Time to First Million ARR

One way to measure product market fit is to look at the time it takes between putting a product out in the market to the first $1MM in ARR.

Lenny’s Newsletter says 1 year from launch to $1MM ARR is considered good, 9 months is great.

Of course, there are plenty of examples of bad companies growing quickly and collapsing just as fast, but it’s a useful measuring stick, especially when you look at graphics like this:

See also:

• SaaS revenue per employee benchmarks for B2B companies
• Invest in lines not dots

Links to this note

• B2B Benchmarks

  A collection of benchmarks for B2B businesses (mostly relevant for early-stage SaaS).

• How to Measure the Health of a Startup

  Here are the most useful metrics I’ve found for running a startup. These should be measured and reviewed regularly. The metrics that matter most the ones that raise questions and drive useful discussions. Try to avoid difficult to calculate metrics that are hard to build an intuition about (people don’t expect much from simple ideas).