The blog here is a concise write up of the webinar, Art of Reporting by Vijay Gummadi, organised by 50K Ventures. Vijay has founded Carz, SmartAuto and Autorox with acquisition of Autorox by a Japanese automobile manufacturer. The webinar takes one through the importance of management reporting, KPIs required, what and who to report to. Find the recorded webinar here.
The basics of reporting is to be accountable to all your stakeholders. As a startup, reporting becomes essential to help the founders introspect and understand their business better. It also builds trust with investors. The core principles of reporting is to be simple, reliable and honest. The frequency and the depth of reports would be based on the stage of the company and if the stakeholders are internal or external. Reporting creates data for everyone to analyse and can be a source for business intelligence.
Stage wise reporting:
- At pilot/PoC stage, usually the team is small. The company would be running experiments and the results need to be shared and discussed with the core team. Usually, there are no external investors at this point, hence there would be high frequency internal reporting. It would be daily or an hourly update and it can be informal by nature.
- At the stage of initial traction, it is expected to have angel investors, a few paying customers and mentors/advisors. Internally, the reporting would still remain high frequency. For external parties like the angel investors and advisors it would based on the Shareholder agreement and the information rights. External reporting can be done on a monthly basis or quarterly at the least.
- During the Growth stage, the KPIs that reported transform based on the product or service. As the team grows, the reporting becomes a little less frequent internally and can be done every month. The external reporting will take a more formalised shape and shall be given out every month or quarter.
- High growth: The investors would be given projections at the start of every quarter and while reporting it is important to indicate the actuals against the projections. This would help the founders and investors in understanding what is or is not working for the company.
Every report must be able reflect the true picture of the company’s performance. This information must be contextualised to help the target audience understand and give inputs. To ensure reporting is a part of the company’s culture mechanisms and systems must be set in place. The data would be rich in evidence to retrospect and learn from.
A report must be able to throw light on the financial, operational, product development, business aspects of the company. It is also important to share any qualitative updates about the wins and losses, new competition, challenges one is encountering and any insight that founders have learnt about their industry.
As founders by creating meticulous reports, one is building trust with investors and stakeholders that would help them even as they launch new ventures in the future. A systematic reporting system will also be the evidence for founders as they share the success story.