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📈 Measure For Growth

📈 Measure For Growth

👉 The more ways you can measure, the more ways you can win. Equip yourself with most commonly used startup product metrics.

Egemen Eres
November 27, 2024 • Estimated Reading Time: 8 minutes

👋 Hi there - it’s Egemen. Thanks for reading Scalable.

Here are two very similar statements that have entirely different meanings depending on the underlying logic behind each:

We measure what we value.
What you measure is what you value.

Now, I’m not getting into word-plays or being philosophical.

My point is you shouldn’t start creating and measuring some KPIs simply because an investor asks, or you need to scrap some numbers together, or you “need to” implement an analytics tool for the sake of it.

If you start measuring and tracking some metrics & KPIs starting early on, it’ll actually be more beneficial for both your peace of mind and your startup’s success.

In this week’s edition, I’m sharing most commonly used product metrics so you can have a basis to start with.

Here’s a snapshot of what’s on the menu today:

☝️ Scaled This Past Week: xAI

💡 Spotlight: Long Angle

🧠 Deep-Dive: Measuring Value

🗺️ Method: Startup Metrics 101

⚾️ Catch: An Entirely New Way to Present iIeas

☝️ Scaled This Past Week: xAI

Massive AI news this week, multiple funding announcements were made public, but nothing comes close to this one.

Elon Musk’s xAI raised a whopping $5 Billion (yes, with a “b”) at a $50 Billion valuation - needless to say, wow - it’s the scale of the week!

Qatar Investment Authority, Valor Equity Partners, Andreessen Horowitz, and Sequoia Capital are among the leaders of this round.

xAI

xAI is an AI company with the mission of advancing scientific discovery and gaining a deeper understanding of our universe. Our first product is Grok - a conversational AI.

x.ai

Elon announced the fundraise earlier this year in May 2024.

With this recent investment, xAI is the second-most-valuable Gen-AI company in the world after OpenAI.

💡 Spotlight

Long Angle: A Vetted Community for High-Net-Worth Entrepreneurs and Executives

Private, vetted community offering confidential discussions and education
Entrepreneurs and executives, 30–55 years old, with $5M to $100M net worth
Preferential access to top-tier alternative investments

Join Long Angle Today

🧠 Deep-Dive: Measuring Value

I have a library of saved tweets, accumulated over years of consuming useful content - and Alex Hormozi’s tweets almost always stand out.

Here’s a gem from about one and a half years ago:

As silly as this sounds - almost no one does it:
If you’re trying to achieve something, the first step is having a way to measure progress.
And the more ways you measure, the more ways you can win.
So start there, then don’t stop winning.
— Alex Hormozi (@AlexHormozi)
7:49 PM • Mar 19, 2023

The more ways you measure, the more ways you can win - well, here’s why it’s practically powerful:

If you wanna to lose weight, the first step is to have them measure their weight. Just tracking your weight can help you lose weight.

The same principle applies to any area of improvement—want to boost revenue? Track it consistently.
Ask your product team to report metrics like DAUs, conversion rates, or customer retention weekly. When people actively monitor key numbers, it naturally drives them to adjust their strategies and behaviors.

👉 The easiest way to improve your startup is to focus on measuring what truly matters.

To find what truly matters, you might first have to keep an eye on a bunch of parameters.

Avoiding certain stats because they make you uneasy? Look at them twice as often. The discomfort of facing tough numbers can be the push you need to make impactful changes. Andy Hargreaves best put it:

❝

Measure what you value instead of valuing what you can measure. You can’t improve what you don’t measure.

Andy Hargreaves

Keeping it concise here, here are the most commonly use metrics with hypothetical examples that you should definitely be familiar with.

Cost of Customer Acquisition (CAC)

The total cost of acquiring a new customer, including marketing and sales expenses.
A SaaS company spends $10,000 on ads and generates 50 new customers. The CAC is $200. If their average revenue per customer is only $150, they are losing money.

Time to Value (TTV)

The time it takes for a customer to experience the core value of your product after signing up.
A task management app tracks how quickly users create their first project. If most users take 7 days, optimizing the onboarding process to showcase project templates could reduce this to 3 days.

Daily Active Users (DAU)

The number of unique users interacting with your product daily.
A B2B analytics tool observes 1,000 DAU but wants to reach 2,000. Adding daily email summaries nudges more users to log in.

Customer Lifetime Value (LTV or CLV)

The total revenue a customer generates over their relationship with the product.
A B2B SaaS subscription service has a LTV of $1,500. By introducing upsells and add-ons, they aim to increase this to $2,000.

Churn Rate

The percentage of customers who stop using your product within a timeframe.
A B2C fitness tracking app sees a monthly churn rate of 10%. Adding a loyalty program reduces this to 7%.

🗺️ Method: Startup Metrics 101

Here are most commonly used metrics that you can (and should) start measuring different areas of your startup right away.

In 5 key sections:

Acquisition
Activation
Engagement
Monetization
Retention

Here below is a comprehensive database that covers them all - it’s free:

Startup Metrics 101

✅ This comprehensive list provides all critical metrics for Acquisition, Activation, Engagement, Monetization, and Retention are tracked systematically. Import these categories into Notion as a database with custom fields for definitions, status, and insights.

scalablenews.gumroad.com/l/startup-metrics-101

👉 I hope this comes in handy - it’s yours!