Why Measuring the Right Thing Changes Everything
Ever heard the saying, “What gets measured gets done”? It’s been repeated in every business strategy meeting for a reason—it works. Metrics aren’t just numbers on a dashboard; they’re signals. Signals that tell you whether you’re heading in the right direction or about to fall off a cliff.
But here’s the catch: tracking every single number won’t help you. In fact, it can slow you down. Knowing what to measure—and why—is what sets successful startups apart from the rest.
The Origin of the Word “Metric” (And Why It Matters)
If you’re the kind of founder who loves getting to the roots of things, you’ll appreciate this: both “metric” and “measurement” stem from the Proto-Indo-European root me- meaning “to measure.” “Metric” evolved through Greek (metron), meaning length or proportion, and made its way into Latin before entering English usage by the 1760s. “Measurement” followed a similar journey via Latin (metiri) and Old French (mesurer).
Cool history, sure—but what really matters is how metrics give structure to chaos. They transform gut feelings into decision-making tools. And that’s gold for investors.
Why Metrics Are Non-Negotiable in Business
Let’s get one thing clear—metrics are your proof. They’re the numbers that show investors you’re not guessing your way forward. Metrics tell a story about your past performance, current traction, and future potential. For startups looking for funding, these indicators are non-negotiable.
They also show accountability. If you set a target and track your progress, you’re demonstrating maturity, planning, and discipline—three things every investor values.
But Wait—Don’t Measure Everything
Before you go building a 100-metric dashboard, pause. Not every number matters equally. Measuring what’s easy (like app downloads or social media followers) doesn’t always reflect business health.
Instead, you should focus on metrics that align with your business model. If you’re a fintech company, for example, your success isn’t measured by app installs—it’s measured by transaction volume and revenue per user.
So, what should you actually measure?
Six Startup Metrics Every Investor Wants to See
1. Gross Margin
What it is: The percentage of money left after subtracting the cost of goods or services.
Why it matters: It shows how efficiently you produce your product or service. A low gross margin could be a red flag that you’re overspending or underpricing.
Formula:
(Total Revenue – Cost of Goods Sold) / Total Revenue × 100
2. Revenue Growth
Also called: The “top line”.
What it tells investors: How fast your business is expanding. Trends in this metric can reveal momentum, seasonality, or deeper issues.
Pro tip: Investors don’t just want one big number—they want to see consistent, predictable growth.
3. Net Income
Also called: Profit, bottom line, or burn rate.
Why it matters: This is what’s left after all costs—including operations, taxes, and interest. It tells investors whether your business is actually profitable or just riding on hype.
Formula:
Revenue – All Expenses
4. Contribution Margin
Why it’s key: This metric focuses on individual product profitability. It tells you how much of each sale contributes to covering fixed costs and profits.
Reality check: For many businesses, contribution margins fall between 5% and 25%—and investors will want to know where you land.celerisque donec ultricies tortor adipiscing fusce morbi volutpat pellentesque consectetur risus molestie curae malesuada. Dignissim lacus convallis massa mauris enim mattis magnis senectus montes mollis taciti phasellus accumsan bibendum semper blandit suspendisse faucibus nibh metus lobortis morbi cras magna vivamus per risus fermentum. Dapibus imperdiet praesent magnis parturient.
