Before starting something new its best practice to ask – what does success look like a week, 30 days, 90 days, a year, and 3 years from now and how to measure that success. This helps to focus efforts and formulate plans that are tied to the goals of the venture. Avoid getting too detailed because plans inevitably change. Remember to work S.M.A.R.T., but also find ways to capture qualitative or subjective elements. Here’s how we’ve measured the success of our new project, MetaTalk.
Statement of Purpose: We believe supporting mental health in the workplace will enable people to think more clearly to address the challenges created by COVID19 and advance their work, which aids local and national recovery.
Week One Goals: By raising awareness of the project and finalizing processes (content delivery, website functionality, etc.) we’ll be in a stronger position next week to further identify the needs of our audience and provide more meaningful content/services.
KPI Snapshot: Website visits are up 1,088% this month, with unique visitors up 463% and average session duration increasing to 8 minutes 12 seconds. We received our very first online subscriber last night (exciting) and had 3 posts with over 1k views. Likes, comments, and direct messages are all up and momentum has been consistent throughout the week. We received positive feedback from our audience- validating efforts. Overall, impression rates are well over what was expected, but the conversion rate to followers is lower than expected on Instagram. Little attention has been given to the Facebook and Pinterest audience.
Improvements Ahead: Refining posts for the differences between the audiences of each platform and increasing engagement on Facebook and Pinterest. Conversion rates are important, but we need maturation time for people to find value. Planning and scheduling tasks more efficiently while allowing time for pop-up concerns. Further development on core offerings: micro-lessons and podcast.
These aren't the only ways to measure success. Take a look at this glossary of KPIs.
Key Performance Indicator Glossary
Activation Rate = Number of users taking a specific action to get value out of a product
ACV (Annual Contract Value) = The value that a contract will bring to your business annually
ARPA (Annual Revenue per Account) = MRR / Total # of Customers
ARR (Annual Recurring Revenue) = The amount of revenue you receive that recurs yearly
ARR (Annual Run Rate) = Projection of current MRR into the future, annualized
Billings = Current quarterly revenue + deferred revenue from the previous quarter
CAC (Customer Acquisition Cost) = How much it costs, on average, to acquire a customer
CCR (Customer Concentration Risk) = Revenue from largest customer / total revenue
CMGR (Compounded Monthly Growth Rate) = (Latest Month/First Month) ^ (1 / # of Months) – 1
CRR (Customer Retention Rates) = indicates the percentage of paying customers who remain paying customers during a given period of time
DAU (Daily Active Users) = The number of users that return to your startup’s site or app on a daily basis
Deferred Revenue = Amount that was received by a company in advance of earning it
Direct Traffic = Traffic coming directly to your site via a link or entering the URL
GCR (Gross Churn Rate) = MRR lost in a given month / MRR at the beginning of the month
Gross Burn = Monthly expenses + any other cash outlays
Gross Margin (profit margin) = Difference between revenue and cost of goods sold
Gross Profit = Total revenue minus the cost of goods sold
LTV (Lifetime Value) = Prediction of the net profit from the entire future relationship with a customer
MAU (Monthly Active Users) = The number of users that return to your startup’s site or app on a monthly basis
MCR (Monthly Churn Rate) = Lost customers this month / prior month total
MoM (Month-on-Month Growth) = The rate of growth from month to month, comparing the current month or past 30 days to the previous month or last 31 to 60 days.
Monthly Cash Burn Rate = How much money you spend per month (gross)
MRR (Monthly Recurring Revenue) = The amount of revenue you make that recurs monthly
Net Burn Rate = Revenues – gross burn
Net Churn = (MRR lost – MRR from upsells) this month / MRR at the beginning of the month
Network Effects = Effect of one user on the value of that product to other people (example: Metcalfe’s Law)
NPS (Net Promoter Score) = How likely user is to recommend your product to a friend
Number of Logins = The amount of times users have logged in to your portal
Organic Traffic = Unpaid traffic from search results
Platform Risk = Dependence on a specific platform or channel
Retention by Cohort = % of original installed base (1st month) that are still transacting
Runway = the measure of the amount of time until the company runs out of cash, expressed in terms of months computed by dividing remaining cash by monthly burn.
Sell-Through Rate = Number of units sold in a period/number of items at the beginning of the period
TAM (Total Addressable Market) = Revenue opportunity available for a product
TCV (Total Contract Value) = Value of one-time and recurring charges
Virality = Viral coefficient = average number of invitations sent to existing users * conversion rate of invitation