startup month metrics kpi performance goals

techsuch May 9, 2021 0 Comments

34 Types of Startup Metrics to Measure (with Examples)Startup metrics and key performance indicators (KPIs) are important tounderstand and keep track of so your startup can measure, analyze, and growyour business using data, rather than blindly trying to grow.But not all key performance indicators were created equal. And not all KPIsthat are applicable to different types of startups are the right match foryour startup. That’s why it’s important to use the right metrics to measureperformance.This post goes over: 1. The definition of a key performance indicator 2. Startup KPI examples 3. A list of 34+ startup metrics with definitions 4. KPI goals 1. Finding your startup’s north star metric with examples 2. KPI goal setting 3. Reverse engineering outcomes for startup KPI goals 4. Insight into “S.M.A.R.T. KPIs” 5. Keeping track of and measuring your goals 6. How to avoid getting paralysis by analysis 5. Conclusion## Definition of a Key Performance Indicator (KPI)Just in case you’re brand new to key performance indicators, I’ll give you thedefinition.KPIs are certain metrics that you use to measure and determine the performanceof outcomes, behaviors, initiatives, and/or activities in your business.## Startup KPI Examples: * Month over month sales from marketing campaigns (MoMS) * Email open rates (EOR) or click through rates (CTR) of your email blasts * Rate of money spent per month (burn rate) * Conversion rates for lead magnets for visitors becoming email subscribers. (Visitor to lead conversion rate) * Conversion rates for visitors into free trials and from free trials into paid customers. (Visitor to free trial conversion rate) & (Activation Rate) * Amount of cash flow coming in and recurring monthly (MRR), quarterly (QRR), annually (ARR), etc. * Average time spent on your website (average session duration) * Time spent on a page (time on page) * Returning visitors to your app or website (returning visitors) * Daily, weekly, or monthly active users on your app or website (DAU, WAU, and MAU, respectively) * The rate in which visitors come to your website and leave without any interactions or clicks (bounce rate) * User satisfaction (net promoter score (NPS))## List of Startup KPIsThere are quite a lot of key performance indicators that can be used tomeasure startup performance.Below, you’ll find the more than the 34 types of startup metrics as shown inthe infographic and what each KPI means.1) MRR (Monthly Recurring Revenue) = The amount of revenue you make thatrecurs monthly2) ARR (Annual Recurring Revenue) = The amount of revenue you receive thatrecurs yearly3) ARPA (Annual Revenue per Account) = MRR / Total # of Customers4) Gross Profit = Total revenue minus the cost of goods sold5) TCV (Total Contract Value) = Value of one-time and recurring charges6) ACV (Annual Contract Value) = The value that a contract will bring to yourbusiness annually7) LTV (Lifetime Value) = Prediction of the net profit from the entire futurerelationship with a customer8) Deferred Revenue = Amount that was received by a company in advance ofearning it9) Billings = Current quarterly revenue + deferred revenue from the previousquarter10) CAC (Customer Acquisition Cost) = How much it costs, on average, toacquire a customer11) CCR (Customer Concentration Risk) = Revenue from largest customer / totalrevenue12) DAU (Daily Active Users) = The number of users that return to yourstartup’s site or app on a daily basis13) MAU (Monthly Active Users) = The number of users that return to yourstartup’s site or app on a monthly basis14) Number of Logins = The amount of times users have logged in to your portal15) Activation Rate = Number of users taking a specific action to get valueout of a product16) MoM (Month-on-Month Growth) = The rate of growth from month to month,comparing the the current month or past 30 days to the previous month or last31 to 60 days.17) CMGR (Compounded Monthly Growth Rate) = (Latest Month/First Month) ^ (1 /# of Months) – 118) MCR (Monthly Churn Rate) = Lost customers this month / prior month total19) Retention by Cohort = % of original installed base (1st month) that arestill transacting20) GCR (Gross Churn Rate) = MRR lost in a given month / MRR at the beginningof the month21) Net Churn = (MRR lost – MRR from upsells) this month / MRR at thebeginning of the month22) Monthly Cash Burn Rate = How much money you spend per month (gross)23) Net Burn Rate = Revenues – gross burn24) Gross Burn = Monthly expenses + any other cash outlays25) TAM (Total Addressable Market) = Revenue opportunity available for aproduct26) ARR (Annual Run Rate) = Projection of current MRR into the future,annualized27) Gross Margin = Difference between revenue and cost of goods sold28) Sell-Through Rate = Number of units sold in a period/number of items atthe beginning of the period29) Network Effects = Effect of one user on the value of that product to otherpeople (example: Metcalfe’s Law)30) Virality = Viral coefficient = average number of invitations sent existinguser * conversion rate of invitation31) NPS (Net Promoter Score) = How likely user is to recommend your product toa friend32) Platform Risk = Dependence on a specific platform or channel33) Direct Traffic = Traffic coming directly to your site via a link orentering the URL34) Organic Traffic = Unpaid traffic from search results## KPI GoalsBefore you can measure any marketing campaign or startup website performancemetrics, it’s crucial to have numerical goals which are measured with KPIs.And, when you create goals for your startup, then you’ve got to find your topone or two KPIs.These top KPIs are called your “North Star(s).”However, it’s ideal to choose one KPI for your north star over all others.### 1) Finding Your North Star(s)You can find your north star(s) by analyzing what are the most importantmetrics for your startup.These north star metrics are the most important metrics for startups to focuson and they allow your startup to formulate a plan which synergisticallybuilds your startup strategy around that north star.Think about it: what is the ONE main driver of growth for your startup and howcan you measure and align your business initiatives around that one driver ofgrowth?For instance:Some companies make free trial signups and paid conversions to be their mostimportant metrics and do that because they know they’ll have a higherlikelihood of getting a customer that way.Some startups might have an easy time getting new customers in the door buttheir largest focus is on customer retention.Facebook’s #1 north star was daily active users and still is. So their focusis keeping people on the platform and keeping them engaged on it daily.Which KPIs you use, specifically, are up to you and your startup to decidebecause they depend on the goals of your website, product, and/or service.### 2) KPI Goal Setting### Goal SettingIf a startup sets loose goals, then they’ll achieve mediocre results.Set specific goals for your each of startup’s your main metrics to have thebest results.Just in case you don’t know how to do that I’ll show you in the followingsections. 🙂### 3) Reverse Engineering Outcomes for Startup KPI GoalsThe second habit in the best-selling book The Seven Habits of Highly EffectivePeople by acclaimed self-help author, Stephen Covey, is to “begin with the endin mind.” And this is so true.I’ve found it’s both helpful and important to set numerical goals with timeframes to achieve them by with both startups and in life.To help you achieve your numerical goal, try reverse engineering your goalfrom the desired end result divided by the number of days and weeks it willtake to reach that goal.With reverse engineering, we want to get as granular as possible. That’s whyyou split it up into days and weeks.It’s also due to the fact that if there’s a loose weekly goal or a monthlygoal, then you’ll probably have poor results and won’t be able to correctlyreverse engineer your efforts.Nobody wants that. Below you’ll see the nuts and bolts that allow you to reachthose goals.#### Aligning Activities Towards Your Goal(s)Make a list of all of the things that you can do to achieve the outcome you’relooking to get and write all the things you can do to make it happen for thecampaign so you can achieve the highest conversion rate for that one specificnorth star.It may be that you’ll be using a mix of the following: * Content marketing on social media * Email marketing * Push subscription notifications * Facebook messenger notifications * Instagram and Facebook live videos * YouTube videos * Posting on your social media pages, timelines, and groups * Talking about it in your community/niche channels and groups * Paid ads * Lead flows within your website * New landing pages for the specific campaign or goal * Partners promoting with/for you * Influencer marketing### 4) Insight into “S.M.A.R.T. KPIs”According to Pyramid Analytics, an analytics and business intelligence suite,SMART is an acronym that stands for: Specific, Measurable, Actionable,Relevant, and Timely. And they gave us permission to share their expertise onKPI effectiveness and SMART KPIs through the image below.Image captured from PyramidAnalytics.comYour startup’s north star should be SMART, as should your other most importantmetrics. When you align your marketing efforts towards increasing north starand KPI effectiveness, you’re going to be able to get measurable results thatare very likely to increase your bottom-line (usually revenue).### 5) Keeping Track of and Measuring Your GoalsIn addition, having a handful of your top key performance indicators trackedin a spreadsheet will help you significantly because you can then have laser-focused attention to what matters most for your startup.Below is an example of a SaaS spreadsheet metrics dashboard created in GoogleSheets by Growth Everywhere.### 6) Reviewing Analytics Reports Can Be Time-Consuming – How to AvoidGetting Paralysis By AnalysisBob Parsons, the Founder of GoDaddy, once said: “Anything that is measured andwatched, improves.”I would have to disagree because you don’t want to suffer from paralysis byanalysis and keep reading and analyzing and waste your time.It’s so easy to fall into this trap. I know because it’s happened to meseveral times haha. Please learn from my mistakes.To avoid wasting your time via paralysis by analysis, I recommend to schedulespecific times every few days to monitor your conversion rates.I like Fridays because it’s the least active day business-wise and I canschedule the changes I need to make to optimize StartupDevKit for the nextweek. I will also look towards the end of the business day, depending on whatI’m doing.## ConclusionKey performance indicators are the startup metrics that are going to be yourbest friends. They are how you measure your startup’s growth and everything inbetween.If you’re new to using analytics and you’re learning about key performanceindicators, try to not get overwhelmed and have confidence that you can learnit. This is going to be especially important if you’re a first time startupfounder because every startup founder needs to be able to understand the dataand how it translates into business performance.Do you have any questions? Post them in the comment section below!If not, what KPIs are the most important to you and why?Infographic Image Credit: Funders and Founders

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