# What is Key Performance Indicator? Definition & Technical Mechanics

> **Source:** [SPIDITS AI Startup & Venture Intelligence Glossary](https://spidits.com/startup-glossary)  
> **Category:** Metrics  
> **Canonical Citation:** [https://spidits.com/startup-glossary/kpi](https://spidits.com/startup-glossary/kpi)

## Definition
A Key Performance Indicator (KPI) is a quantifiable metric used by startups to evaluate performance, track growth velocity, and report operational progress to board members and investors.

## Architectural Mechanics & Deep Dive
A Key Performance Indicator (KPI) is a quantifiable metric used by startups to evaluate performance, track growth velocity, and report operational progress to board members and investors.

## Industry Applications & Real-World Use Cases
Operational health and performance monitoring

## Frequently Asked Questions

### How should a startup select KPIs?
Focus on 3 to 5 metrics that directly correlate with product value, revenue expansion, and customer retention (e.g. NRR, LTV/CAC).

### What are typical SaaS KPIs?
Monthly Recurring Revenue (MRR), Churn Rate, Customer Acquisition Cost (CAC), and Daily Active Users (DAU).

## Related Terminology
- [arr](https://spidits.com/startup-glossary/arr)
- [mrr](https://spidits.com/startup-glossary/mrr)
- [churn-rate](https://spidits.com/startup-glossary/churn-rate)

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*From the SPIDITS AI Knowledge Base (300+ terms indexed). Explore full technical definitions: [https://spidits.com/startup-glossary](https://spidits.com/startup-glossary)*