Forget MRR (for now)

For early-stage SaaS founders and teams, it’s extremely easy to get fixated on MRR. It’s the shiny number VCs ask about and it almost always becomes the north star for growth. But focusing too much on MRR, especially in a company’s early days, can lead founders to miss a more important indicator of long-term success: Time-to-Value (TTV).

If you can master TTV, MRR will follow naturally.

What is Time-to-Value?

TTV measures how quickly a customer derives tangible value from your product after signing up. It’s the amount of time between their onboarding and the moment they have the “aha!” moment—the point at which they see how your product solves their pain point. The shorter the TTV, the quicker customers experience value.

TTV is really, really important. Customers have more options and less patience than ever. They need to experience value quickly, or they’ll move on. An optimized TTV ensures that your product delivers value before the customer loses interest or churns out.

Why TTV Matters for Early-Stage SaaS

MRR is obviously important, but focusing too much on revenue growth can be misleading, especially for early-stage SaaS companies, because revenue is a lagging indicator of your product’s value delivery. You should be looking farther upstream at what actually drives revenue: retention, expansion, referrals, etc. And all of these are directly impacted by how quickly users experience value—your TTV.

In the early stages of building a SaaS company, speed to impact can make or break customer retention. When someone first signs up for your product, they’re excited about its potential, but that excitement quickly fades if they can’t immediately see how it solves their problem. No one sticks around on the promise of future value.

A long TTV leads to higher churn, regardless of how fantastic your product is on paper. As we’ve already mentioned, customers are bombarded with alternatives and competitors, and a product that makes them wait before showing value is a product that risks losing them. By contrast, a short TTV ensures that customers hit that “aha!” moment early, and becomes a critical lever in improving customer retention rates and building long-term loyalty.

The Ripple Effect of Optimizing TTV

Optimizing TTV doesn’t just improve customer satisfaction, it creates much broader ripple effects:

• Higher retention rates, lower churn: The quicker customers experience value, the more likely they are to stay. A customer who sees immediate value is more forgiving of product flaws or bugs because they already understand the core benefit. A long TTV is one of the biggest drivers of churn, so shortening it can drastically improve customer retention.
• More expansion opportunities: Customers who see early value will deepen their engagement with your product, opening up opportunities for upselling, cross-selling, or expanding usage within their org.
• Better word-of-mouth growth: Happy customers talk. When people derive quick value from your product, they’re more likely to recommend it to others. Word-of-mouth referrals are the most cost-effective way to grow, and customers who experience early wins become advocates and evangelists.
• Improved sales narratives: For the sales org, quick wins mean stronger, more compelling use cases. If the product delivers value quickly, it gives the sales team a powerful story to tell prospects, helping to close deals faster.

In essence, a shorter TTV creates a flywheel effect—engaged customers drive retention, referrals, and sales momentum, all of which contribute to sustainable growth.

How to Reduce TTV

There's no one-size-fits-all plan for compressing TTV, but here are a few tips that apply pretty generally:

1. Laser-focus on onboarding: Onboarding is the first and most important step in a customer’s journey with a product. If it's clunky, slow, or confusing, you’ve already created friction. Put as much thought into the onboarding experience as you do into the product to make the process as seamless and intuitive as possible, minimizing the number of steps between sign-up and the first moment of value.
2. Customer segmentation: Not all customers are the same, so their paths to value will differ. Tailor onboarding flows for different customer segments like size, industry, or use case, designing the onboarding experiences around their unique needs. SMBs may want quick, out-of-the-box solutions, while enterprise customers might need more customization and training, for example.
3. Streamline the road to “aha”: Every product has one or two key features that provide the fastest, most obvious value. Focus your customer journey around these features. Don’t overwhelm new users with every possible functionality—guide them to those key features that will make them realize the product’s potential.
4. Gather feedback and iterate: Continuously ask customers where they hit roadblocks or frustrations during onboarding and their early use of the product to identify and eliminate bottlenecks in the TTV process. Take customer input seriously and make quick adjustments accordingly to reduce friction.

Conclusion

MRR is undoubtedly important, but it's a lagging indicator that doesn't tell the full story of your product's effectiveness or your customers' satisfaction. TTV, by contrast, can make or break a startup. By focusing on reducing it, you're addressing the core of what makes a SaaS product successful: its ability to quickly solve users' problems.?

A shorter TTV leads to higher retention rates, more expansion opportunities, better word-of-mouth growth, and compelling success stories for your sales team. By optimizing the onboarding process, tailoring experiences for different customer segments, streamlining the path to your product's "aha" moment, and continuously gathering and acting on feedback, you can significantly reduce your TTV.

Mastering TTV creates a virtuous cycle of customer success, leading to sustainable growth and, yes, improved MRR. So, while it's tempting to fixate on revenue figures, remember that by prioritizing TTV, you're laying the foundation for long-term success in the competitive SaaS landscape. Your future self—and your customers—will thank you for it.