Revenue is not the end-all of metrics. This might sound foolish. When it comes to knowing if a business is succeeding or failing, most people assume revenue is the metric watch. And a most of the time, the bottom line is a good indicator of traction, conversion and growth. But when you're just starting out, there can be a variety of other metrics that can make you attune to whether your venture is budding or floundering.
Conversion metrics or key performance indicators (KPIs) can be just as important as revenue at the start of a business, especially a startup.
Take Facebook for instance. In Sam Altman’s podcast ‘How to Start a Startup: Lecture 6 – Growth’ (18:05), guest Alex Schultz, VP of Growth at Facebook, describes why Facebook paid so much attention in the beginning to retention, and more importantly—users’ number of friends.
“The magic moment is seeing a picture of your friend. If we could get a user 10 friends in 14 days, they were hooked,” Schultz said.
Focusing on the magic moment or ultimate measure of retention for your company can ultimately help you to support and increase that other, still vital, metric, your revenue.
Below, three entrepreneurs discuss how they think about their KPIs and which metrics are constantly top of mind.
Focus on Usage Beyond Downloads
Classify Different Levels of User Engagement
Decipher Problems Quicker
To learn how best to construct a tool for monitoring your top metrics, check out Bill Reichert's video on "Financial Monitoring: Your Performance Metrics".