Startup metrics - Matt Dyor of Payboard

14
Startup Metrics Matt Dyor Payboard Co-Founder and CEO Payboard Conversion Automation

Transcript of Startup metrics - Matt Dyor of Payboard

Page 1: Startup metrics  - Matt Dyor of Payboard

Startup Metrics

Matt DyorPayboard Co-Founder and CEO

PayboardConversion Automation

Page 2: Startup metrics  - Matt Dyor of Payboard

Startup Moneyball

Matt DyorPayboard Co-Founder and CEO

PayboardConversion Automation

Page 3: Startup metrics  - Matt Dyor of Payboard

Startup Metrics Background

Page 4: Startup metrics  - Matt Dyor of Payboard

Make Websites Intelligent

Page 5: Startup metrics  - Matt Dyor of Payboard

Core Metrics

• Market Metrics– Size of Market

– Growth of Market

– Competition

• Startup Metrics– Validation

– Leading

– Operational

Page 6: Startup metrics  - Matt Dyor of Payboard

What is a metric?

An objective measurement of the present health and future potential of a business.

What is your goal?

What kind of business are you building?

Consulting, Bootstrap, VC-backed?

Page 7: Startup metrics  - Matt Dyor of Payboard

Market Metrics

• Market Metrics– Size of Market: more than a billion, less than a trillion

– Growth of Market: growth is provable or believed to be true

– Competitive Landscape: who currently owns this market

• Market (alone) rarely interests investors: – huge market + easy-to-build opportunity = incumbents will win

– small market + easy-to-build opportunity = lifestyle business

– huge market + a hard-to-build solution = why you?• Odds are, none of us can defend why our team is uniquely positioned to

dominate a market, so we have to rely on startups metrics.

Page 8: Startup metrics  - Matt Dyor of Payboard

Startup Metrics

• Validation Metrics – is there a pain worth solving?

• Leading Metrics – is the startup making progress towards a commercially meaningful solution?

• Operational Metrics – what is the present health and future potential of the startup?

Let’s go in reverse order

Page 9: Startup metrics  - Matt Dyor of Payboard

Startup Metrics - Operational

• Customer Acquisition Cost: – incremental cost to acquire a customer. If you say nothing, you are not credible. Go invest some

money on Google Ad Words.

• Lifetime Value:– Monthly revenue x average lifetime (in months)

• Average lifetime is 1/monthly churn rate.

• The longer, the harder to defend. 3% monthly churn / 3 years is ballpark.

• Months to Recover CAC: – Should be less than 12 (eg-if you charge $100/month, CAC should be less than $1200)

• Lifetime Value / CAC: – 3 or higher for SaaS

• Operating Costs: – Mostly people – how many of them and what rate. $7k-$10k/developer/month.

– Funds raised need to cover anticipated costs for 12-18 months.

• Initially, you will have very sparse data on any of these metrics.– Either get to positive operational metrics, or come up with credible leading metrics.

– Leading metrics require a larger market (higher risk/less proof).

Page 10: Startup metrics  - Matt Dyor of Payboard

Startup Metrics - Leading• What do you do before you have meaningful operational metrics?

– Make something up.

• Needs to be close to operational metrics, and give investors confidence that there is a positive relationship– Awesome for Payboard: number of influenced purchases increasing per month.

– OK for Payboard: number of people streaming data to Payboard.

– Weak for Payboard: number of page views and signups.

• Needs to be up and to the right – every business needs traction. – You need to be able to influence these metrics.

– Gives you clarity on what to prioritize.

– Can be down and to the right:)

Page 11: Startup metrics  - Matt Dyor of Payboard

Startup Metrics - Validation

• Measurements of customer discovery (conversations) that support operational metrics.

• Talk to 100 potential customers before you build.

• Validate that they *say* that: 1) they have a problem; and 2) they would be willing to pay you to fix it. – Do not get them to buy off on your solution.

– Do get an understanding of how they purchase other tools/services.

– Your goal is to find the customer segment that is most hungry for a solution.

• Nobody cares about your validation metrics-they are for your team.

Page 12: Startup metrics  - Matt Dyor of Payboard

TeamWe are all making it up

Questions?Skype matt.dyor!

…so make up something awesome!

Page 13: Startup metrics  - Matt Dyor of Payboard

Data = Payboard’s Raw Material

# of user clicks / month is growing.

Page 14: Startup metrics  - Matt Dyor of Payboard

Integration is Getting Easier

It takes 5 minutes to get started.