Why this? Why now?

When Pablo and I started Epic Labs, it was with the mission to help companies use operational data to make better decisions and achieve the best financial outcomes.

We chose the name “Epic” because it refers to a long and heroic journey, which describes every successful company. We have both started and operated many companies and we understand and respect the fortitude, intelligence, and complexity required to do a good job.

Epic Labs is here to help companies make more money — to acquire more customers and retain them for longer. We do this by building technology and software — turning data into information, and using information to make better decisions and increase shareholder value.

Make better decisions

The first law of any company is to increase shareholder value. All financial outcomes for a company are the result of the human decisions and execution.

Our path at Epic Labs is to help executives make the right decisions, implement the resulting strategy, and be a partner in the journey to achieve the desired financial outcomes. The key phrase is “make the right decisions”, so let us expand on that idea and how we think about it.

What is a “good” decision?

A “decision” is the selection of a course of action. Your business strategy is simply the decisions you make toward achieving your goals.

A company is the culmination of all the decisions people have made throughout its history. In the beginning of a company, decisions are often based on gut instinct or trial-and-error. As the company matures, the executive team expands, the stakes increase, and the decision process must mature. At this point decisions begin to be made on data.

For our purposes there are two types of data in a company.

1. Operational data, which leads to
2. Accounting data

Every executive and manager relies extensively on financial data. It’s the scorecard that tells us whether previous decisions and implementation is working. At any company more mature than a startup, there are multiple people working on measuring financial outcomes, because everything ultimately is reflected on a financial outcome.

But managerial accounting is not sufficient for decision making because it focuses on financial outcomes only. Financial outcomes are clearly the most valuable results, but few people have enough clarity to understand the detail behind those numbers and replicate the results. I.e., there is no clear connection between business decisions, non-financial metrics, and the financial outcomes. And this manifests itself with more “gut instinct”, more political power plays, more risk.

This trouble is not due to a lack of data! Companies have a lot of data, and there’s always a way to report on and keep track of the data. Thus, the problem does not rely on data availability but in creating a system that connects your decisions, non-financial metrics, and financial outcomes.

Photo by Martin Sanchez

All the data, none of the intelligence

Yes, there is a lot of data, but as the saying goes, there is very little information, and even less intelligence.

In fact, there is a big black hole between the company’s operational metrics and its financial outcomes. The art of connecting non-financial metrics to financial outcomes has not advanced despite cutting edge business intelligence, excel modeling, and in-house custom reports.

The problem is even bigger than what it seems at first, and nobody talks about it! People in business often connect “aggregate” metrics like AOV and ARPU to give the black hole some substance, but those kinds of metrics are bad averages and don’t tell us much other than if the numbers are improving or not. Some of the most important questions in business get sucked into the black hole and are forgotten or taken for granted, like:

• Should you grow or optimize? Of course you should grow! Right? Not if you realize your unit economics are bad — then growth just makes the hole bigger.
• What is the quantified value of your brand? Is branding spend even necessary? Given a well-known brand and an unknown brand selling the same product for the same price, nearly every consumer would opt to buy the well-known brand.
• In a world of limited resources, how do you know which operational metric will move the desired financial metrics? There is a causal relationship between moving parts of your business which can be quantified and intelligence resource allocation can result.
• What are the most valuable segments of your customer base? Do you treat all customers the same? Your company is almost certainly not paying enough attention to some group of customers, and too much attention to another group. Pareto analysis, RFM analysis, and business driver quantification can play an enormous role in how you look at your customer base.
• Do you know the actual LTV of your customers? If you have already segmented, projected, and discounted all future revenues using survival analysis, then you’re on the right track. If you assign an arbitrary lifetime to a customer, you might be significantly discounting the value of your clients (and therefore your company).

Once we connect our business decisions with non-financial metrics and financial outcomes, we create a system that helps us answer the most critical questions. And makes us rethink our initial decisions.

Acquitention = Acquisition + Retention

Acquitention is our repeatable and reliable strategy to connect non-financial metrics to financial outcomes. It is the result of decades of experience. Acquitention is only possible when you connect the moving pieces of your business.

The questions

The first thing we must do before starting any project is to identify the core questions to answer. We have been there many times and here are some questions we can help you answer:

• What is the potential addressable market? Is there still room to grow?
• Who are my key customers?
• How is customer retention (or repeat rates) by segment?
• Which are my most effective marketing channels?
• What is the LTV/CAC and is it getting better or worse over time?
• How can I quantify customer satisfaction and improve it?
• How valuable is the installed customer base (customer equity)
• Is customer quality improving or declining by cohort and by age over time?
• How much should be spent on brand vs direct marketing?
• Where should resources be focused to achieve growth?
• …and many others!

Starting the journey, together

Many operators don’t have clarity about how their operations or day-to-day decisions lead to the desired financial outcomes. We can help.

Many operators lack the confidence to make important resource allocation decisions because they are drowning in data, without enough information. We can help with that.

Many operators want to collaborate with proven professionals to have a better chance of making the best decisions. We would love to be that partner.

We are partners in this epic journey. We are deeply interested in our work, and our primary objective is to help companies use operational data to make better decisions and achieve the best financial outcomes.

Reach out to schedule a call to talk about your company and your needs.