KPI

What Is a KPI?

A KPI (Key Performance Indicator) is a measurable value that shows how effectively a company is achieving a key objective. KPIs convert strategy into numbers - they tell you whether what you are doing is working, and by how much.

Without KPIs, companies operate on opinions. With them, decisions are grounded in data.

KPIs vs Metrics

All KPIs are metrics, but not all metrics are KPIs. A metric is any number you track. A KPI is a metric that is directly tied to a business objective and has a target attached to it.

• Metric: page views per day
• KPI: conversion rate from landing page to signup (target: 5% by end of quarter)

Common Startup KPIs by Stage

Pre-product:

• Weekly user interviews completed
• Waitlist signups

Early product (pre-revenue):

• Daily/weekly active users (DAU/WAU)
• Activation rate
• Retention rate (Day 7, Day 30)

Post-revenue (SaaS):

• MRR and MRR growth rate
• Churn rate
• CAC and LTV
• NPS (Net Promoter Score)

Growth stage:

• Net Revenue Retention (NRR)
• Payback period
• Rule of 40

Leading vs Lagging KPIs

Lagging KPIs measure outcomes that have already happened - revenue, churn, profit. They are accurate but tell you what happened, not what will happen.

Leading KPIs measure inputs that predict future outcomes - number of demos booked, trial activations, feature adoption. They are less precise but more actionable.

The best KPI dashboards include both: lagging KPIs confirm results, leading KPIs signal what results are coming next.

Key Takeaway

A startup that tracks 3 KPIs religiously outperforms one that tracks 30 loosely. Pick the metrics that most directly reflect whether your business is healthy, set targets, review them weekly, and let them drive decisions. Everything else is noise.