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The Art of
Startup Metrics
How to define and manage
your success metrics
European Innovation Academy
July 2016
Bill Reiche...
The Art of Startup Finance
Financial management for
startups is not …
• Business School finance
• Fundraising drill
• Marketing metrics
The Art of St...
Startup Finance is …
• Turning your vision into a
business
– Converting your objectives into
quantifiable metrics
• Valida...
Business Model Formula Framework:
• We sell [product or service] to [target customers].
• The reason our customers buy our...
Confidential6
Your Management Dashboard:
Key Metrics
for your startup company
The top seven metrics you need to measure,
m...
What is the Number 1 reason
startup companies fail?
. . . they run out of cash
The Art of Startup Metrics
1. Cash
- What is your Burn Rate?
- What is your Net Cash position?
- How much Runway do you have?
The Art of Startup Metr...
2. Product
- Are you on time, on budget?
- How do users rate your features?
- Net Promoter Score
The Art of Startup Metrics
The Art of Startup Metrics
Net Promoter Score:
3. Marketing
- Qualified Leads?
- Validation of Core Value Proposition
- Validation of Marketing Channels
- “Viral” coeffi...
4. Sales
- Sales force/rep Productivity?
- Sales Cycle (offline)?
- Conversion rate (online)?
The Art of Startup Metrics
5. Customers
- Growth rate of customer base?
- Customer Acquisition Cost (CAC)?
- Customer Lifetime Value (CLV/CAC)?
- Pro...
6. Support
- Customer satisfaction/engagement?
- Customer churn?
The Art of Startup Metrics
7. Team
- Alignment and morale?
- Performance and skills?
- Recruiting and retention rates?
The Art of Startup Metrics
CustomersCash Team
Product Marketing Sales Support
Startup Management Dashboard
The Art of Startup Metrics
Confidential17
The Art of Startup Metrics
Confidential18
The Art of Startup Metrics
Confidential19
The Art of Startup Metrics
Confidential20
The Art of Startup Metrics
Objectives, Deliverables, Metrics
Other Metrics:
• Price: How do you test price/value assumptions?
• Costs: Do you have alternative cost models?
• Competiti...
Building and Using your Management Dashboard:
• Simple: The best is the enemy of the good
• Open: Templates and investment...
Final Note: Monthly Management Reports
• Standardize early: Produce monthly financials,
dashboard summary, and key action ...
The Art of
Startup Finance
Online course at
Kauffman
Founders School
Resources for Entrepreneurs
http://www.entrepreneursh...
Art of the Start
Online course at
Skillshare.com
Resources for Entrepreneurs
For questions, comments, or
slides
reichert@garage.com
@billreichert
R E S O U R C E S F O R
E N T R E P R E N E U R S .
G...
The Art of
Startup Metrics
Bill Reichert
Managing Director
Garage Technology Ventures
Capital for Innovation
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EIA2016 - Bill Reichert. Startup Financial KPIs: Calculation, Presentation & Interpretation Slide 1 EIA2016 - Bill Reichert. Startup Financial KPIs: Calculation, Presentation & Interpretation Slide 2 EIA2016 - Bill Reichert. Startup Financial KPIs: Calculation, Presentation & Interpretation Slide 3 EIA2016 - Bill Reichert. Startup Financial KPIs: Calculation, Presentation & Interpretation Slide 4 EIA2016 - Bill Reichert. Startup Financial KPIs: Calculation, Presentation & Interpretation Slide 5 EIA2016 - Bill Reichert. Startup Financial KPIs: Calculation, Presentation & Interpretation Slide 6 EIA2016 - Bill Reichert. Startup Financial KPIs: Calculation, Presentation & Interpretation Slide 7 EIA2016 - Bill Reichert. Startup Financial KPIs: Calculation, Presentation & Interpretation Slide 8 EIA2016 - Bill Reichert. Startup Financial KPIs: Calculation, Presentation & Interpretation Slide 9 EIA2016 - Bill Reichert. Startup Financial KPIs: Calculation, Presentation & Interpretation Slide 10 EIA2016 - Bill Reichert. Startup Financial KPIs: Calculation, Presentation & Interpretation Slide 11 EIA2016 - Bill Reichert. Startup Financial KPIs: Calculation, Presentation & Interpretation Slide 12 EIA2016 - Bill Reichert. Startup Financial KPIs: Calculation, Presentation & Interpretation Slide 13 EIA2016 - Bill Reichert. Startup Financial KPIs: Calculation, Presentation & Interpretation Slide 14 EIA2016 - Bill Reichert. Startup Financial KPIs: Calculation, Presentation & Interpretation Slide 15 EIA2016 - Bill Reichert. Startup Financial KPIs: Calculation, Presentation & Interpretation Slide 16 EIA2016 - Bill Reichert. Startup Financial KPIs: Calculation, Presentation & Interpretation Slide 17 EIA2016 - Bill Reichert. Startup Financial KPIs: Calculation, Presentation & Interpretation Slide 18 EIA2016 - Bill Reichert. Startup Financial KPIs: Calculation, Presentation & Interpretation Slide 19 EIA2016 - Bill Reichert. Startup Financial KPIs: Calculation, Presentation & Interpretation Slide 20 EIA2016 - Bill Reichert. Startup Financial KPIs: Calculation, Presentation & Interpretation Slide 21 EIA2016 - Bill Reichert. Startup Financial KPIs: Calculation, Presentation & Interpretation Slide 22 EIA2016 - Bill Reichert. Startup Financial KPIs: Calculation, Presentation & Interpretation Slide 23 EIA2016 - Bill Reichert. Startup Financial KPIs: Calculation, Presentation & Interpretation Slide 24 EIA2016 - Bill Reichert. Startup Financial KPIs: Calculation, Presentation & Interpretation Slide 25 EIA2016 - Bill Reichert. Startup Financial KPIs: Calculation, Presentation & Interpretation Slide 26 EIA2016 - Bill Reichert. Startup Financial KPIs: Calculation, Presentation & Interpretation Slide 27
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The Art of Startup Metrics

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EIA2016 - Bill Reichert. Startup Financial KPIs: Calculation, Presentation & Interpretation

  1. 1. The Art of Startup Metrics How to define and manage your success metrics European Innovation Academy July 2016 Bill Reichert @billreichert Managing Director Garage Technology Ventures Capital for Innovation
  2. 2. The Art of Startup Finance
  3. 3. Financial management for startups is not … • Business School finance • Fundraising drill • Marketing metrics The Art of Startup Metrics
  4. 4. Startup Finance is … • Turning your vision into a business – Converting your objectives into quantifiable metrics • Validating and scaling your business The Art of Startup Metrics
  5. 5. Business Model Formula Framework: • We sell [product or service] to [target customers]. • The reason our customers buy our product is [compelling value proposition/benefits]. • We have an advantage over our competition because [sustainable competitive advantage]. • We will become profitable in the [Nth] quarter of [201X] • By selling [XXX] systems/licenses/subscriptions to [YYY] customers • Through a combination of [channels/partners/direct sales] • At $ [price] per system/customer/unit/subscription • With a cost of $ [cost/margin] per customer acquired/product sold. • At that point, our revenue run rate will be $ [revenues] on an annualized basis. Your Business Model Formula
  6. 6. Confidential6 Your Management Dashboard: Key Metrics for your startup company The top seven metrics you need to measure, monitor, and manage The Art of Startup Metrics
  7. 7. What is the Number 1 reason startup companies fail? . . . they run out of cash The Art of Startup Metrics
  8. 8. 1. Cash - What is your Burn Rate? - What is your Net Cash position? - How much Runway do you have? The Art of Startup Metrics
  9. 9. 2. Product - Are you on time, on budget? - How do users rate your features? - Net Promoter Score The Art of Startup Metrics
  10. 10. The Art of Startup Metrics Net Promoter Score:
  11. 11. 3. Marketing - Qualified Leads? - Validation of Core Value Proposition - Validation of Marketing Channels - “Viral” coefficient - Cost per qualified lead? The Art of Startup Metrics
  12. 12. 4. Sales - Sales force/rep Productivity? - Sales Cycle (offline)? - Conversion rate (online)? The Art of Startup Metrics
  13. 13. 5. Customers - Growth rate of customer base? - Customer Acquisition Cost (CAC)? - Customer Lifetime Value (CLV/CAC)? - Profitability (CLV/CAC)? The Art of Startup Metrics
  14. 14. 6. Support - Customer satisfaction/engagement? - Customer churn? The Art of Startup Metrics
  15. 15. 7. Team - Alignment and morale? - Performance and skills? - Recruiting and retention rates? The Art of Startup Metrics
  16. 16. CustomersCash Team Product Marketing Sales Support Startup Management Dashboard The Art of Startup Metrics
  17. 17. Confidential17 The Art of Startup Metrics
  18. 18. Confidential18 The Art of Startup Metrics
  19. 19. Confidential19 The Art of Startup Metrics
  20. 20. Confidential20 The Art of Startup Metrics Objectives, Deliverables, Metrics
  21. 21. Other Metrics: • Price: How do you test price/value assumptions? • Costs: Do you have alternative cost models? • Competition: Can you measure market share? • Channels: Profitability of alternate channels? • Revenue streams: Assumptions vs. reality? • Operations: Manufacturing, distribution, etc.? • Others? … The Art of Startup Metrics
  22. 22. Building and Using your Management Dashboard: • Simple: The best is the enemy of the good • Open: Templates and investment create tunnel vision • Meaningful: Monitor metrics that really matter • Flexible: Drop metrics that outlive their usefulness • Accountable: Each metric must have an owner. The Art of Startup Metrics
  23. 23. Final Note: Monthly Management Reports • Standardize early: Produce monthly financials, dashboard summary, and key action items • Board package: Company driven, not investor driven; but solicit investor input • Tools vs. Grades: Focus on learning and responding, not grading and punishing. The Art of Startup Metrics
  24. 24. The Art of Startup Finance Online course at Kauffman Founders School Resources for Entrepreneurs http://www.entrepreneurship.org/Founders-School/The-Art-of-Startup-Finance.aspx
  25. 25. Art of the Start Online course at Skillshare.com Resources for Entrepreneurs
  26. 26. For questions, comments, or slides reichert@garage.com @billreichert R E S O U R C E S F O R E N T R E P R E N E U R S . Garage website: http://www.garage.com w w w . g a r a g e . c o m https://encrypted-tbn0.gstatic.com/images?q=tbn:ANd9GcRZ7w8fVmbt6es1ZxqeOI57Edm4- raGru60faW6mw52Inz9FfT1og https://encrypted-tbn0.gstatic.com/images?q=tbn:ANd9GcRZ7w8fVmbt6es1ZxqeOI57Edm4- raGru60faW6mw52Inz9FfT1og The Art of Startup Metrics
  27. 27. The Art of Startup Metrics Bill Reichert Managing Director Garage Technology Ventures Capital for Innovation
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The Art of Startup Metrics

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