KPIs you must know before pitching your startup

How intimately do you understand your KPIs?

Trust me it’s mission critical!

You need an almost obsessive focus on your key KPIs.

Why?

Because KPIs, if observed correctly, can give you a cold, analytical snapshot of the state of the company,

Untainted by emotion or rhetoric!

You should figure out what levers can be pulled and what tweaks can be made to improve the business, which will then be reflected in its KPIs.

Let’s review some of the important KPIs:

Customer acquisition cost (CAC) is the amount of money you need to spend on sales, marketing, and related expenses, on average, to acquire a new customer. This helps you identify ROI for every move of yours.

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. This gives you clarity on how much investment in acquisition makes sense.

Annual recurring revenue (ARR) can be used as a benchmark of revenue in the next 12 months (assuming no changes in the number of users or sales). This shows where the ship is going and how much you have achieved on a yearly timeline.

Burn rate expresses how quickly the startup is spending money. Burn rate is the actual amount of cash that has decreased in a period of time (generally one month). If the company is not burning sufficient cash, it might not be investing enough and may fall behind its competitors.

Every time I speak to founders I ask about these KPIs, along with a few others.

It is a quick way to understand the current state of their business.

The most successful founders tend to be those who are obsessed with their KPIs and have the drive to constantly experiment and optimize them.