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Early Stage Growth Metrics

X
Looking for help in identifying some reasonable growth metrics to track to my very early stage team. We don't yet have a paying customers but the interest seems robust and we're busy following up on a number of leads. I could definitely throttle up or down my leads generation effort, but am worried that if I throttle it up too much I'll end up unable to grow fast enough to service deals, or if I don't throttle up enough I'll end taking too long to find my first paying gigs. Given the space of enterprise software, what metrics have you found useful for this stage?

7 Replies

Joe Emison
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Joe Emison Advisor
Chief Information Officer at Xceligent
You want active users to tell you whether or not you have product-market fit.

So I would suggest setting up something like MixPanel tracking key user actions, and then look and see what users are doing and if they're finding things useful. You can also survey those users (Net Promoter Score is a good option).

Your metrics should be around users using your application and finding that it solves a problem for them.
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X
Entrepreneur
Thanks for the answer, Joe. Sadly, I can't do that: my product is in the enterprise software space and is not an application. None of the leads we're working on came from the website.
Joe Emison
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Joe Emison Advisor
Chief Information Officer at Xceligent
You need to watch real users using your application. Do whatever you can to do that. If you cannot watch real users using your application ASAP, you will likely fail.
Ivar Plahte
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Ivar Plahte Entrepreneur
CEO & Co-founder at OnRelay
I would sell as hard as you can from within your founding team until you have closed a few of your leads. And don't delegate your sales too much early on, as a founder you learn as much about your market from trying to close those deals as from everything else you do. Then ensure your initial customers are happy with, actually using and willing to pay for the service post pilots (which will normally take a few more product iterations than you think) before you blow up your sales.
Paul Krupin
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Paul Krupin Advisor
Search Word Pro & Direct Contact PR

Years ago I did a lot of work on performance metrics. The best metrics are those that you can use to define and track real management action. You should be able to think in advance whether a upward or downward change in a metric is something you want or don't want.

You can create metrics by defining a unit of management action that you have control over. You can define for example, money received per month by sales time in hours per month. If you double the sales time, what happens to the money received? Did it go the way you wanted?

I used my Search Word Pro to help get you a lot of up to date guidance on this question. Here's the link to the custom search tool that resulted from your question:


John Currie
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John Currie Advisor
ITERATE Ventures - Accelerating Science & Technology Ventures www.iterateventures.com
Igor,

Your early metrics for enterprise s/w are all about segmentation and value proposition validation (of potential segments). You should be setting up tests to see if your target segment resonates with your assumed pain point. Different segments usually resonate with different pain points.

Example metrics for an email campaign. Get 50 execs to opt-in (from your network, industry groups, a trade show) to get your email pitch. Send 25 one email and send 25 another email focusing on a different pain point. Or you could just do the 1st 25 and hold off on the 2nd to see 1st metrics. See how many CONVERT to qualified/interest in next step.

You're really validating your assumptions about a big problem, and your metrics need to reflect that. I believe a startups biggest challenge is to figure out what the sales cycle will look like and it has to start with a painful manual process with these tests. Hope this helps.
Jeff Burton
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Jeff Burton Advisor
Owner, Procentive
A full delivery cycle is going to supply the empirically justified metrics you really need. I would try to get through that as soon as you can. I'm basically agreeing with Ivar.
Richard Harris
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Richard Harris Entrepreneur • Advisor
Top 25 Inside Sales Leader, Public Speaker, 40 Most Inspiring Leader, Sales Trainer, Start-Up Advisor, SalesHacker
Igor, I have worked with a lot of early and expansion stage start-ups over the years and here is what I would suggest you need to do before trying to even track metrics or kpi's.

ICP - Ideal Customer Profile (This will be a hypothesis for now) but you want to know it. This includes both Decision Makers and Influencers. The average enterprise decision will most likly have 5 people involved in the decision and you may never truly speak to the person who "signs" the PO.

TAM - Total Addressable Market (Hopefully you already have this)

Cadence - X touches over Y days, Content based on ICP, etc.

Finally, if you are doing inbound vs outbound that will matter too.

Outbound - In the beginning you will want to track, sent, opened, positive reply, negative replies, 1st meetings set, 1st meetings attended, 2nd meeting set and their corresponding ratios.

Inbound - Received, 1st Meetings Set, 1st Meeting Attended, 2nd Meeting Set and corresponding ratios.

And as someone mentioned, yes, please focus on the following:
  1. Do NOT hand of sales yet, your customers are going to be buying you as much as anything else.

  2. Exhaust your VC, Friends, and Family Networks first. (Measure these as inbounds, not outbound)

  3. Since you do not have any paying customers yet, don't overthink it. Right now you just need to get logos (customers), in reality the metrics don't matter until you have some baseline of success to measure it against.
Feel free to contact me offline if you like, and no I will not try to sell you my services. I believe in putting karma out there for all of us.
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