What are the key metrics I should focus on while testing and iterating my business model?

When testing and iterating your business model, key metrics will vary depending on the stage and specific context of your startup. However, a focus on lean metrics that provide insight into customer behavior, market fit, and the effectiveness of your business processes is essential.

Metrics such as Customer Acquisition Cost (CAC), Lifetime Value (LTV), Monthly Recurring Revenue (MRR), Churn rate, and Conversion rates offer a comprehensive view of your economic sustainability and customer-centric performance. Tracking how much it costs to acquire a customer and how much value they bring over time informs your marketing and pricing strategies. Furthermore, understanding your recurring revenue and customer retention (or churn) offers insights into the stability and growth potential of your venture.

Embedding an experimentation mindset into your startup culture means also closely monitoring your product and feature usage. Engagement metrics, like daily active users (DAU) or time spent on your service, can signal how well your product resonates with its intended audience. Dive deep into user feedback through net promoter score (NPS) or customer satisfaction (CSAT) to ensure that your product innovations truly meet user needs and wants. Remember, the ultimate goal is to create a sustainable business model that delivers value to your customers continuously.