Know Your Metrics
Use Metrics to show your progress Today, we\u2019ll talk about knowing your metrics Investors look for the metrics in your business so it\u2019s important to know them. There are three levels of metrics you can use: Activity metrics show the basic activity of the business Unit economic metrics show the unit economic model including cost of customer acquisition and revenue. Growth metrics show the growth in the user base and usage of the product. Activity metrics show number of users, downloads, registrations and the like. They fall short of business results such as closed sales. If nothing else focus on the customer engagement numbers you have. If your company is pre-revenue you can show how the business model is \u201cprofitable\u201d by using\xa0 unit economic numbers.\xa0At its core, you show the cost and process to generate leads, qualify, and close them for revenue. In the early days of a business the revenue is small.\xa0 Most investors know that and don\u2019t expect large revenue.\xa0 What they look for is repeatable and predictable revenue. Showing unit economics demonstrates you have a core business model that is working and with time and funding can improve. Growth metrics show the number of users increasing and their usage of the product increasing. Daily active or monthly active users should be going up and to the right. If the business has seasons or cycles, then one can use a six month moving average to show your growth rate. In summary, if you can only show activity metrics then do so.\xa0 If you can show unit economic metrics, that will help. The best metrics show\xa0 growing users and usage. Whatever you do, don\u2019t show up empty-handed. Thank you for joining us for the Startup Espresso where we help startups and investors connect for funding. Let\u2019s go startup something today!