Wed, 29 December 2021
Metrics by Startup Objective
Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.
A startup’s objective changes as it moves from early to later stages.
Here’s a list of metrics by stage objective:
In the earliest stages of the startup, look for conversions.
Basic validation is important to prove the market wants the product.
This exercise will teach you what type of customers to pursue.
In the next stage, measure the CAC:LTV ratio which is the customer acquisition cost and lifetime value of the customer using a minimum viable product.
This exercise will validate you have a profitable business.
In the next stage, use MRR or monthly recurring revenue to test the repeatability and predictability of your business model.
This exercise will help you refine your business processes.
Next, measure retention.
This exercise will validate you have a business that can grow revenue rather than just maintain it.
Finally, measure recognized revenue which is the revenue for which you have provided the service while the remainder is deferred revenue.
This exercise will validate you have a self-sustaining business.
In each stage, focus on the metric that helps you prove you are on the right track.
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