Evaluating Early Stage Startups — The Three Metrics that Matter

The earlier the company, the more important it is to remain laser focused on growing as fast as possible to prove out a market opportunity. From there, “learn from churn” to better understand your customers with an emphasis on retention and upselling. Once product/market fit has been proved out (defined by high growth and low or negative net churn), then focus on the business model to drive up gross margins and show the company can (eventually) make money.

Patrick Johnson