MRR and Growth Rate Are Your North Star Metrics

While there are many metrics to track in a SaaS business, two stand out as the "North Star" metrics that every founder should monitor on at least a weekly basis. They are the highest-level indicators of your company's health and trajectory.

1. Monthly Recurring Revenue (Monthly Recurring Revenue):
   • What it is: The total predictable revenue your company generates each month from all active subscriptions.
   • What it tells you: "How far have I traveled?" It is the primary measure of your company's current size and scale.
2. Month-over-month Growth:
   • What it is: The percentage increase in your Monthly Recurring Revenue from one month to the next.
   • What it tells you: "How fast am I going?" It is the primary measure of your company's velocity and growth momentum.

Lagging Indicators

It's crucial to understand that both Monthly Recurring Revenue and growth rate are lagging indicators. They tell you the result of your past actions, but they don't tell you what is going to happen in the future.

To get a predictive view of your business's health and to understand the levers that drive changes in your North Star metrics, you need to track a set of more granular, leading indicators. This is the purpose of frameworks like the The 3 High 3 Low Metrics Framework.

Tags: #SaaS #metrics #KPI #MRR #growth-rate #north-star-metric