Want to know how much website downtime costs, and the impact it can have on your business?
Find out everything you need to know in our new uptime monitoring whitepaper 2021
SaaS companies have many metrics available to measure their performance. The question is – which ones should you choose? There is no one ideal metric that you should use, and you can’t measure every available metric at the same time. Depending on where you are on your company’s growth path, there are different things you need to measure to get a handle on your company’s health. That is why it is so important to focus on a specific metric at each stage to ensure you are heading in the right direction.
Of course, you need to know which growth stage you are at to know which metric to use. Sometimes it is tricky to determine this, but it is crucial to know where you are on the growth path to avoid miscalculations that can cause your company to falter. Some companies overestimate their growth stage and try to scale up too quickly. If you act as if your company is at a higher stage than it is and do not use the metrics that are appropriate to your actual size, you will not have a sustainable business. Here are the five growth stages of a SaaS company and the appropriate metrics to use at each stage.
Very early stage
At this stage, you are building a business from the ground up, so you want to validate that you have a viable service that someone is willing to buy. You want to measure unaffiliated conversions – no friends or family members included, If you can get ten paying customers, that is a good indicator that you have a viable concept.
Early stage
At this stage, you’re trying to determine if you have a business that is economically sustainable. You need to measure your customer’s lifetime value (LTV) and your customer acquisition cost (CAC), and then calculate the ratio of LTV to CAC. The ratio needs to be at least 3 to 1 for your company to be profitable. If it’s not, your company is not sustainable.
Bridging stage
At this stage, you’re making sure that your business strategy is solid before you begin to scale-up and grow. You want to have a repeatable sales process in place, and you want to have an effective lead generation strategy. You want to measure your monthly recurring revenue (MRR) and be sure you are meeting your revenue goals.
Growth and scale stage
At this stage, you want to measure your customer retention rate to see if you are building customer loyalty. You want your MRR gain from new customers to exceed your MRR loss from customers who stop buying your service. It’s much harder to replace lost customers as you grow, so you need to focus on providing excellent service and keeping your retention rate high.
Maturity stage
At this stage, you want to measure accurately your recognized revenue, which is the revenue you have received from customers for services you have delivered to them. You want to make sure you don’t include deferred revenue since you would be overstating your profitability, which could lead you to make unsound financial decisions.
Grow your company one step at a time, and use the appropriate metric at each step.
StatusCake Team
Share this
More from StatusCake
Buy vs Build in the Age of AI (Part 2)
6 min read The Real Cost of Owning Monitoring Isn’t Code — It’s Everything Else In Part 1, we explored how AI has dramatically reduced the cost of building monitoring tooling. That much is clear. You can scaffold uptime checks quickly, generate alert logic in minutes, and set-up dashboards faster than most teams used to schedule the kickoff
James Barnes
March 11, 2026
Buy vs Build in the Age of AI (Part 1)
5 min read AI Has Made Building Monitoring Easy. It Hasn’t Made Owning It Any Easier. A few months ago, I spoke to an engineering manager who proudly told me they had rebuilt their monitoring stack over a long weekend. They’d used AI to scaffold synthetic checks. They’d generated alert logic with dynamic thresholds. They’d then wired everything
James Barnes
March 4, 2026
Alerting Is a Socio-Technical System
3 min read In the previous posts, we’ve looked at how alert noise emerges from design decisions, why notification lists fail to create accountability, and why alerts only work when they’re designed around a clear outcome. Taken together, these ideas point to a broader conclusion. That alerting is not just a technical system, it’s a socio-technical one. Alerting
James Barnes
February 25, 2026
Designing Alerts for Action
3 min read In the first two posts of this series, we explored how alert noise emerges from design decisions, and why notification lists fail to create accountability when responsibility is unclear. There’s a deeper issue underneath both of those problems. Many alerting systems are designed without being clear about the outcome they’re meant to produce. When teams
James Barnes
February 18, 2026
A Notification List Is Not a Team
3 min read In the previous post, we looked at how alert noise is rarely accidental. It’s usually the result of sensible decisions layered over time, until responsibility becomes diffuse and response slows. One of the most persistent assumptions behind this pattern is simple. If enough people are notified, someone will take responsibility. After more than fourteen years
James Barnes
February 11, 2026
Alert Noise Isn’t an Accident — It’s a Design Decision
3 min read In a previous post, The Incident Checklist: Reducing Cognitive Load When It Matters Most, we explored how incidents stop being purely technical problems and become human ones. These are moments where decision-making under pressure and cognitive load matter more than perfect root cause analysis. When systems don’t support people clearly in those moments, teams compensate.
James Barnes
February 4, 2026