Thu, 6 January 2022
Start With Your Key Metric
Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.
There are many metrics you can use to guide your startup.
In the growth stage, start with your key metric that captures what drives growth.
You can either focus on the total number of users or look at the total number of actions the user takes.
Look for the value that is created and tie your metric to it.
This is typically not revenue but rather what drives revenue.
In a SaaS business, it’s the number of contracts signed.
In a marketplace business, it’s the number of transactions.
In a mobile app, it’s the number of active users.
Set a goal to reach each month.
Run a series of cohorts in which you apply an action and measure the impact on the metric.
As the business grows, you may need to capture a second or third metric to understand what actions provide the best growth.
You can apply this method to retention to identify the actions that provide the greatest return.
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