Transcript
Page 1: GHV Webinar - VC Perspectives on Business Metrics for Series A

Accelerator with a Difference

Page 2: GHV Webinar - VC Perspectives on Business Metrics for Series A

Prajakt Raut

Co-Founder - Applyifi

Founder – The Hub for

Startups

Mentor @ GHV Accelerator

Prajakt 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.

Page 3: GHV Webinar - VC Perspectives on Business Metrics for Series A

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.

Page 4: GHV Webinar - VC Perspectives on Business Metrics for Series A

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.

Page 5: GHV Webinar - VC Perspectives on Business Metrics for Series A

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

‘directional roadmap’ on 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 you adjust plans.

Success of a start is NOT in executing a plan well but 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.

Page 6: GHV Webinar - VC Perspectives on Business Metrics for Series A

Some myths about metrics - IT IS NOT ALWAYS ABOUT

IMPROVING YOUR METRICS

• Performance does not always improve with scale e.g.

o Easier to grow faster when smaller

o Early customer acquisition costs may not hold good over time

• Some initial aspects that impact metrics cannot scale e.g.

o E.g. founders selling to companies can have a very different result than sales

teams

o PR efforts and e-mail marketing does not scale beyond a point

o Organically acquired, early customers through connections cannot scale

o SEM, ASO do not scale beyond a point

• Early customer engagement may not hold good at scale

• ARPU may decline over time

Page 7: GHV Webinar - VC Perspectives on Business Metrics for Series A

Prioritize on different metrics at different stages of the venture

Concept stage

• Discover insights about the problem you want to go after

• Discover who is the right customer for that problem

• Understand what the right solution for that problem for that customer is

POC or product development phase

• Focus on metrics that help validate product-market fit

• Feedback from customers

• Customer churn

• DAU/MAU

I.e. focus on ascertaining that people love your product

Page 8: GHV Webinar - VC Perspectives on Business Metrics for Series A

Prioritize on different metrics at different stages of the venture

Pilot/beta stage

• Registrations

• Referrals

• Customer engagement

• Traffic sources / channels

• Communication mediums and messaging

• Pricing

• Test your hypothesis and assumptions on the ‘business'

I.e. focus on discovering what makes more people buy/use your product

Page 9: GHV Webinar - VC Perspectives on Business Metrics for Series A

Prioritize on different metrics at different stages of the venture

Post successful pilot focus on performance improvement on

• Acquiring customers

• Engagement - retention, usage, volumes, periodicity, value

• Revenue

• Business case

• Operational efficiency

Page 10: GHV Webinar - VC Perspectives on Business Metrics for Series A

Metrics differ by business type

• Business 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

Page 11: GHV Webinar - VC Perspectives on Business Metrics for Series A

Spend time to THINK ABOUT METRICS THAT ARE IMPORTANT

Examples of what to track ...

Basics

This month Last month % growth TSM % Goal Deviation

Users

Revenue per transaction

Number of times used/purchased

CAC

Active users %

DAU

MAU

Page 12: GHV Webinar - VC Perspectives on Business Metrics for Series A

Spend time to THINK ABOUT METRICS THAT ARE IMPORTANT

Examples of what to track ...

Source of business

This month Last month % growth TSM % Goal Deviation

What channels are customers coming from

What triggered the action

What days of the week are registrations highest

What time of day are registrations highest

Page 13: GHV Webinar - VC Perspectives on Business Metrics for Series A

Spend time to THINK ABOUT METRICS THAT ARE IMPORTANT

Examples of what to track ...

Engagement

This month Last month % growth TSM % Goal Deviation

Churn rate

Time spent on site

Number of pages visited

Features used

Support query raised

Page 14: GHV Webinar - VC Perspectives on Business Metrics for Series A

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 what’s important 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.

Page 15: GHV Webinar - VC Perspectives on Business Metrics for Series A

Some points to remember

• Drill down on red flags. E.g. If registrations or conversions are lower than

expected, check what is the cause i.e.

o Is it because the product sucks

o Is is because the price-point is high

o Is it because the value proposition is not meaningful

o Is it because the communication does not clearly state the value

proposition

o Is it because the medium is not right

o Is it because the target audience was not correct

o Is it because the brand personality or UI was not good enough

o Any other reason

Page 16: GHV Webinar - VC Perspectives on Business Metrics for Series A

Some points to remember

• Drill down on green flags e.g. if something is working well, don’t just

celebrate. Analyze what worked. So that you can replicate it.

• 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

o Acquisition

o Activation

o Retention

o Referral

o Revenue

Page 17: GHV Webinar - VC Perspectives on Business Metrics for Series A

Summarizing

• Metrics provides actionable insights about your business

• Develop metrics on what’s relevant for you

• Different metrics are relevant for different businesses –

identify what’s 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

signs

• Startup phase is about discovering what works. Growth phase

is about replicating what works.

Page 18: GHV Webinar - VC Perspectives on Business Metrics for Series A

GHV Accelerator with a Difference

Series A-ProgramPartnerships

Secret sauceSystems ready to support efficient scaling

Promising unit economics

Micro-market leadershipBig accessible market

The right people


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