Congrats: You’ve found go-to-market fit (GTM). This means you’ve uncovered a repeatable formula for scaling your startup, and it’s a pivotal moment for any company.
But how can you make sure you’re ready to scale?
3 metrics drive the math of scaling a startup:
🔷 Gross churn rate (GCR) the % of recurring revenue lost from customers that didn’t renew
🔷 The magic number (MN) tells you how much new revenue is generated for every dollar spent on sales and marketing
🔷 Gross margin net revenue as a % of total revenue, and how much gross profit you get over the cost to produce each unit sold
Interested in seeing how the inbound marketing, sales, and customer service company Hubspot leveraged these metrics to go from startup to scale-up? Then join our Sales & Investor Accelerator Club. Join us here!
In your experience, what is the best indicator of when a startup is ready to scale? Why? Please share in the comments. 🗯️