How do you measure performance and productivity at an early-stage startup?
As much as we may all like to only look at one number for all of our analysis, we need to manage the business at all levels simultaneously. For this reason, we’ve cooked up our four-layered cake of core metrics with which to keep an eye on the daily, weekly, and monthly activity. The layers are as follows:
Strategic business metrics — these are the fundamental subscription business model numbers including average revenue per account (ARPA), customer acquisition cost (CAC), lifetime value (LTV), monthly recurring revenue (MRR), annual recurring revenue (ARR), churn rate, and gross margin.
Strategic operational metrics — this is where we’ve adopted the Slack approach and selected key metrics for each functional area across the business. From average scroll depth on pages produced by our content team and return on ad spend in the digital sales team to the number of vacancies filled by our talent acquisition team, this layer ensures that we keep all teams and departments accountable for their performance and all pulling in the right direction.
Traction metrics — as in any early stage company, resources are far more limited than any of us would like, this means that we must apply all resources only to the activities which yield the biggest result fastest. Often this means a heads up comparison between activities which many will tell you should not be compared. Email vs Facebook ads vs PPC vs Referral Marketing, for example.
Intra-channel metrics — these are the day to day metrics we assess per channel to identify opportunities for micro adjustments. Examples include ad campaign data, top line Google analytics data, user events data and all of the product performance data to ensure that our platform is humming along as it should.