Startups have a lot of metrics. It is easy to get lost. The North Star Metric may be the most important, but don’t forget about active paying users, unit economics, MRR, NPS, all while you grow 10% a month.
For founders, measuring everything can be overwhelming, and makes it difficult to manage pitch meetings with potential investors. Venture capitalists want you to know your numbers, and expect you to determine which are the right ones to measure for your business model and stage of growth.
Here are some ideas for how to organize your metrics, and thought process:
Track with your team weekly
Founders need to find and acquire customers in order to grow. Weekly tracking forces the entire team to observe, react, and adjust on the fly in order to meet double-digit monthly growth targets.
Questions to answer: What can we do better next week? Are we tracking to meet our growth targets?
- Metrics: Website visits, Client calls, Sales Funnel, Conversion on A/B tests
- Audience: This is mostly internal, to experiment and change tactics. Some investors may ask in order to determine how your sales process works.
- Tools: Google Sheets, Google Analytics, Hubspot (See Tools for Startups)
- Content: Internal sales reports
Measure status with co-founders and advisors monthly
Founders need inputs in order to make strategic decisions and understand where value is coming from. Cohort analyses and unit economics allow you to draw conclusions about customer behavior and can provide insights on the business model and profitability.
Questions to answer: How profitable is this business right now? Do we have a competitive advantage? How attractive is this customer profile? Are we pricing correctly?
- Metrics: LTV, CAC, Cohorts, Unit Economics, Gross Margin, Active Users, MRR, Monthly growth
- Audience: Both internal and external
- Tools: Google sheet, Excel
- Content: Monthly emails to investors and advisors
Show potential investors quarterly trends
Founders want to show potential investors trends and convince them the startup is entering an inflexion point. Sending monthly data can sometimes be distracting, especially in the early stages of a business. This is where sharing quarterly information can help in storytelling.
Questions to answer: Are milestones being met? Are we at an inflection point? Are we trending in the right direction despite all the noise?
- Metrics: Revenue, GMV, Booking, ARR, Ratios that indicate scale (ie. revenue per client, revenue per transaction, revenue per employee)
- Audience: This is mostly external for potential investors. It can also be helpful for your team in order to take a step back and see how far you have come.
- Tools: Google sheets, Docsend
- Content: Pitch to potential investors