Most founders I meet in their first year are tracking either nothing or everything.
Nothing is more common than people admit. There is a bank balance, a rough sense of how many customers there are, and a feeling about whether things are going well. Everything is the other failure: a dashboard with thirty metrics on it, built in a weekend, checked obsessively for a fortnight and then never again.
Five numbers will carry you through your first couple of years. Here they are, in the order they start to matter.
1. Runway
How many months you can operate before the money runs out. Cash in the bank divided by what you spend each month.
This is the only number that has a deadline attached, which is why it goes first. Everything else on this list is a measure of how you are doing. Runway is a measure of how long you have left to do it.
Two things founders get wrong here. The first is calculating it once, at the point of raising or starting, and treating it as fixed — when it moves every month, usually in the wrong direction. The second is calculating it optimistically, using the revenue you expect rather than the revenue you have.
Work it out on today’s actual numbers, with no forecast revenue in it at all. If that figure is under six months, that is your only strategic priority and everything in this article below it can wait.
Outcome: you know your deadline, and you know it monthly rather than annually.
2. Burn rate
How much cash you spend each month beyond what comes in. The denominator of the number above.
Burn is worth watching separately because it is the one thing on this list you fully control. You cannot decide to have customers. You can decide what you spend.
The trap is that burn tends to creep. It does not jump — nobody wakes up and doubles their costs. It goes up by £400 a month, repeatedly, through tools that seemed cheap, a contractor extended by a fortnight, a subscription tier upgraded because of one feature. Twelve of those and you have cut months off your runway without making a single decision you would remember making.
Once a quarter, list everything leaving the account and ask of each line whether you would start paying it today. Cancel what fails.
Outcome: costs that reflect deliberate choices rather than accumulated ones.
3. Product-market fit
Not a number, which is why it sits awkwardly in the middle of a list like this — but it is the thing the other four are trying to tell you about.
The standard definition is a product that satisfies a strong market demand, at the point where growth starts pulling rather than being pushed. The useful test is simpler. Are customers buying without you personally persuading them? Are they staying? Are they telling other people?
Three yeses and you have it. Any no and you do not, regardless of what the revenue line looks like this month.
The reason this matters more than any single metric is that it changes what you should be doing. Before fit, your job is to learn. After fit, your job is to build the machine. Founders who mistake the first state for the second start hiring salespeople to sell something that does not yet sell itself, and it is an expensive error.
Outcome: you know which job you are currently doing.
4. Churn
The rate at which customers cancel or stop using the product. Customers lost in a period, divided by customers at the start of it.
Churn is the number that ruins good news, and this is exactly why it is worth watching early. Acquisition figures can look strong for a long time while the business goes nowhere, because you are refilling a leaking bucket. Thirty new customers a month is a triumph or a treadmill depending entirely on how many you lost.
For a very early business the raw percentage is less useful than the conversations. Ten customers and one leaves is a 10% churn rate, which is statistically meaningless and practically vital — because you can ring that person and ask why. Do that. It is the highest-value hour in your month, and it gets harder to do as you grow.
Outcome: you know why people leave, in their words, not yours.
5. Traction
Measurable evidence that the market is adopting what you built. Annual recurring revenue, active users, retention — whichever genuinely reflects your business.
Traction is last because it is the number everyone starts with and almost nobody needs first. It is the fundraising number, the update-email number, the thing that goes on the slide. And it is the easiest of the five to make look good while the underlying business is unhealthy, because you can buy users, discount your way to revenue, and count people who signed up and never returned.
Watch it, by all means. Just be honest that it is a scoreboard, not a diagnostic. If traction is up and churn is up with it, you do not have traction. You have turnover.
Outcome: you can tell a real signal from a flattering one.
What to leave out for now
You will notice what is absent. Customer acquisition cost, lifetime value, gross margin by segment, cohort curves.
They all matter eventually. In year one, most of them cannot be calculated meaningfully — CAC across eleven customers is arithmetic, not insight — and the effort of tracking them properly is effort taken from finding customer twelve.
The general rule I would offer, having watched a lot of founders build a lot of dashboards: a metric earns its place when you can name a decision you would make differently depending on its value. If you cannot, you are not measuring, you are decorating.
Five numbers. A spreadsheet is fine. Once a month is fine.
If you would like help working out which numbers matter for your business and how to capture them without building a data project, we would be very happy to help. Get in touch for a free introductory call.