The document discusses key metrics that startups should track to measure success. It recommends tracking 7 top metrics: 1) Cash/burn rate/runway, 2) Product progress and user feedback, 3) Marketing metrics like qualified leads and viral growth, 4) Sales metrics like productivity and conversion, 5) Customer metrics like growth, acquisition cost and lifetime value, 6) Support metrics like satisfaction, and 7) Team metrics like alignment and performance. Startups should create a management dashboard to regularly monitor these metrics, and use monthly reports to facilitate accountability and learning. Tracking the right meaningful metrics flexibly is important for validating and scaling the business model.

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. The Art of Startup Finance

3. Financial management for
startups is not …
• Business School finance
• Fundraising drill
• Marketing metrics
The Art of Startup Metrics

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. 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. 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. What is the Number 1 reason
startup companies fail?
. . . they run out of cash
The Art of Startup Metrics

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. 2. Product
- Are you on time, on budget?
- How do users rate your features?
- Net Promoter Score
The Art of Startup Metrics

10. The Art of Startup Metrics
Net Promoter Score:

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. 4. Sales
- Sales force/rep Productivity?
- Sales Cycle (offline)?
- Conversion rate (online)?
The Art of Startup Metrics

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. 6. Support
- Customer satisfaction/engagement?
- Customer churn?
The Art of Startup Metrics

15. 7. Team
- Alignment and morale?
- Performance and skills?
- Recruiting and retention rates?
The Art of Startup Metrics

16. CustomersCash Team
Product Marketing Sales Support
Startup Management Dashboard
The Art of Startup Metrics

17. Confidential17
The Art of Startup Metrics

18. Confidential18
The Art of Startup Metrics

19. Confidential19
The Art of Startup Metrics

20. Confidential20
The Art of Startup Metrics
Objectives, Deliverables, Metrics

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. 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. 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. 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. Art of the Start
Online course at
Skillshare.com
Resources for Entrepreneurs

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
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The Art of Startup Metrics

27. The Art of
Startup Metrics
Bill Reichert
Managing Director
Garage Technology Ventures
Capital for Innovation