Alright, in a rare break from how I tend to write, no narrative this time besides this which you’re reading now. A list! The KPIs (Key Performance Indicators) your startup should have.
More importantly, Startup KPIs must be:
- Well defined
- Quantifiable
- Communicated throughout your team
If they’re not, they’re not KPIs, they’re distractions or vanity metrics.
Money Metrics
- Profit: both gross and net profit margin.
- Cost: Measure cost effectiveness and find the best ways to reduce and manage your costs.
- Revenue vs. Target: Comparison between your actual revenue and your projected revenue.
- Cost Of Goods Sold: Tallying all production costs.
- Sales By Region: Better feedback for underperforming regions.
- Expenses vs. Budget: Compare your actual overhead with your forecasted budget.
Customer Metrics
- Lifetime Value (CLV): Use this to narrow down which channel help you gain the best customers for the best price.
- Customer Acquisition Cost (CAC): Divide your total acquisition costs by the number of new customers in the time frame you’re examining.
- Customer Satisfaction & Retention: Use customer satisfaction scores and percentage of customers repeating a purchase.
- Net Promoter Score (NPS): Quarterly surveys to customers to see how likely it is that they’ll recommend your organization to someone they know.
- Number Of Customers: How many have you gained and lost? Are you meeting their needs and expectations?
- Site Value: Immediately applicable with offline businesses as well, instrument your site’s analytics to report Value and then constantly strive for a greater number.
Performance Metrics
- Conversion Rate: This is a metric that could be (should be) constantly improving; at least until you reach a point where it seemingly can not be further improved after weeks or months of trial.
- Customer Support Tickets: Analysis of the number of new tickets and the number of resolved tickets.
Team Metrics
- Turnover Rate: Take the number of employees who have left the company and divide it by the average total.
- Employee Satisfaction: Measure employee satisfaction through anonymous surveys.
On money: Cash on hand and burn to get to runway or fume date
you. forgot. ping. pong. skills. metrics. PAUL.
after advising 55 companies we’ve started including metrics from the customer’s point of view in the list of KPIs. (ex time/cost savings or ROI for a B2B product). Otherwise it’s really easy to forget about the customer as no customer cares about the internal metrics
Great topic & great list!
I’m a big believer in the core KPI being specific to the stage/venture.
Here’s some others that were discussed recently or that I’ve used…
SaaS:
-Daily Active Users (DAU) vs. mere customers
(Or Weekly/Monthly Users)
-Churn (subscribers lost)
-MRR vs. mere revenue
Early stage:
-Burn
-Runway
Also discussed:
Paid units shipped… for early stage vs. mere revenue because price can fluctuate causing revenue to look uneven while you hammer out the ideal price point to grow units shipped M/M.
In a similar way Lead Gen / Marketing teams might prefer:
-MQLs
-SQLs
I’ve also used…
-Time to hire (we get people hired)
-Sales: Time to close
For education closing deals on average < 4 weeks was a key differentiator in a space that often saw 6-12mo sales cycles
-Hours of coding on platform / issue points
Early 2019 was a time to reinvest in our product and reinvest in my own full stack skills so I could lead from the front…
I think also development of products / new lines has potential KPIs, depending on the nature of the venture.
100!
Adam, Duh. LOL. Good one.
I suppose I neglected it because working with so many incubators and founders just starting out, that metric is now zero. Let’s first try to get to where it’s not.
On product / performance: backlog and burn down rate, lead and cycle time. On money: investment, cost of capital, return on sales.
This is awesome!