Continuing with 12 Key Levers of SaaS Success from David Skok at SaaStr, Mamoon Hamid gave an excellent presentation Numbers that Actually Matter. Finding Your North Star.

Here are a few notes from the presentation:

  • Quick Ratio (QR) = New MRR + Expansion MRR / Churned MRR + Contraction MRR
  • Goal is a Quick Ratio greater than 4
  • Product-market fit happens one customer at a time one month at a time
    • Mostly ignored any product-market fit metrics
  • Churn/Expansion/Contraction MRR is a lagging indicator of product-market fit
  • MRR is the price that the customer pays, the North Star is the value that they get
  • Focus on a leading indicator of the MRR decision
  • Your North Star measures the value you deliver
  • Bad: Mostly measuring price paid as opposed to value delivered
    • MRR, paid seats
  • Good: Measures value delivered in bulk
    • MAU, DAU, messages sent
  • Better: Unquestionably indicates Product Market fit has been reached with the customer
    • Number of users with L28 >= 16
    • Messages sent w/in 30 days in signup

Read the presentation Numbers that Actually Matter. Finding Your North Star. and figure out the North Star for your product.



Source: https://davidcummings.org/2017/02/10/saas-numbers-that-actually-matter/

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