What are the key metrics that the management team should focus on?

Oliver Hutaff / November, 2017

Description

Oliver Hutaff, CFO/COO at Electric Imp explains some key indicators that are driving your business forward as the metrics to focus on.

Video Transcript

What are the key metrics that the management team should focus on?

I think key metrics for a management team in any company but particularly for a startup really all have to be around what is it that is driving your business forward, so what are the metrics that are driving your business forward. If you’re looking at new customer acquisition, how many customers are in your pipeline, how many new customers are in your pipeline, how many customers have you moved from one stage to the next in the pipeline.

Those are all much better leading indicators than how much revenue have we generated. You can generate revenue but don’t have anything else in the pipeline and you hit the wall. I think it’s all about metrics that are detailing out the activity that the company is trying to engage in to drive the business forward. So it can be product-based, are we on our roadmap, are we hitting with the right features in the right schedule releases, to have a product in the marketing that’s consistent with what we told our customers so we’re going to be able to go and secure that business.

It could be about customer activity, it can be about product marketing or marketing in terms of are we getting the right message out there, do we have enough market presence and market awareness so that people know who we are when we go to try and engage with customers. So all of those things lend themselves to some goal of some future revenue, some future customer engagement, waiting until you’ve actually hit those to start tracking them is kind of meaningless you’re looking in the rearview mirror.

I think if you start to define what are the three to ten things that if we execute, we know we’ve moved the business forward in advance of customers or revenue whatever it may be, tracking leading indicators for startups I think is the critical way to go. Looking at an income statement, you’re managing in the rearview mirror at that point, which is not a good way to do it.

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