3 Metrics Every Early-Stage Startup Should Watch for Product-Market Fit

Startups love to chase growth.

ARR milestones, inbound demos, waitlists… Essentially, anything that looks good on a pitch deck.

While those metrics are important, they only tell part of the story. And none of them really matter if your customers don’t stick around.

The real test of product-market fit isn’t just how many people buy your product. It’s how many stay and grow with you.

At AiSDR, we’ve been seeing tremendous demand. At one point, I was doing 10+ demos a day, and we had to hire new people to our sales team to help shoulder the load.

But demand alone doesn’t equal PMF. If you’re converting leads into users who churn shortly after signing up, you’re only inflating your numbers.

To build something sustainable, I pay attention to these three key metrics.

Metric #1: Annual Recurring Revenue

ARR is the first benchmark most founders shoot for. And for good reason.

Getting to $1M, $2M, or $3M ARR proves people are willing to pay for what you’ve built. It’s a clear indicator that something is working, especially if most of your revenue is coming from new customers outside your immediate network.

But ARR is a lagging indicator. It reflects the result of past sales efforts, and not current performance. Without understanding the quality of that revenue, ARR can be dangerously misleading.

And if you’re locking people into long, multiyear contracts early, it may give you a false sense of traction. 

At AiSDR, while we celebrate ARR wins, we never stop there.

Metric #2: MoM ARR Growth

I also always pay close attention to momentum.

Conventional wisdom in the SaaS industry says that if you’re doing $2–3M ARR and growing at 15%+ month-over-month, you’re probably onto something.

That’s a strong signal, especially when paired with a healthy inbound engine and customer excitement.

But again, demand isn’t the same as readiness.

AI works best when these three things are true:

• You’ve already figured out your outbound
• Email is a strong channel for your audience
• You’re solving a real pain point with a clear ROI

If those aren’t in place, AI won’t save you.

It won’t matter how fast you grow. The churn will come right behind it. And all rapid growth will do is lead to even more rapid churn.

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Metric #3: Net Revenue Retention

Net revenue retention is the most important, and often the most ignored, metric for early-stage startups.

It tells you whether customers are sticking around and if they’re spending more over time. 120%+ NRR is what separates hype-fueled companies from truly sticky products.

It means your customers aren’t just staying with you.

They’re growing. They’re upgrading. They’re expanding. They’re getting so much value that your product becomes core to their success.

At AiSDR, I’ve made NRR our north star.

Many founders push annual contracts early on to inflate ARR. 

I get it. Such teams want the security. 

But I chose a different path: month-to-month contracts.

Why?

Because if we’re not delivering real value, I want to know right away. Locking customers into long contracts obscures churn. I’d rather lose a customer early than build a business on shaky retention.

The only way to earn long-term customers is to keep solving the problem. Not enforcing the legal terms of a contract.

Results

These three metrics – ARR, MoM ARR growth, and NRR – give you a clearer picture of whether you’re building something good.

We don’t want customers who stick around because they’re stuck in legal limbo. We want customers who stay because the product works. And I think NRR is the best indicator of that, while the other two tell you there’s demand.

So if you’re an early-stage founder chasing product-market fit, remember this:

• ARR shows traction
• Growth shows market interest
• Retention proves real value

Measure it. Obsess over it. And iterate until your customers stick not because they have to, but because they want to.