In the fast-paced world of startups, especially those still pre-revenue, early traction metrics are vital indicators of future success. For investors and founders alike, understanding key signals such as user engagement, customer acquisition, and product-market fit can mean the difference between backing a promising venture or missing out.
Metrics such as the ratio of Daily Active Users (DAU) to Monthly Active Users (MAU), cost per acquisition, and Net Promoter Score (NPS) offer deep insights into a startup’s growth potential and market readiness. As startup competition intensifies in Africa, mastering these early indicators helps stakeholders make informed decisions and spot the startups most likely to thrive in Africa’s dynamic tech ecosystem.
This guide breaks down essential early traction metrics and strategies that pre-revenue startups can use to demonstrate traction, signal momentum, and ultimately secure seed or early-stage funding.
User engagement metrics measure how frequently and meaningfully users interact with a product. These metrics are a leading indicator of user interest, satisfaction, loyalty, and ultimately, retention - all of which are crucial for demonstrating early traction.
User engagement can be broken down into four categories:
User activity metrics: How often users engage with your product or return to it (weekly, monthly, daily)
User session metrics: How user engagement breaks down into sessions
Feature engagement metrics: How users interact with the features of your product
User journey metrics: How users progress through key product experiences
How to Use DAU vs MAU to Measure Startup Engagement
For startups, particularly those building software-as-a-service (SaaS) platforms, the DAU/MAU ratio is one of the most telling engagement metrics. It reveals how frequently users return to your product and how essential it is in their daily or monthly routine.
How to calculate daily active users (DAU)
DAU refers to the number of unique users who interact with your product in a 24-hour period. This includes both new users and returning users who have taken meaningful action (e.g., logging in, posting, purchasing, or interacting with a feature).
Formula: Unique New Users + Unique Returning Users = DAU
DAU is a common metric in the startup ecosystem – especially in IPO technology – where daily user counts can cause shares to fluctuate.
How to calculate monthly active users (MAU)
MAU tracks the number of unique users who have engaged with your product in any meaningful way during the last 30 days.
Formula: (Total Active Users in a Month / Total Number of Users) x 100.
For example, if a mobile app has 500 000 registered users, and in the month of August 100 000 of them logged in at least once. To calculate the MAU we use the formula: MAU= (100 000/500 000) x 100 = 20%.
A DAU/MAU ratio of 20% is typically considered good, while a ratio above 50% indicates exceptional user engagement and product stickiness.
Customer Acquisition Metrics to Attract Investors
Even before generating revenue, demonstrating that your startup can attract and convert users is key to raising early-stage capital. Investors look for scalable and cost-efficient acquisition models that prove your ability to grow and monetise in the future.
Top Acquisition Metrics for Pre-Revenue Startup Growth
Cost Per Acquisition (CPA) – The cost required to acquire a lead such as a registration, activated users or a sign-up on a free trial.
Customer Acquisition Costs (CAC) – Amount of money you spend to acquire new customers.
Conversion Rate – Percentage of website visitors who take a specific action, key metric for measuring the effectiveness of the website content and messaging.
Customer Lifetime Value – Measures the total revenue a single customer generates through their relationship with the app/platform. Critical to understanding long-term value of your customers.
Customer Acquisition Cost to Customer Lifetime Value Ratio – Vital to understanding the return on investment (ROI) of your marketing efforts.
A healthy CAC:CLV ratio is typically 1:3 or better, meaning your customer is worth three times what it cost to acquire them.
These metrics, while sometimes overlooked by early-stage founders, are vital to securing funding. They reflect how efficiently your startup is acquiring users and provide insight into long-term sustainability.
Retention Strategies to Boost Startup Growth
Acquiring users is one thing; retaining them is where lasting value lies. A high churn rate (the percentage of users who stop using your product) can be a red flag for investors.
In order to retain your customers, you need to understand who they are, what they need, and how they use your product or service. You can leverage various tools and methods to collect and analyse customer data such as surveys, interviews, analytics, segmentation, and personas.
Understanding your customers helps you tailor your value proposition, communication methods, and offers a strategy that matches their pain points and goals.
2. Deliver value consistently
The second step is to deliver value consistently and exceed their expectations. This can be done by providing a high-quality product/service that solves their problem, adds convenience or creates satisfaction. Additionally, you can add value by offering content, resources, tips and support that educates and empowers your customers.
3.Establish strong relationships and build trust
Building long-term relationships and trust with your customers is vital. You can do this by engaging with them regularly and personally through various channels and formats. These include email, social media, phone, chat, video, or events.
Also, being transparent, honest and responsive and by addressing any issues or complaints promptly, shows your customers that you care about them and their pain points.
4.Customer rewards
The fourth step involves rewarding your customers for their continued business and advocacy. This can be done through loyalty programmes, or a gamification system that incentivizes customers for their actions and behaviours.
Additionally, offering discounts, coupons, freebies, upgrades, or exclusive access to new features or products can help you with retaining customers.
5.Innovate and iterate
Innovating and improving your solution constantly helps with retaining customers. Do this by listening to your customers' feedback, suggestions, and complaints, and by conducting market research and testing.
Also, adding new features, products or services that meet your customers’ evolving needs and expectations creates a roadmap that shows your vision and direction. This helps customers keep up with any changes and keeps them on your platform.
6.Track and optimise
The final step is to measure and optimise your retention efforts using various metrics and indicators, such as customer satisfaction, retention rate, churn rate, lifetime value, net promoter score, or customer advocacy.
In addition to that, tools and techniques such as A/B testing, cohort analysis, or customer journey mapping help to identify and optimise the key drivers and factors that influence your customer retention strategy.
Remember, in the business-to-business (B2B) world, customers are more likely to buy from people they trust and rely on. Ensure you are consistently and clearly communicating with your customers to show you value them.
How to Measure Product–Market Fit in a Startup
Product-market fit refers to how well a product meets the needs of a specific market and solves the problem(s) experienced by the designated market. Product-market fit is a key driver of customer retention and acquisition and has a great effect on the business’ growth and success.
Net Promoter Score (NPS)
Net promoter score is a simple, effective metric used to measure customer satisfaction and loyalty by asking one key question: “How likely are you to recommend our company/product/service to a friend or colleague?”.Based on the responses of the customers, they are grouped into three categories: Promoters, Passives and Detractors.
Promoters (9-10): Loyal enthusiasts who will likely recommend your business to others and help attract new customers.
Passives (7-8): These customers are happy with the service but are not devoted to your brand and may easily switch to a competitor.
Detractors (0-6): Unhappy customers who may affect your business reputation and growth through negative word-of-mouth.
For startups, NPS is crucial because it measures customer loyalty, identifies brand advocates (promoters) and potential churn risks (detractors), and predicts growth through word-of-mouth and repeat business, helping limited-resource companies retain customers and focus limited resources on improvements that drive success.
Using Waitlists to Build Early Demand for Startups
A waitlist is a great tool to create demand, generate buzz and prepare for the launch of your product. Here’s what you need to know:
Validate market interest through sign-ups and referrals
Create urgency and exclusivity to engage early users
Plan resources better by gauging early-demand
Grow cost-effectively using referral programmes
How to Build a Waitlist
1. Set clear goals and define measurable objectives
2. Know your audience and identify early adopters for more tailored marketing
3. Create a landing page using strong headlines, visuals and simple sign-up forms
4. Offer incentives and use rewards like priority access or exclusive features
5. Leverage referrals and encourage customers to share your brand for more rewards
6. Engage users by sending regular updates to maintain interest.
Show, Don’t Just Tell
In today’s investment climate, especially in emerging markets like South Africa, pre-revenue traction often serves as the primary proxy for startup potential. Metrics around engagement, acquisition, retention, and product–market fit allow founders to demonstrate momentum long before revenue arrives.
Early-stage investors aren’t just looking for a good idea—they’re looking for evidence that your team can execute, your product resonates with users, and your growth is repeatable.
By tracking, understanding, and optimising these metrics, you’re not only building a stronger business, you’re making it easier for investors to say “yes”.
Lungile is the Digital Editor for Startup.Africa, with a knack for storytelling, technology and innovative ideas. Working with Startup.Africa, she takes simple ideas and turns them into amazing stories.
Lungile Msomi
