B2B Startup Metrics

Blomfield says good metrics help founders make better decisions, but tracking too many numbers can be misleading when a startup has only a few hundred or thousand users. He recommends choosing four or five key metrics before launch, using a simple analytics tool, and agreeing on written definitions across the team. Keep those definitions consistent over time, and stay close to customers instead of relying on metrics alone.

Blomfield warns against vanity metrics such as page views, GMV, and gross transaction value, which can rise without improving a company’s revenue. He recommends putting revenue at the center of B2B measurement and including net monthly burn and runway in investor updates. For example, $1 million in the bank and $100,000 in monthly burn gives a startup 10 months of runway.

Retention measures how many customers keep paying after they sign up, and cohort tracking shows how that changes over time. Blomfield contrasts sticky cohorts, which build a lasting “layer cake” of revenue, with a leaky bucket where customers churn out. Net dollar retention includes both lost and expanded customer revenue: in his example, a cohort grows from $100,000 to $110,000 monthly revenue in a year, or 110% retention. He suggests early-stage B2B SaaS companies aim for 125% or more, while 110% to 120% can be good for mature companies.

Gross margin is revenue minus costs that increase with each customer, such as model credits for an AI service. Blomfield cautions that free credits can hide costs, while operational businesses may have margins as low as 5% to 15%, compared with roughly 95% for pure software. He advises fixing negative unit economics before scaling, as Monzo did by bringing technology in-house and adding paid services.