34 Startup Metrics That Tech Entrepreneurs Need to Know
Several years ago, a key challenge with launching a new tech startup venture was that there weren’t many precedents to follow.
- How do you scale a company?
- How do you measure growth and costs in a more meaningful way?
- Does the company have real traction?
Of course, there were knowledgeable people in the tech ecosystem that knew these things – for example, venture capitalists and ex-founders that had been successful with previous ventures – but they were tough to gain access to, and many of their theories and best practices weren’t yet widespread.
Fast forward to today, and the practices around new startups are much more established. While this can be a blessing and a curse to new founders, at least a more standardized set of metrics helps to give founders a sense of where their company stands.
Key Startup Metrics, According to VCs
The infographic from Funders and Founders lists 34 startup metrics for founders to know – but which one should be a focus for new ventures?
Here’s what three bigtime VCs have said about the startup metrics that they consider to be most important at early stages:
“Month-over-Month Organic Growth”
For most companies, MoM organic growth is a very useful metric and depending on the base, 20–50% MoM growth can be good. Retention, referral, and churn are all things we look at, too.
– Aileen Lee, Cowboy Ventures
According to Aileen Lee, who originally came up with the “unicorn” term, organic growth is a particularly useful metric.
On the other hand, Bill Gurley of Benchmark says that monitoring conversions is a comprehensive metric that is a good proxy for several key business areas.
No other metric so holistically captures as many critical aspects of a web site – user design, usability, performance, convenience, ad effectiveness, net promoter score, customer satisfaction – all in a single measurement.
– Bill Gurley, Benchmark
Paul Graham, of Y Combinator fame, says that the metric depends on the stage. If you have revenue, then revenue growth is the metric you want. If you’re not there yet, user growth is a good proxy.
“Revenue Growth or Active Users”
The best thing to measure the growth rate of is revenue. The next best, for startups that aren’t charging initially, is active users. That’s a reasonable proxy for revenue growth because whenever the startup does start trying to make money, their revenues will probably be a constant multiple of active users.
– Paul Graham, VC and co-founder of Y Combinator
It should also be noted that the most relevant metric to you depends on your business model. For example, MRR (Monthly recurring revenue) and churn rates would be particularly important to SaaS (Software-as-a-service) startups, while MAUs (Monthly active users) and organic traffic may be more important measurements for online media companies.
10 Proven Ways to Build Trust With Employees
Trust is the glue of modern organizations to ensure collaboration and healthy conflict. Here are proven ways to build trust with employees.
Making progress towards ambitious and complex organizational objectives can be a tricky endeavor for even the most accomplished of teams.
But if there was ever a surefire recipe to make this undertaking more difficult, it’d be embarking on these kinds of goals with a team that doesn’t actually trust each other.
Not only does trust enable individuals to work outside of their silos and collaborate with other people on the team, but trust is also associated with improved communication, job satisfaction, and higher performance levels within organizations.
The Trust Imperative
Today’s infographic comes to us from The Business Backer, and it highlights 10 proven ways to build trust with employees in teams and organizations.
Many of the complex challenges that dot the modern business landscape cannot be solved by a myriad of solo efforts.
Teams are necessary, and working together cannot take place only at a superficial level. To tackle the big problems, teams must have deep-rooted commitments to each other, creating potential for collaboration, healthy conflict, and differences of opinion.
Managers need to trust employees and vice versa, but different types of teams need to trust each other across other business functions as well.
10 Ways to Build Trust
It’s not possible to build trust with employees overnight, but there are some easy ways to kickstart the process.
- Show them the big picture
Ensuring employees have a view of the big picture creates a space for communication and openness.
- Set clear expectations
A lack of clarity of what to expect can lead to confusion, which erodes trust.
- Listen actively
Asking open-ended questions like “How’s the project going?” builds trust and respect.
- Delegate low-risk projects
A cycle of trust can be created, moving up to bigger and more important projects.
- Schedule weekly catch-up meetings
Regular meetings create a trusting environment for people to give and receive feedback.
- Be honest
Even when it is uncomfortable, being honest helps build trust and creates healthy conflict.
- Commit to your word
Trust depends on integrity, and seemingly erratic behavior undermines this.
- Recognize excellent work
This has the biggest effect on trust right after a goal has been met.
- Share a bit about yourself
Oxytocin is released in the brain when we socialize and build trust.
- Let employees work on projects they enjoy
This allows employees to focus on what they care about most, fostering trust.
Consequences of Inaction
It doesn’t matter how smart or experienced your team is.
Without the element of trust, they will not be able to work together in an effective fashion. For this reason, undertaking a mission to enable and build trust with employees is crucial for the success of any modern organization.
Tech Founders Predict the Next Wave of Startup Growth
Which U.S. startups are best poised for growth and spin-off success? This chart shares insights from over 500 tech founders about the state of startups.
Tech Founders Predict the Next Wave of Startup Growth
Today’s tech founders have unique insights into the evolving arena of innovation and are keenly aware of why some companies succeed more than others. Many have worked with multiple startups and have gone on to invest in successful tech unicorns.
This week’s chart comes from First Round’s State of Startups 2018 survey, in which 529 founders shared their predictions on the tech startups best poised for growth and spin-off success.
Tech Startup Valuations
Stripe, the payments startup darling, has already grown from $1.8 billion in valuation in 2013 to over $22 billion today. According to the tech founders surveyed, 19% see Stripe continuing on this path in the years to come.
Q: Which U.S.-based tech startup’s value will increase the most in the next 10 years?
|Rank||Startup||% of respondents|
It’s worth noting that this list includes some startups that have already IPO’d since the survey was released in December 2018.
In fact, in the first half of 2019, we’ve already seen Pinterest, Lyft, Uber, and Slack hit the market. Slack’s public offering was the most notable, as they chose to go the direct listing route. The share price still jumped 48.5% less than 24 hours after they went public.
The Next PayPal Mafia?
The PayPal Mafia is a legendary group of billionaire investor-entrepreneurs that have had far-reaching influence in the tech world since they parted ways with PayPal.
Not only did members of this group go on to start many major unicorns, including YouTube, SpaceX, LinkedIn, and Palantir, but some members have invested in over 100 startups each. This “giving back” has had a monumental impact on the Silicon Valley ecosystem, planting the seeds that would emerge as many of today’s star companies.
Q: Which U.S.-based company is most likely to spin out the next generation of notable founders over the next five years?
|Rank||Startup||% of respondents|
Current tech founders predict that the companies listed in this survey will be perfect launching points for many of the world’s future tech founders.
Of all U.S.-based tech startups, Uber is predicted to be a top contender for producing the next generation of startup talent by 2023.
Other Survey Findings
Interestingly, over 60% of founders believe that the world is in a technology bubble, with evenly split reviews on whether it’s either nowhere close or very close to popping.
While 57% of founders believe the U.S. will continue to dominate the tech world, 39% predict China’s growth will become the world’s hub for tech innovation by 2028.
Only time will tell, as tensions between the U.S. and China continue to heat up, and the global recruitment of tech talent becomes increasingly competitive.
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