10 Marketplace KPIs That Matter

(1) SCALE

(2) MARGIN

(3) MOMENTUM

  • Growth should be accompanied by attractive contribution margins and unit economics in order to be economically sustainable in the long run; we don’t like “growth at all costs”!
  • Set in place operational processes to allow for the current pace of growth to continue smoothly in the future. E.g. sometimes early-stage startups handle transactions in ways which are not fully automated, in order to fail & learn fast. While this is encouraged and justifiable in the short-run, in the long-run it can be unforgiving, and you should be mindful towards not accumulating undue amounts of “operational debt”
  • Seasonality — certain verticals (e.g. real estate, travel, recruiting) experience strong variation in business throughout the year. In these cases YoY figures would be more accurate than MoM figures to gauge actual growth

(4) ACTIVITY

(5) ENGAGEMENT

(6) RETENTION

(7) CONCENTRATION

(8) ACQUISITION

  • Avoid an overwhelming dependency on a single channel. That can easily turn against you (SEO is a classic example, as Google can change their page ranking algorithm overnight), or the channel you rely on may not scale (the partners selling you leads may tap out eventually)
  • Relate channel breakdown with CPAs and retention, to understand if different channels generate new users at a similar cost and with a similar ROI
  • The more word of mouth and organic traffic, the better

(9) ROI

(10) CASH

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Venture at @accel

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Andrei Brasoveanu

Andrei Brasoveanu

Venture at @accel

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