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36 Startup metrics every SaaS founder should follow up with

Bhavik Limbani in Lifestyle, IT – Information Technology, Entrepreneurs
Mobile Apps Developer • 
36 Startup metrics every SaaS founder should follow up with

Entrepreneurship is always referred to a roller-coaster ride and the fact doesn’t come without valid reasons. When you are starting up, you don’t just start with an idea where you are creating a product or service, but you are striving to create a sustainable business and there’s much more to it. You have got to evaluate the market, raise enough money, think about growth and profitability,  and most importantly gauge your own personal growth. Until and unless you are authentic about your own conviction and see it clearly coming up along the way (no matter how small it is), you might be spending a lot of useless time working hard on vague goals. It is important to track some key metrics to turn  your startup into a profitable business. These 36 startup metrics will not just help you keep a keen eye on your business but also give you a clarity of vision of the journey ahead.

Monthly Recurring Revenue (MRR)
MRR is the total revenue that your business gets from paid customers on monthly basis. It is probably the most important metric for startups which are based on subscription model. If you get a customer on board, then prices are charged on a regular basis. You should track your MRR  and always strive for it's uplift. 

Annual Recurring Revenue (ARR)
Recurring means there’s a subscription in place and customer is charged on a recurring basis rather than on one time basis. This is calculated simply by multiplying the monthly recurring value by 12. 

Note: Calculation of ARR excludes any one-time fee or upfront cost you charge from the customer during onboarding. 

Average Revenue per Account (ARPA)
It refers to the revenue that your business earns from each account typically over a month or a year. It can also be thought of as revenue earned per customer but you should remember that a customer can have more than one account. It analyses a company's revenue generation and growth at the per-unit level and thus help investors to identify which products are high or low revenue-generators. This can immensely help your business to make decisions on rolling out of future products.

Gross Profit
Gross profit is the difference between the total revenue and the costs of goods you sell. Gross profit is the profit a company makes after deducting the costs associated with making and selling its products, or the costs associated with providing its services.

Total Contract Value
It is the projection of your booking value and helps you at times when you are planning your revenue or tracking the growth of your startup. It involves all the one-time and recurring charges and professional service fees but doesn't include usage charges.

Annual Contact Value (ACV)
ACV  measures the value of a contract over a 12-month period. So let’s say a customer commits to a 24-month contract of $160,000. Considering this money will be recognized as revenue ratably, you will have $80,000 as your ACV.

Lifetime Value (LV)
It is how much you expect to earn from a particular customer during the time they are involved with your business. For the profitability of your business, it is important that the CAC is always less than the LV. If CAC is far greater that LV, your business will require significant amount of capital to grow and run and that is no way desirable.

Deferred Revenue
Deferred revenue, or unearned revenue, refers to advance payments for products or services that are to be delivered in the future. It is considered as a liability for a business as it refers to revenue that’s not being earned and is still owed to a customer.

Billings
It is the total of current quarter revenue and he total of deferred revenue from the previous quarter.

Customer Acquisition Cost (CAC)
A startup's growth entirely depends on customer acquisition and of course, there's a significant amount of cost involved which you can't afford to neglect. It helps you to evaluate the efficiency of your sales process. If the metrics is not improving over time, you will quickly understand that there's a need to make few tweaks at steps to reduce cost and increase the number of customers involved with your startup.

Customer Concentration Risk
Any founder should be aware of the customer concentration risk especially if their business is dependent on top clients. It is the ratio between the size of the business’s top customers and the total revenue of the business. You may have a customer concentration risk if one or more of your customer’s total revenue for the year represents 8% or more of all your customers’ revenue for the same year.

Daily Active Users
Daily Active Users are the number of users who are active on your platform per day. This doesn’t include one-time users. 

Monthly Active Users
Monthly Active Users are the number of users who are active on your platform per month. This doesn’t include one-time users. This helps you understand how useful your product/service is and it is important in this case to take reviews from existing users for improvement.

Number of logins
As the name suggests, it is the number of users logging in to the account to use or view the product or service.

Activation Rate
It measures of the number of converts that your startup gets, i.e., how many prospects started using your product/service on a regular basis. It can be estimated when a user takes some kind of action like a sign up or a download. This is especially true for SaaS based products which generally work on a freemium model.

Month-on-Month Growth (MOM)
This is the average of monthly growth rate of your startup. Although investors like to see the compounded month-on-month growth as it helps to understand the periodic growth of your startup.

Compounded Monthly Growth Rate (CMGR)
It measures the return of an investment over a certain period of time. It takes three coefficients into consideration – investment’s beginning value, ending value and the time period. It is calculated simply by using the formula – {(ending value/beginning value) ^ Number of months} – 1

Monthly Churn Rate
Churn Rate is the measure of the percentage of subscribers who discontinue with their subscriptions within a given time period. Monthly Churn Rate tells you the total number of customers that you have lost in a particular month.

Retention by Cohort
One way to know if customers love your product is through Retention by Cohort. It is calculated as the percentage of original installed base i.e., in the first month, who are still engaging with your business.

Gross Churn Rate
It is the measure of the monthly recurring revenue that you lose in a month when subscribers or customers discontinue with your service.

Net Churn
It is calculated as – (MRR lost – MRR from upsells)this month/MRR at the beginning of the month. It is an important metrics to understand how well you resonate with your customers. It should descend over time and if it doesn't, it's time to first figure out the reasons.

Monthly Cash Burn Rate
It is the money that goes out of the door every month. This is one of the most complicated factors that many startups fail to understand and hence fail. To be successful, you are ought to keep a check on it.

Net Burn Rate
It is the difference between revenues and gross burn. This helps you determine how long you can survive, how close you are to break even and when and how you can start generating profits.

Gross Burn
It is a measure of all the cash outlays and monthly expenses that your startup incurs. If you are a startup with not much cash in hand, this is one of the most important factors that you should be concerned about.

Total Addressable Market (TAM)
It helps to measure the revenue opportunity available for a particular product or a service. If you are thinking to startup, don’t miss out on this criterion as this will help you to get an idea of your future prospects.

Annual Run Rate
Run Rate refers to the financial performance of your company based on current projections which acts as a predictor of future performance. It often says that the current condition may continue. It is extremely helpful in understanding how likely you are to hit your forecasts and capture latest market trends. It also helps to measure the performance of segments that are running within your startup for shorter periods of time.

Gross Margin
Gross margins are a measure of your operating profitability which gives the difference between revenue and cost of goods sold. Gross margin is an important metrics to understand at what stage of the curve your business is in and also shows you how effective your management and team are at driving the business. It also helps you to know how much money from sales is left over which you can invest in operating expenses.

Sell-Through Rate
Sell through rate = Number of units sold in a period/ Number of items at the beginning of the period

The calculation of the period (usually one month) is useful when comparing the sale of a product against another, or when comparing the sell through of a specific product from one month to another.

Network Effects
It is a phenomenon where a service or product gains value when more people start using it. It tells you how well you are capturing the market and how well off you are compared to your competitors.

Virality
Viral coefficient measures the organic growth of your startup. A startup usually gets started by referring to friends and family. If they like the product, the word spreads out and your customer base increases. Other prominent ways are through social media, email invitations and so on. One way to improve viral coefficient is by building incentives into your product which urges an existing user to share their experience leading to more traffic.

It is calculated as: 

Viral coefficient = Average number of invitations sent existing user x conversion rate of invitation

Net Promoter Score
It is defined as a tool which gives you an idea of how likely your customer is to recommend your product/service to a friend. It is an important metric to understand customer’s expectations and satisfaction.

Platform Risk
If you are too much dependent on a specific platform through which you promote or sell your idea/product, it may become a risk in the long run. It is important to take care of diversity so that you don’t just reach a wider customer base but also mitigate risk.

Direct Traffic
Direct traffic is the number of visits that your site gets directly and not through any intermediary. Example: Social media or some other website. Although there is no foolproof way to measure direct traffic, you can get a fair idea by looking at the traffic of landing pages.

Organic Traffic
Organic traffic is the traffic that comes to your website as a result of unpaid search results, your network effect, brand awareness, website's SEO and insightful contents for your target customers, As a founder, your aim should be  improving your SEO by setting practical goals and sharp content strategy.

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God’s Faithfulness Each Year

God is Always Faithful

Written by Susan on 03/01/2017
Series: Weekly Devotional
Tags: Everlasting, Promises, Through, Time, New Year
Jesus answered, “I tell you for certain that even before Abraham was, I was, and I am.”

John 8:58
One way God is not like us is that He is outside of time itself. This is not so easy for us to picture, but God explains clearly that He “inhabits eternity” in Isaiah 57:15. We're created beings living in time, so we experience time much differently than our God, who says “I am the first and I am the last.” (Isaiah 48:12). As we look forward to the New Year, how astounding it is to realize that God is already there! How can we relate to someone who says He is "the one who is and was and is coming?" (Revelation 1:8) What we experience in our lifetime has a lot to do with beginnings — and endings; Where is God in all of these times?

He Is.
We like to celebrate New Year’s Eve/Day, anniversaries, new beginnings, memories of friends and family, as well as just being in the presence of a loved one. Does God experience time as we do? Does He also like to look back and remember? Does He encourage us to make a fresh start? He does all of these things and more because He is not limited in time as we are. He lives outside of our time, but He is with us inside of our time also in the form of the Holy Spirit. “Jesus said to them, “Truly, truly I say to you, before Abraham was, I am.” (John 8:58) What does that mean? It means that Jesus is in the present with Abraham, just as He is present now with you and me. God’s faithfulness is a miracle. He is.

He Was.
God instructed the Israelites to look back on the way He had worked in their lives, to remember how He had saved them from slavery. Deuteronomy 5:15 says, “You shall remember that you were a slave in the land of Egypt, and the Lord your God brought you out of there by a mighty hand and by an outstretched arm; therefore the Lord your God commanded you to observe the Sabbath day.” We are also to remember that God’s faithfulness means that He has provided a way to save each person in the world through Jesus Christ, His Son. At just the right time (Galatians 4:4), Jesus came to give Himself as the perfect sacrifice for all sins of those who would trust his name. “By his one sacrifice he has forever set free from sin the people he brings to God” (Hebrews 10:14). He was our complete offering of sin. He has endured the suffering that sin causes and He triumphed over the raging power of sin by rising again. He was.

He Will Be.
For fellow believers, God will always be present with us in every step that we take from this point forward. He is accessible, available, listening, caring and completely present. He promised this to the Jews long ago.

In Genesis 28:15, he reminds His people of the promises in His covenant, “Behold, I am with you and will keep you wherever you go, and will bring you back to this land; for I will not leave you until I have done what I have promised you.” He also promises us through Jesus that He will always be with us: “For I am convinced that neither death, nor life, nor angels, nor principalities, nor things present, nor things to come, nor powers, nor height, nor depth, nor any other created thing, will be able to separate us from the love of God, which is in Christ Jesus our Lord.” Romans 8:39 He will be.

Pray this week:

Jesus, thank You for your promise never to leave or forsake me. You are the same yesterday, today and forever. Remind me always that You are fully present with me right now, and You promise that You always will be present in our lives fully. You are faithful. May I know Your presence in a very real way today. Amen.

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Trusting God’s Wisdom

He is Infinitely Wise

Written by Dan Lee on 10/01/2017
Series: Weekly Devotional
Tags: Wisdom, Hope, Sovereignty
Who can measure the wealth and wisdom and knowledge of God? Who can understand his decisions or explain what he does? “Has anyone known the thoughts of the Lord or given him advice?

Romans 11:33-34 CEV
We as human beings are constantly faced with tough decisions, and situations. It’s the nature of living in a fallen world. However, through all of the turmoil, God is still sovereign and is truly wise.

If we doubt that God has infinite wisdom, we will be tempted to despair when things go wrong. On the other hand, understanding God’s wisdom helps us to trust Him and be secure in any situation.

Here are some areas we see God’s wisdom demonstrated, and why you should trust his Wisdom:

Creation – Past and Present
By wisdom the Lord founded the earth; by understanding he created the heavens. (Proverbs 3:19)

From the distant galaxies to the tiniest insect, everything we see is a product of God’s perfect design, not random chance. Every area of human knowledge, from mathematics to physics to biology, is just a tiny sliver of God’s great wisdom. All of our study in these and other fields, is an attempt to discover more of the wonders of His creation. “The heavens keep telling the wonders of God, and the skies declare what He has done.” (Psalm 19:1)

Some people believe that God created the world, then left us to fend for ourselves. But Colossians 1:17 says this about Jesus: “God’s Son was before all else, and by him everything is held together.” (Colossians 1:17)

Human History
If the presence of evil rulers bothers you, think of Pharaoh, who was cruel and oppressive to God’s people. Yet, “In the Scriptures the Lord says to Pharaoh of Egypt, 'I let you become Pharaoh, so that I could show you my power and be praised by all people on earth.'” (Romans 9:17). Yes, even Pharaoh, the wicked oppressor of Israel, was appointed by God to bring glory to Himself. And so it continues with today’s kings and kingdoms. God is still in control.

Our Relationship to God
One of the most “foolish” things to many people is the idea that God came to earth in human form, and then willingly allowed himself to be killed for the salvation of mankind. Yet 1 Corinthians 1:25 says that God’s “foolishness” is greater than human wisdom.

In His infinite wisdom, God sent Jesus to die for your sins. All God's children should take great comfort from this. Those who have not yet decided to follow Him should realize that His plan of salvation, strange or even foolish as it may seem, is true and is intended for you. Humbly accept that God is infinitely great and wise, and seek to follow Him.

Pray this week:

Lord, forgive me for thinking I know better than You. Even though I can barely see or understand Your greatness, by faith I submit to Your great wisdom and Your plan for my life. Teach me through Your word to understand more and more, and to walk in greater confidence every day.

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If God is Good, Why Don’t I Have Enough Money?

How and When Can I Claim the Promise, “God will supply all your needs?”

Written by GodLife on 25/10/2015
Series: Weekly Devotional
Tags: Benevolence, Giving, Money, Poverty, Providence, Provision, Riches, Unemployment, Work
“And this same God who takes care of me will supply all your needs from his glorious riches, which have been given to us in Christ Jesus.” Philippians 4:19

It’s shameful when someone says, “You are poor because you do not have enough faith.” The Bible says when they make godliness a way to get rich, they have “corrupt minds” and “have turned their backs on the truth.” (1 Timothy 6:5-6) David did say, “I have been young and now I am old, yet I have not seen the righteous abandoned or his children begging for bread.” (Psalm 37:25) But there’s a big difference between “wealth” and “begging for bread.” How can you keep from missing out on all your loving Father has for you?

Put His Kingdom First
“God will supply all your needs” was the Apostle Paul’s promise to those supporting his missionary work. He went to plant a church elsewhere and they sent him money more than once. (See Philippians 4:15-16) We can’t claim that promise in every case. “But seek first the kingdom of God and His righteousness, and all these things will be provided for you.” (Matthew 6:33). There’s a condition: God wants to come first in your life — every part it. Including finances, relationships and entertainment.

Watch How He Provides For Others
Another great provision promise is in 2 Corinthians 9. This also is for those who put His Kingdom first: “Now the One who provides seed for the sower and bread for food will provide and multiply your seed and increase the harvest of your righteousness. You will be enriched in every way for all generosity, which produces thanksgiving to God through us. ” (2 Corinthians 9:10-11). In other words, they can watch how God provides for His work to see that He will provide for them as well.

Ask How Much Is Really Enough
Desire for riches is a snare. (1 Timothy 6:9-10) Following Jesus begins with embracing a cross. (Luke 9:23) “…the Son of Man has no place even to lay his head.” (Luke 9:58) Although Jesus had His physical needs met, He was poor (2 Corinthians 8:9) by this world’s standards. Here He told His followers that the things others think are “essential” are not part of any guarantee for the righteous. But we, through His poverty, become rich with “an eternal inheritance, held in reserve in heaven, that will never fade or fail.” (1 Peter 1:4)

Pray this week:

God, I know you are good: you gave your only Son so that I could have eternal life! Please give me your view of what is enough for me and help me be content.

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