How do you measure success? January is a great time to review goals, look at past performance and reset the metrics that matter. As a startup founder, developing your key metrics can be challenging, particularly in the early stages, because your focus is squarely on growing the business. Gathering the right metrics in this phase can be complicated and time-consuming.
If you are a software business, for example, measuring how much it costs to win a customer (customer acquisition costs CAC) and the stickability of a customer (Lifetime Value LTV) are key measurements that an investor will look for. Yet, both can be difficult to track as a scale-up:
Customer acquisition cost (CAC) can be difficult if your startup has multiple sales channels, if the sales process is complex, or if you are still working out who your clients are. Measuring lifetime value (LTV) can be difficult if your customers have different levels of engagement, if you have a high churn rate or if you don’t yet have a system for measuring churn.
Making sense of it all, starts with defining what you mean by success and then creating a system that allows you to measure and gather the appropriate data easily. Start simple - use Excel, Monday board or a free dashboard from a CRM like Hubspot. You can add complexity later as you learn what your business requires. But aim to be systematic, have an easy method to add information and add it regularly. You don’t want to be sitting there on a Friday afternoon, up against it, trying to work out how many people you’ve spoken to this week or what your CAC is.
If you need help defining what's important or building a system to make your chosen metrics appear at the touch of a button - Zaidaan can help. We’ve been through this process in several early-stage businesses and having seen the pitfalls and pain first-hand, we can help you navigate the process of setting up your own system.
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