Metrics are measures that are used to monitor and evaluate all the different parts of a business. Good metrics aren’t just about raising money from VCs … they’re about running the business in a way where founders can know how — and why — certain things are working (or not), and then address them accordingly. In other words, metrics aren’t just for pitching but for discussing in subsequent board quarterly updates, and management meetings. “Drive with them, don’t just ‘report’ them”.
The following metrics are important to track in startups:
Business and Financial Metrics
- Bookings vs. Revenue
- Recurring Revenue vs. Total Revenue
- Gross Profit
- Total Contract Value vs. Annual Contract Value
- Life Time Value
- Gross Merchandise Value vs. Revenue
- Unearned or Deferred Revenue… and Billings
- Cost Acquisition Cost… Blended vs. Paid, Organic vs. Inorganic
- Total Addressable Market
- ARR ≠ Annual Run Rate
- Average Revenue Per User
- Gross Margins
- Sell-Through Rate & Inventory Turns
- Cumulative Charts
Product and Engagement Metrics
- Active Users
- Month-on-month
- Churn
- Burn Rate
- Downloads
Presenting Metrics Generally
- Cumulative Charts (vs. Growth Metrics)
- Chart Tricks
- Order of Operations
- Truncating the Y-Axis
Economic and Other Defining Qualities
- Network Effects
- Virality
- Economies of Scale
Other Product and Engagement Metrics
- Net Promoter Score
- Cohort Analysis
- Registered Users
- Active Users
- Source of Traffic
- Customer Concentration Risk
Checking metrics is almost like doing a health check for your baby at the pediatrician’s office. Check weight and height, and then compare to previous estimates to make sure things look healthy before you go any deeper!
Source:
Dhruvesh’s Blog 