI measures the success or failure of the product.

Average Sales Cycle Length

It counts the overall time spent from beginning a sale to finalising the contract. The business’ sales funnel, which depicts the buyer’s whole journey from a marketing perspective, includes average sales cycle length information. Thus, it is one of the most important KPIs for startups.

Cash Runaway

It gives the company an estimate of how long its funds will last. Cash runaway aids the company in deciding whether it has to increase sales, cut costs, or locate alternative funding sources to satisfy its cash needs. Thus, it is one of the most important KPIs for startups.


KPIs for early stage startups are those analytical tools that are essential to every firm. It guarantees the company’s future expansion. Ultimately most important KPIs for startups are required when they get venture capitalists. Here is, which gives aspiring entrepreneurs a platform and points them in the right direction for fundraising. Here, they can look for potential investors, get in touch with them, and learn the information they need to make a pitch. Therefore, there is no need to worry that a particular idea won’t work. Develop solid concepts, and will assist in providing a platform for pitching to the appropriate investors. 

In the upcoming blogs, we’ll discuss The A-Z guide to startup metrics. Thus, Stay tuned!

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