Instead of setting early revenue targets, new products should focus on a more telling metric: getting a small cohort of sophisticated users to become obsessed. This deep engagement is a leading indicator of product-market fit and provides the necessary insights to scale to the next 50 users.

Vanity metrics like total revenue can be misleading. A startup might acquire many low-priced, low-usage customers without solving a core problem. Deep, consistent user engagement statistics are a much stronger indicator of genuine, 'found' demand than top-line numbers alone.

Instead of focusing solely on conversion rates, measure 'engagement quality'—metrics that signal user confidence, like dwell time, scroll depth, and journey progression. The philosophy is that if you successfully help users understand the content and feel confident, conversions will naturally follow as a positive side effect.

Since today's AI companies grow too fast to have multi-year renewal data, investors must adapt their diligence. The focus shifts from long-term retention to short-cycle retention and, crucially, deep product engagement. High usage is the best leading indicator of future stickiness and value.

The true indicator of Product-Market Fit isn't how fast you can sign up new users, but how effectively you can retain them. High growth with high churn is a false signal that leads to a plateau, not compounding growth.

Conventional engagement metrics like likes and shares are often misleading. A more valuable indicator of content quality is dwell time. In an environment where users can easily skip content, their choice to spend more time with an ad is a powerful behavioral signal that the message is resonating.

The current AI hype cycle can create misleading top-of-funnel metrics. The only companies that will survive are those demonstrating strong, above-benchmark user and revenue retention. It has become the ultimate litmus test for whether a product provides real, lasting value beyond the initial curiosity.

Tracking success in LLMs isn't about UTMs, as it's top-of-funnel discovery. Instead, use three key metrics: Share of Voice (% of time you appear vs. competitors), Mention Rate (% of time your brand is mentioned), and Citation Rate (% of time your site is linked in an answer).

Focusing on a blended, company-wide conversion rate is a mistake. A flood of low-cost, low-intent traffic might lower the overall rate but still be highly profitable. The key is to isolate and improve conversion for specific, valuable cohorts, like users from a targeted ad campaign.