Pre-PMF Freemium SaaS with Google Analytics

METRICS FOCUS FRAMEWORK FOR YOUR SAAS

Your Stage: Pre-PMF Validation
Primary Goal: Find users who get value and would pay
Tools: Google Analytics
Current Status: 200 signups, freemium project management SaaS

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STOP TRACKING (Vanity Metrics)
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❌ Pageviews
Why: Traffic without conversion context is meaningless. A surge in pageviews
with no activation just means you’re spending money on tire-kickers.

❌ Time on site
Why: For productivity tools like project management, longer sessions don’t
necessarily mean value. Users want to get in, get work done, and get out.

❌ Bounce rate
Why: Not relevant for logged-in SaaS applications. This is a marketing site
metric, not a product health metric.

❌ Total signups without segmentation
Why: 200 signups means nothing if they’re all inactive. Quality > quantity.

❌ Feature usage counts without context
Why: “500 tasks created” tells you nothing about whether users find value
or will convert. It’s a vanity screenshot, not an insight.

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START TRACKING (3 Core Metrics)
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1. ACTIVATION RATE (Leading Indicator)

   Definition: % of signups who complete a meaningful action within 7 days

   For project management, meaningful action = creating their first project
   AND inviting a team member OR creating 3+ tasks. This shows intent to
   actually use the tool, not just kick tires.

   Why it matters: Predicts who will become a paying customer. Non-activated
   users have near-zero conversion potential. Industry data shows activated
   users are 10x more likely to convert than inactive signups.

   How to calculate with Google Analytics:

   • Set up Event: “Activated” (fires when user creates project + task/invite)
   • Navigate to: Engagement > Events > “Activated” event
   • Create Custom Funnel: Signup → Activated (within 7 days)
   • Formula: (Users who triggered “Activated”) / (Total signups) × 100

   Target benchmark: 30-40% for freemium project management

   Industry context: The median activation rate for SaaS is 30%, with good
   performance at 40%+. Freemium products typically see 20-40% activation.
   Project management tools should target the higher end because they solve
   a clear pain point.

   Action triggers:

   • <20%: CRITICAL. Onboarding is broken or product doesn’t solve a real
     problem. Stop marketing. Fix onboarding or validate product-market
     fit with user interviews.

   • 20-30%: BELOW BENCHMARK. Focus on first-run experience. Test:
     • Welcome email with setup checklist
     • In-app onboarding tooltips
     • Sample project templates
     • Reduce steps to first value

   • 30-40%: HEALTHY. Incremental optimization. A/B test onboarding flows.

   • 40%: EXCELLENT. Shift focus to retention and conversion. You’ve nailed
     the aha moment.

2. WEEKLY RETENTION RATE (Leading Indicator)

   Definition: % of users active this week who were also active last week

   “Active” for project management = logged in AND took action (created task,
   updated project, commented, etc.). Passive logins don’t count.

   Why it matters: Shows stickiness before you have revenue. Retention predicts
   lifetime value and conversion potential better than any other metric. If
   users don’t come back weekly, they’ll never pay monthly.

   How to calculate with Google Analytics:

   • Navigate to: Reports > Retention > User retention cohort
   • Set time unit: Week
   • Set return criterion: Any engagement event (task created, project updated)
   • Formula: (Users active Week N and Week N+1) / (Users active Week N) × 100

   Alternative manual calculation:

   • Create Segment: Users active in Week 1 (Jan 6-12)
   • Create Segment: Users active in Week 2 (Jan 13-19)
   • Count overlap: Users in BOTH segments
   • Formula: (Overlap) / (Week 1 users) × 100

   Target benchmark: 25-35% week-over-week for early-stage freemium

   Industry context: Early-stage SaaS retention is highly variable. Only
   companies with strong product-market fit see 30%+ weekly retention. Most
   struggle at 10-20% until they find PMF.

   Action triggers:

   • <15%: VALUE GAP. Users don’t find the product useful. Actions:
     • Interview 10 churned users this week
     • Identify why they stopped using it
     • Consider pivot or major product changes

   • 15-25%: BUILDING TRACTION. Find patterns in retained users:
     • What features do they use?
     • What workflows do they follow?
     • How did they discover the product?
     • Double down on whatever retains them

   • 25-35%: STRONG SIGNAL of product-market fit. Study what retains users
     and amplify those patterns.

   • 35%: EXCEPTIONAL. You have a sticky product. Focus on monetization.

3. FREE-TO-PAID CONVERSION RATE (Lagging Indicator)

   Definition: % of free users who upgrade to paid within 30 days

   Why 30 days: Project management tools show value quickly. Users who don’t
   convert in 30 days rarely convert at all without intervention.

   Why it matters: Validates business model. Without conversion, you have
   a free tool, not a SaaS business. Even 2% conversion at scale is viable,
   but you need to know your baseline to improve it.

   How to calculate with Google Analytics + manual tracking:

   Option 1 (if you track upgrades in GA):

   • Set up Event: “Upgraded to Paid”
   • Create Custom Funnel: Signup → Upgrade (within 30 days)
   • Formula: (Paid conversions) / (Free signups 30 days ago) × 100

   Option 2 (manual with your payment system):

   • From your payment provider: Count new paid customers in last 30 days
   • From GA: Count signups exactly 30 days ago
   • Formula: (New paid customers) / (Signups 30 days ago) × 100

   Example with your numbers:

   • Signups 30 days ago: 50 users (assuming steady growth to 200 total)
   • Paid conversions: 2 users
   • Conversion rate: 2/50 = 4%

   Target benchmark: 2-5% for freemium project management

   Industry context: Freemium self-serve products typically see 3-5% conversion,
   with exceptional performers reaching 6-8%. Sales-assisted freemiums do
   better at 5-7%. Project management is competitive (Trello, Asana, Monday),
   so 3%+ is realistic. Below 2% suggests pricing/positioning issues.

   Note: This is MUCH LOWER than trial-based conversion (15-25%) because
   freemium has no urgency. Trial clocks create pressure. Free plans don’t.

   Action triggers:

   • <1%: PRICING OR POSITIONING PROBLEM. Your value proposition is unclear
     or your paywall is in the wrong place. Actions:
     • Review what features are free vs. paid
     • Interview activated users who didn’t upgrade: why not?
     • Test paywall placement (what triggers upgrade prompt?)

   • 1-3%: NORMAL FOR FREEMIUM. Incremental improvements:
     • Add upgrade prompts when users hit limits
     • Email drip campaign highlighting paid features
     • Show “teammate upgraded” notifications

   • 3-5%: HEALTHY. Test price increases and expanded free tier features.

   • 5%: EXCELLENT for pure freemium. Consider:
     • Raising prices (you’re undercharging)
     • Expanding free tier (you’re blocking too much value)
     • This signals strong willingness to pay

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WEEKLY CHECK-IN ROUTINE (12 Minutes)
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Every Monday at 9am (before you check email):

1. ACTIVATION RATE TREND (4 minutes)
   → Open Google Analytics
   → Navigate to: Engagement > Events > Your activation event
   → View last 4 weeks as a chart
   → Note: Is it trending up, down, or flat?
   → Record in spreadsheet: Week, Signups, Activations, Rate%

   Quick interpretation:

   • Trending up: Something’s working. Identify what changed.
   • Flat: You’re stuck. Time to run experiments.
   • Trending down: Red flag. Investigate immediately.

2. WEEKLY RETENTION CHECK (4 minutes)
   → Open Google Analytics
   → Navigate to: Reports > Retention > User retention
   → View Week N to Week N+1 retention
   → Calculate: Active last week who returned this week
   → Record: Week, Active users, Returned, Retention%

   Quick action:

   • If retention dropped >5 percentage points: Email 5 churned users today.
   • If retention improved: Document what you did differently.

3. CONVERSION PIPELINE REVIEW (4 minutes)
   → Check your payment system: New paid customers this week
   → Check GA: Signups from 30 days ago
   → Calculate current 30-day conversion rate
   → Record: Cohort date, Signups, Conversions, Rate%

   Quick gut check:

   • At 200 signups and 3% conversion = 6 paying customers
   • If you have <4 paying customers, conversion is below benchmark
   • If you have 0-1 paying customers, you have a monetization crisis

Total time: 12 minutes
Frequency: Once per week, same day/time
Output: One row in a Google Sheet with 3 numbers

What this tells you:
After 8 weeks of tracking, you’ll see clear patterns. You’ll know if your
business is improving (all 3 metrics trending up), stuck (flat metrics), or
failing (metrics declining).

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WHAT SUCCESS LOOKS LIKE AT YOUR STAGE
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HEALTHY TRAJECTORY (You’re building a business):
✓ Activation: 30-40% and stable or growing
✓ Retention: 25%+ weekly and stable
✓ Conversion: 2-5% within 30 days
✓ Trend: At least one metric improving month-over-month

VALIDATION MILESTONES:
→ 40% activation = Strong product-market fit signal
→ 30% weekly retention = Sticky product
→ 3% free-to-paid = Viable business model
→ Hit all three = Ready to scale acquisition

WARNING SIGNS (Don’t scale yet):
⚠ Activation <20%: Onboarding broken or weak value prop
⚠ Retention declining 3+ weeks: Product doesn’t deliver ongoing value
⚠ Conversion <1%: Pricing/positioning problem or free tier too generous
⚠ All three flat for 8+ weeks: You’re stuck; need experiments or pivot

CRISIS INDICATORS (Stop and fix):
✗ Activation <15%: Product-market fit not found
✗ Retention <15%: Users don’t find value
✗ Conversion <0.5%: Monetization fundamentally broken
✗ Metrics declining for 4+ consecutive weeks: Business is dying