Business Metrics

Measurements that connect product usage, customer behavior, growth, retention, and economics to business outcomes.

Motivation

Measurements that connect product usage, customer behavior, growth, retention, and economics to business outcomes.

Where it fits

This concept provides a shared vocabulary for designing, documenting, measuring, or operating software systems.

Mental model

Treat it as a structured tool: define the question being answered, use consistent terminology, and connect the result to decisions and follow-up work.

Subconcepts

DAU

The number of distinct active users in a day.

WAU

The number of distinct active users in a week.

MAU

The number of distinct active users in a month.

ARPU

Revenue divided by the number of users or customers in a period.

Retention Rate

The proportion of users or customers who remain active after a defined period.

Churn Rate

The proportion of users, customers, or recurring revenue lost in a period.

Largest Tenant

The workload or revenue contribution of the largest tenant, used to understand concentration risk.

Average Tenant Size

The average usage, data volume, users, or revenue per tenant.

Geographic Distribution

The distribution of users, traffic, revenue, or data across regions.

Growth Rate

The rate at which usage, revenue, customers, or workload changes over time.

Practical use

Business metrics require stable definitions, clear cohorts, and context. ARR, MRR, CAC, LTV, and KPIs remain separate concepts because they carry broader decision frameworks.

Common mistakes

Using ambiguous definitions or units.
Collecting or documenting information without connecting it to a decision.
Failing to keep the artifact or measurement current as the system changes.

See the linked concepts in the knowledge graph for prerequisites and adjacent practices.