How can you become an attractive company for investors and business partners by choosing the right metrics?

1. Metrics That Matter
Sujayath Ali
Founder – Voonik.com

2. About me
Sujayath Ali
Founder @ Voonik.com
Product Manager @ Amazon for 7 Years.
VP, Product Management @ Visa.
MBA from ISB, Hyderabad.

3. Disclaimer
• This presentation is intended for startup
founders seeking VC investment.
• This presentation is not based on researching
multiple companies or surveying multiple
founders; this is based on what personally
worked for me at Voonik and Amazon.
– So take it with a pinch of salt.

4. In 1987, Aluminum Company of America (Alcoa), was at historic low. A
new CEO was appointed and the CEO said something in the first investor
meeting. All the analysts panicked, started calling their clients and asked
them to immediately sell the company.
What did the new CEO
Say?

5. METRICS, WHY SHOULD I CARE?

6. Which company would you invest in?
“We are building innovative, reliable products and services; we are taking
the world in imaginative new directions.”
Or
“We created a new category of devices and have already sold more than
200 Million devices. Every quarter has been better than the previous
quarter, since the launch.”

7. Metrics, why should I care?
• As a founder, you are a story-teller. You are
constantly selling your story to investors,
partners, employees, press, and who not.
• Metrics is nothing but a story, told in
numbers. This story is much more interesting
and credible to investors and business
stakeholders.

8. Metrics, why should I care?
• Understand the story that metrics are telling
you – every day, every week, every month.
– This is the best way to keep a close tab on your
business.
• Practice how you will convey that story to
outside world - every day, every week, every
month.
• Pick the interesting stories.
• Plant seeds for better stories.

9. Btw, those quotes are from …
“We are building innovative, reliable products and services; we are taking
the world in imaginative new directions.”
“We created a new category of devices and have already sold more than
200 Million devices. Every quarter has been better than the previous
quarter, since the launch.”

10. METRICS THAT MATTER

11. What did that CEO say?
“Workplace safety is the only metric that I will
focus on. I intend to go for zero injuries. The
company updates will only talk about this metric
and not about financial numbers or capital
ratios”

12. The Keystone Metric
One metric that the entire organization rallies
around.

13. Which Metric will you focus on?
Lets say, metrics A, B and C are on par with
industry. D and E are below par. F is above par.

14. What is your keystone metric?
• What’s the use in putting all the hard work,
just to become on par with industry?
• The keystone metric should make you stand
out from the crowd.
• Keystone metric might not be in the metrics
that you are currently tracking. Look deeper.
Look everywhere.

15. Keystone Metrics change over time
• Voonik had different keystone metrics across
stages: MVP stage, Building Block stage, and
Scaling Stage.
• Keystone Metric could also change in the
same stage, based on new information and
changing priorities.

16. Keystone Metric should Grow
“Pick a growth rate and then just try to hit it
every week. The key word here is "just." If you
hit that number, you're successful for that week.
But if you don't hit it, you've failed in the only
thing that mattered.”
Startup = Growth
- Paul Graham

17. And what happened to Alcoa?
• Within a year of the CEO’s speech, Alcoa’s
profits hit a record high.
• In the tenure of the CEO, the market cap went
up by $27 Billion.
• Anyone who invested on the day of the
speech would have got 6X returns.

18. WHAT SHOULD I TRACK?

19. Metrics to Track
• In addition to keystone metric, you should be
tracking a lot more metrics.
• A sub-par metric is not bad, as long as you
planned it that way.
• A phenomenal metric is not good, if you don’t
understand why is it that way.

20. Metrics to Track
• You might not know all the metrics you would
need in future. So better enable tracking for
all possible metrics you could think of.
• Send events for every action.
• If possible, try creating a single repository.
– At voonik, we dumped all the data from Google
Analytics (GA) and FreshDesk into our database so
that we can combine them with Voonik data to
create meaningful reports that are not possible in
GA.

21. Metrics to track
• Sometimes, you need to invent a metric.
– At Voonik, we have a custom metric to measure
the effectiveness of our algorithms.
– At Amazon, we had a number of invented metrics.
• Don’t miss human metrics.
– Example: Productivity metrics, Effort Burn rate
• Don’t miss metrics outside your product.
– Metrics for the platforms and services you use

22. DELEGATION OF METRICS

23. Metric Owners
• Before creating a project roadmap, create a
metrics roadmap.
• Assign a owner for every important metric. Have
them report the story every day.
• Assign projects / tasks to the person whose
metrics will be affected by the project.
• Make sure every metric owner understands their
part of story and the goals.
• Don’t go by benchmarks. Go by what is needed
for your business model.

24. Input Metric / Output Metric
• Metrics that are under your circle of influence are
input metrics.
– Example: Number of products added, Number of steps in
checkout, design of the website
• Metrics that are outside your circle of influence are
output metrics. They are influenced by input metrics.
– Number of orders, Sales Volume, Contracts.
• Assign only Input metrics to subordinates.
– They will be frustrated if their efforts don’t impact the
output metrics.
– By assigning input metrics, you avoid hearing excuses for
not meeting goals.

25. PITFALLS TO AVOID …

26. Pick the story that suits your stage
• You might have best-in-class conversion rate, multiple-x
growth rate but …
– It is meaningless, without scale.
– You can grow from 1 to 2 orders and claim 100% growth
rate.
• Pick stories / metrics that makes sense for your stage
– Percentage of positive reviews or repeat usage is better
story than growth rate for a startup without scale.
• Pick stories / metrics that will lead you to next stage
– Example: I will be ready to scale when I am handling X
orders with Y repeat rate.

27. Don’t get into Micro Optimizations …
• At the early stage, you should be looking at
macro changes and not micro optimizations
such as button color and font type.
– Don’t avoid them altogether either. Use your
judgment
• Don’t care about industry benchmarks.
Different companies measure the same metric
differently
– Example: How do you measure conversion rate?

28. Don’t go Top-down
• Always build your projections bottoms up.
• Your valuation depends on your projection.
Bottoms-up gives credibility to your
projections.
• Keep the projections ambitious but
achievable.
• Don’t believe the analyst reports.

29. Do Everything
• Investors and stakeholders are not going to be happy
when you just focus on 1 or two stories in a month.
They want you to do everything, like a big company.
How do you do it?
– At Voonik, we had a building block stage between MVP
stage and Scaling stage.
– We got an agreement with investors that in the building
block stage, every month we will focus on one new story
and also maintain the stories from previous months.
– So by the time scaling stage started, we had all the stories
in good place. We scaled the inputs and outputs
maintaining all the stories, in other words, doing
everything.

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Write to me: sujayath@voonik.com
Twitter: @sujayath