The Three Metrics Every Founder Should Track

If you’re tracking 47 different metrics, you’re tracking nothing.

I’ve seen it countless times: founders with beautiful dashboards full of numbers that don’t actually inform decisions. It’s metric theater.

Here’s what I tell every founder I work with: start with three metrics. Get really good at understanding and acting on these, then expand if needed.

Metric #1: Runway

What it is: How many months you can operate at your current burn rate before you run out of money.

Why it matters: It’s the number that keeps you alive. Everything else is secondary.

How to calculate it:

Runway = Cash in Bank / Monthly Burn Rate

What to do with it:

• If runway < 6 months: Sound the alarm. Focus on extending runway or raising capital.
• If runway = 6-12 months: Start planning fundraising or path to profitability.
• If runway > 12 months: You have breathing room to build.

Metric #2: Unit Economics

What it is: Does each customer/project make you money after accounting for the direct costs to serve them?

Why it matters: You can’t scale to profitability if the economics don’t work at the unit level.

How to calculate it:

Unit Contribution Margin = Revenue per Unit - Direct Costs per Unit

For service businesses, this might be:

Project Profit = Project Fee - (Your Time + Contractors + Direct Expenses)

What to do with it:

• If negative: You’re losing money on each sale. Fix pricing or costs before scaling.
• If positive but small: Can you scale this profitably? What levers improve margins?
• If healthy (>50%): You have room to invest in growth.

Metric #3: Cash Conversion Cycle

What it is: How quickly cash moves through your business—from spending on costs to collecting payment.

Why it matters: Even profitable businesses fail if they run out of cash waiting for payment.

How to calculate it:

Days to Collect Payment - Days to Pay Suppliers = Cash Conversion Cycle

What to do with it:

• Negative number (you collect before you pay): Amazing. You’re funding growth with customer money.
• 0-30 days: Healthy for most businesses.
• 60+ days: Danger zone. You’re funding customers with your runway.

Levers to pull:

• Invoice faster
• Require deposits or milestone payments
• Negotiate better payment terms with suppliers

The Real Point

These three metrics answer the only questions that matter in the early days:

1. Will I run out of money? (Runway)
2. Does my business model work? (Unit Economics)
3. Am I strangling myself with cash flow? (Cash Conversion Cycle)

Master these first. Then we can talk about CAC, LTV, and all the fancy stuff.

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Want help setting up the right metrics for your business? I can help you identify what matters most and build dashboards that actually inform decisions. Book a call and let’s figure it out together.