James Sinclair explains why startups measure success wrong. Founders track funding and hires, but customers only care if you move their metrics: ROI, revenue, daily active users. Without proof you're moving what matters to them, you're just a nice-to-have.
Chapters
As a startup, how do you measure kind of success and how do you measure value? And they are obviously highly linked, but deeply different at the beginning. A lot of startups kind of measure success the only way they can. They don't have enough customers, don't have enough stuff going on. So you're measuring it based on kind of milestones. Am I raising money? Am I able to make the hire? Is the product looking good? Am I able to get my first few customers? What are those customers look like? Are they paying? You know, you might even be moving into the concept of ARR, but you're not really big enough to be talking about revenue retention or negative churn. You haven't quite got there yet. But as a company you have your sentence, which is our solution delivers X by doing Y. Very simple. And you should be able to talk about your company in that simple sentence. So how are you measuring whether it actually does it? And a lot of startups actually don't spend time thinking about what is the metric of success for the customer? How are they measuring value? How are they measuring whether your solution is meeting those needs? How is, how are they measuring roi? You hear all these styles, these bold statements, you know, using our solution, you know, companies save on average $1.2 million a year. Can you prove that? Can you measure that? Can you show that? Can you deliver that? Because if you can't show that you are able to move the needle on a metric that has some value associated, your product will ch. Because ultimately it's a nice to have, not a must have. So it's really important that you think about what is the value, what are the values or what are the metrics where we're measuring customer success. And for some it may be as simple as daus, you know, the daily active users, monthly active users, usability, how often people are logging in. But usually there's actually a secondary kind of metric which should be your primary. Great, they log in often. Okay, that shows they like your solution. Users solution great. But is it delivering them the benefits they're looking for? So what's your metric? If you were in the company buying your solution, what would you expect to see move? And how would you prove that? How would you validate it, how would you track it, how would you benchmark it? Good luck.
