4 key metrics to track for solofounders
minimal metrics
Last week, I shared how nested layers of focus transformed my business approach.
Today, let's talk about measuring progress without drowning in data.
As a solo founder, you need metrics that matter, not a spreadsheet that takes hours to maintain.
Here's the simplified framework I wish I'd had when starting out.
This week’s issue is sponsored by
Elestio is a fully managed DevOps platform to deploy your code and open-source software. With effortless installations, automated backups, and seamless updates, you get all the benefits of a managed service with none of the lock-in or cost.
Layer 1: Business Focus Metrics
As a solo founder, you can get away with tracking two numbers at the business level:
1. Monthly Net Profit: revenue - costs
Your net profit is key because it takes into account the 2 main numbers you’re interested in. Revenue and costs.
This single number tells you if your business is healthy and sustainable.
Track it monthly to ensure you don’t see dips in profit that last too long. Temporary dips are fine, but it’s important to understand why they’re temporary.
2. Monthly Recurring Revenue (MRR)
This shows the predictability of your income.
Even if you're not running a subscription business, track which portion of your revenue comes from repeat customers vs. one-time purchases.
Layer 2: Revenue Stream Metrics
For your primary and secondary revenue streams, focus on conversion rates and average revenue. The exact metrics will change based on the type of business you’re running, but here’s an example that will cover most businesses:
Primary Stream:
Conversion rate: What percentage of leads become customers?
Average deal value: How much does each customer spend?
Secondary Stream:
One metric only: Does it help you sell more of your primary offering?
Don't overthink this. If your secondary offering isn't clearly supporting your primary one, it might be a distraction.
Layer 3: Marketing Channel Metrics
For your chosen marketing channels, again the metrics you track will change based on the type of business you’re running, so tailor this to your business:
Primary Channel:
Lead generation: How many qualified leads do you get per week?
Cost per lead: What's your spending per qualified lead?
Secondary Channel:
Traffic to primary: How many people does it send to your main channel?
Forget about follower counts and other vanity metrics. Focus on leads and costs. If you’re using something like Youtube, track the % of views that lead to website visits, and then the % of those that lead to sales. This then allows you to calculate how much 100 youtube views generates.
Layer 4: Task Focus Metrics
Keep it simple. Block one hour on the first of each month to review:
1. Monthly Net Profit
Is it dropping?
What's the biggest drain on profit?
2. Revenue Stream Balance
Is your primary stream growing?
Is your secondary stream actually supporting it?
3. Marketing Effectiveness
Which channel brings in leads at the lowest cost?
Double down there, cut back elsewhere
4. Task Focus
Review your completed tasks
Identify one type of task to eliminate next month
Red Flags to Watch:
Net profit drops for two consecutive months
Lead costs increase while conversion stays flat
Less than 60% of tasks are revenue-generating
You can't calculate these numbers in under 30 minutes
Real World Example:
Sarah runs a web design business (primary revenue) and sells templates (secondary revenue). Here's her monthly review:
Net Profit: $8,500 (up from $7,800)
MRR: $6,000 from retainer clients
Primary Stream Conversion: 30% of leads become clients
Secondary Stream Impact: Template buyers are 2x more likely to book custom work
Marketing: LinkedIn brings leads at $50 each, Twitter at $120
Her action items became clear:
Scale back Twitter presence
Create more templates (they clearly support the main business)
Remember: The goal isn't perfect tracking – it's having just enough data to make better decisions. If you're spending more than an hour a month on metrics, you're probably tracking too much.
Next week, I'll do a guide on a different area. I’m undecided on what to share so if there’s anything you’d like me to write about, let me know in the comments or reply to this email. Thanks for reading.
Great post!