Should I focus on ROI or growth in the early stage?

Rakesh Tondon / November, 2017


Rakesh Tondon, CEO and Founder of Le Tote explains how you should think about ROI vs. growth when building a startup in the early stages.

Video transcript:

Should I focus on ROI or growth in the early stage?

So I think you got to break down the ROI as understanding what that means and how that makes sense. So I would say, it’s very important for you to know the economics of your business. So, let’s say you’re running a commerce company: you can’t worry about ROI, or you can’t worry about unit economics. However, the experience that you offered to the customer is the most important thing. So you have to know the variables of your business, and how those affect the economics, and then try to work backward.

If I spend more on shipping right now and I provide the best possible experience, what else am I getting out of it? If I’m giving them a great experience, are they referring more customers, or overtime can I optimize my shipping cost to be a little bit lower, or something else. So, in the beginning, when you’re doing a startup, it’s very important to do the things that are not scalable, and not worry that much about dollars and cents, but fully conscious in knowing where the dollars and cents will come from, and where the savings in the future will come from. So, I look at it as early stages: know your variables, spend time perfecting the customer experience. The next phase needs to be about optimizing, looking at areas to streamline your cause and maximizing revenues.



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