Om succesvol te zijn met jouw startup is het van groot belang dat je als entrepreneur begrijpt welke key performance indicators (KPIs) voor jouw startup van belang en relevant zijn. Een juiste set KPIs geeft management en mogelijke investeerders een goed beeld van daadwerkelijke situatie. Een belangrijk aspect aan het gebruik van KPIs is dat het niet gaat om het verzamelen van de gegevens en deze vertalen in specifieke resultaten. Een KPI krijgt pas waarde wanneer de KPIs worden gebruikt voor het bijsturen van de goals, targets en strategie. Wanneer je inzicht krijgt hoe je KPIs kunt sturen krijg je toegang tot inzichten waarmee je jouw startup naar de volgende fase kunt tillen.
1. Customer Acquisition Cost (“CAC”). CAC is the amount of money you need to spend on sales, marketing and related expenses, on average, to acquire a new customer. This tells us about the efficiency of your marketing efforts, although it’s much more meaningful when combined with some of the other metrics below and when compared to competitors’ CAC.
2. Acquiring new customers is one thing, but retaining them is even more important. Your Customer Retention Rate indicates the percentage of paying customers who remain paying customers during a given period of time. The converse to retention rate is Churn (or Attrition), the percentage of customers you lose in a given period of time. When we see high retention rates over an indicative time period, we know the company has a sticky product and that it is keeping its customers happy. This is also an indicator of capital efficiency.
3. Lifetime Value (“LTV”) is the measurement of the net value of an average customer to your business over the estimated life of the relationship with your company. Understanding this number, especially in its relation to CAC, is critical to building a sustainable company.
4. We consider the Ratio of CAC to LTV to be the golden metric. This is a true indicator of the sustainability of a company. If a company can predictably and repeatedly turn x into 10x (note: 10x is just an illustration and not mean to imply any sort of minimum or standard), then it’s sustainable.
5. CAC Recovery Time (or Months to Recover CAC). This KPI measures how long it takes for a customer to generate enough net revenue to cover the CAC. CAC Recovery Time has a direct impact on cash flow and consequentially, Runway.
6. Whereas CAC measures the variable expenses attributable to acquiring customers, Overheadmeasures the company’s fixed expenses incurred irrespective of the number of customers acquired. Overhead relative to revenue is a reflection of the capital efficiency of a company (i.e. all things being equal, a company that generates $1M in revenue on $200k in Overhead is twice as efficient than one that generates $1M in revenue on $400k in revenue).
7. Understanding your revenue and monthly expenses (fixed and variable) enables you to calculate the company’s Monthly Burn. This is simply the net amount of cash flow for a month when net cash flow is negative. If the company starts the month with $100k in cash and ends the month with $90k in cash, its burn rate is $10k. If a company’s monthly net cash flow is positive, it is not burning cash.
8. A keen focus on Runway is critical to the survival of any startup. Runway is the measure of the amount of time until the company runs out of cash, expressed in terms of months. Runway is computed by dividing remaining cash by Monthly Burn. We prefer to view a conservative estimate of Runway that calculates the Monthly Burn utilizing current revenue and projected expenses (after accounting for the increased expenses to be incurred post-investment). We require an absolute minimum of 12 months of Runway, but have a strong preference for 18 months or more. Short Runways cause entrepreneurs to by myopic and not to have the liberty to tweak and iterate when necessary. It also forces them to almost immediately focus on the next fundraising round instead of on growing the company.
9. Expressed as a percentage, Profit Margin tells us how much your product sells for above the actual cost of the product itself. Put another way, it reveals how much of the selling price is “markup.” This invaluable metric allows us to consider the return on investment on the cost of the product and is significant in understanding the scalability and sustainability of the company.
10. We consider Conversion Rate to be a very telling KPI in that it reveals a combination of the company’s ability to sell its products to its customers and the customers’ desire for the product. It is particularly instructive to track and review Conversion Rate over time and regularly run experiments to improve it.
11. Certain businesses find that revenue may not be the most informative indicator of their financial performance. This is especially true for marketplaces for which revenue (i.e. their take rate) represents a small portion of overall transactions. Gross Merchandise Volume (“GMV”) can be a useful KPI in these cases. GMV is the overall dollar value of sales of goods or services purchased through a marketplace.
12. For companies that have apps, online games, or social networking sites, Monthly Active Users (“MAU”) is an important KPI. MAU is the number of unique users who engage with the site or app in a thirty day period. Understanding MAU is helpful in determining the revenue potential of a company or how well it is currently monetizing.