Startup Metrics
Matt DyorPayboard Co-Founder and CEO
PayboardConversion Automation
Startup Moneyball
Matt DyorPayboard Co-Founder and CEO
PayboardConversion Automation
Startup Metrics Background
Make Websites Intelligent
Core Metrics
• Market Metrics– Size of Market
– Growth of Market
– Competition
• Startup Metrics– Validation
– Leading
– Operational
What is a metric?
An objective measurement of the present health and future potential of a business.
What is your goal?
What kind of business are you building?
Consulting, Bootstrap, VC-backed?
Market Metrics
• Market Metrics– Size of Market: more than a billion, less than a trillion
– Growth of Market: growth is provable or believed to be true
– Competitive Landscape: who currently owns this market
• Market (alone) rarely interests investors: – huge market + easy-to-build opportunity = incumbents will win
– small market + easy-to-build opportunity = lifestyle business
– huge market + a hard-to-build solution = why you?• Odds are, none of us can defend why our team is uniquely positioned to
dominate a market, so we have to rely on startups metrics.
Startup Metrics
• Validation Metrics – is there a pain worth solving?
• Leading Metrics – is the startup making progress towards a commercially meaningful solution?
• Operational Metrics – what is the present health and future potential of the startup?
Let’s go in reverse order
Startup Metrics - Operational
• Customer Acquisition Cost: – incremental cost to acquire a customer. If you say nothing, you are not credible. Go invest some
money on Google Ad Words.
• Lifetime Value:– Monthly revenue x average lifetime (in months)
• Average lifetime is 1/monthly churn rate.
• The longer, the harder to defend. 3% monthly churn / 3 years is ballpark.
• Months to Recover CAC: – Should be less than 12 (eg-if you charge $100/month, CAC should be less than $1200)
• Lifetime Value / CAC: – 3 or higher for SaaS
• Operating Costs: – Mostly people – how many of them and what rate. $7k-$10k/developer/month.
– Funds raised need to cover anticipated costs for 12-18 months.
• Initially, you will have very sparse data on any of these metrics.– Either get to positive operational metrics, or come up with credible leading metrics.
– Leading metrics require a larger market (higher risk/less proof).
Startup Metrics - Leading• What do you do before you have meaningful operational metrics?
– Make something up.
• Needs to be close to operational metrics, and give investors confidence that there is a positive relationship– Awesome for Payboard: number of influenced purchases increasing per month.
– OK for Payboard: number of people streaming data to Payboard.
– Weak for Payboard: number of page views and signups.
• Needs to be up and to the right – every business needs traction. – You need to be able to influence these metrics.
– Gives you clarity on what to prioritize.
– Can be down and to the right:)
Startup Metrics - Validation
• Measurements of customer discovery (conversations) that support operational metrics.
• Talk to 100 potential customers before you build.
• Validate that they *say* that: 1) they have a problem; and 2) they would be willing to pay you to fix it. – Do not get them to buy off on your solution.
– Do get an understanding of how they purchase other tools/services.
– Your goal is to find the customer segment that is most hungry for a solution.
• Nobody cares about your validation metrics-they are for your team.
TeamWe are all making it up
Questions?Skype matt.dyor!
…so make up something awesome!
Data = Payboard’s Raw Material
# of user clicks / month is growing.
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