Accelerator with a Difference
Prajakt RautCo-Founder - ApplyifiFounder The Hub for StartupsMentor @ GHV AcceleratorPrajakt is an entrepreneur and entrepreneurship evangelist. Prajakt's personal goal in life is to encourage and assist a 100,000 people to become entrepreneurs. Prajakt mentors startups on strategy, business model & monetization, fundraising and on preparing the company for growth. What are metrics?Parameters used for quantitative assessment of performance and progress.Goals are about where to go - strategy is about how to go - metrics are about tracking progress of your journey.
Startup phase is about discovering what works and what does not. Scale up phase is about replicating what worked.Metrics help you understand what is working and what is not.Metrics provide early warning signs - whether good or bad.Helps you adjust your plans
Because you do not want to discover at the very last that you progressed well, but in a different direction, or were going in the right direction but at a different pace than estimated.
Why track metrics if B-Plans never go as planned? Why metrics when the startup stage is about unpredictable outcomes?Precisely because of that. B-Plans provide a framework for a directionalroadmapon which basis you plan your strategy and align your resources.If you do not measure how you are progressing on that plan, you will not have inputs to help youadjust plans.Success of a start is NOT in executing a plan wellbut in adjusting plans efficiently, appropriately and effectively in order to go in the direction the venture was intended to.Metrics help you make better-informed decisions.
Some myths about metrics - IT IS NOT ALWAYS ABOUT IMPROVING YOUR METRICSPerformance does not always improve with scale e.g. Easier to grow faster when smaller Early customer acquisition costs may not hold good over timeSome initial aspects that impact metrics cannot scale e.g.E.g. founders selling to companies can have a very different result than sales teams PR efforts and e-mail marketing does not scale beyond a pointOrganically acquired, early customers through connections cannot scaleSEM, ASO do not scale beyond a pointEarly customer engagement may not hold good at scaleARPU may decline over time
Prioritize ondifferent metrics at different stages of the ventureConcept stageDiscover insights about the problem you want to go afterDiscover who is the right customer for that problemUnderstand what the right solution for that problem for that customer isPOC or product development phase Focus on metricsthat help validate product-market fitFeedback from customersCustomer churnDAU/MAU I.e. focus on ascertaining that people love your product
Prioritize ondifferent metrics at different stages of the venturePilot/beta stageRegistrationsReferralsCustomer engagementTraffic sources / channelsCommunication mediums and messagingPricingTest your hypothesis and assumptions on the business'I.e. focus on discovering what makes more people buy/useyour product
Prioritize ondifferent metrics at different stages of the venturePost successful pilot focus onperformance improvement onAcquiring customersEngagement - retention, usage, volumes, periodicity, valueRevenueBusiness caseOperational efficiency
Metrics differ by business typeBusiness that depend on ad revenues will have different metrics than business that depend on subscription. Even if the product is the same.
DAU will be very relevant for a wearable fitness device, not so much for an e-commerce site and certainly not relevant for a OTA
Vertical e-commerce businesses will have different matrics than horizontal marketplaces
SAAS ventures may have different metrics than software products
Spend time to THINK ABOUT METRICS THAT ARE IMPORTANTExamples of what to track ...BasicsThis monthLast month% growthTSM %Goal DeviationUsersRevenue per transactionNumber of times used/purchasedCACActive users %DAUMAU
Spend time to THINK ABOUT METRICS THAT ARE IMPORTANTExamples of what to track ...Source of businessThis monthLast month% growthTSM %Goal DeviationWhat channels are customers coming fromWhat triggered the actionWhat days of the week are registrations highestWhat time of day are registrations highest
Spend time to THINK ABOUT METRICS THAT ARE IMPORTANTExamples of what to track ...EngagementThis monthLast month% growthTSM %Goal DeviationChurn rateTime spent on siteNumber of pages visitedFeatures usedSupport query raised
Some points to remember Metrics are like GPS, not the vehicle. It can tell you where you are, but cannot take you there. Measuring is one thing, acting on it is more important. Some metrics need to be seen every day, some every week, some every month. Make time for it.Focus on whatsimportant and what can give you actionable insights. Not just feel good factor. Increasing number of FB likes is useless unless you have a plan to leverage them meaningfully.
Some points to remember Drill down on red flags. E.g.If registrations or conversions are lower than expected, check what is the causei.e.Is itbecausethe product sucksIs is because the price-point is highIs it because the value proposition is not meaningfulIs it because the communication does not clearly state thevalue propositionIs it because the medium is not rightIs itbecause the target audience was not correctIs itbecause the brand personality or UI was not good enoughAny other reason
Some points to remember Drill down on green flags e.g. if something is working well, dont just celebrate. Analyzewhat worked. So that you can replicateit.At startup stage, share relevant metrics with entire team - let them know how well/bad we are doing, and what we are doing about it.AARRR framework AcquisitionActivationRetentionReferralRevenue
SummarizingMetrics provides actionable insights about your businessDevelop metrics on whats relevant for you Different metrics are relevant for different businesses identify whats right for you Do not use metrics to make you feel happy try and find out things that will trouble you use metrics to get early warning signsStartup phase is about discovering what works. Growth phase is about replicating what works.
Series A-ProgramPartnershipsSecret sauceSystems ready to support efficient scalingPromising unit economicsMicro-market leadershipBig accessible marketThe right people
GHV Accelerator with a Difference