Do You Know Which Product Metrics to Track?

From the Jason Calacanis startup checklist.

These are product-specific metrics — burn rate, runway, and financial metrics are covered separately. Focus on these four.

1. Active User Growth

Track your DAU (Daily Active Users), WAU (Weekly Active Users), and MAU (Monthly Active Users). If your product is delivering real value, these numbers should grow.

Define "active" carefully. Founders sometimes inflate this metric. Nextdoor, for example, counted anyone who opened an email as an active user in their SPAC filing — that's not good hygiene. An active user is someone who opens the app and uses it.

Model your reporting after Twitter, who only count Monetizable Active Users (mDAU). If a user can't be shown ads, they don't count. It's a conservative definition — which is exactly what makes it credible.

2. Revenue / MRR / ARR

If you're growing users and revenue is switched on, revenue should be growing too.

• MRR = Monthly Recurring Revenue
• ARR = Annual Recurring Revenue (MRR × 12)

Founders sometimes extrapolate ARR from a single good month. Instead, share the last three months of raw revenue — it shows the actual trajectory and is harder to spin.

3. CAC — Customer Acquisition Cost

How much does it cost to acquire an average customer?

David Sacks' formula: divide sales and marketing expenses from the prior month by the number of new paid customers in the current month. The one-month lag reflects the time it takes for sales and marketing spend to materialise into customers.

Great viral loops and word-of-mouth referrals acquire users for free — which is why CAC is such a powerful lever. The lower your CAC, the more efficiently you can scale.

4. LTV — Lifetime Value

How much revenue does an average customer generate over their lifetime with you?

LTV is the total revenue from a customer cohort. Divide LTV by CAC to understand your unit economics — how much profit (or loss) each new customer represents.

Churn is the biggest drag on LTV. The more value your product provides, the less often customers leave. Less churn = higher LTV = better unit economics.

David Sacks' "The SaaS Metrics That Matter" goes into further depth on these and is worth reading.