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1) Some thoughts on metrics. The best founders I've ever backed have all been incredibly metrics driven (there are other important qualities of great founders too, but you cannot be a great founder without being metrics driven IMO).
2) What does this mean? Simply put, it means really understanding what levers drive your business. Business, at its core, is simple. You want to acquire customers for $x. And earn $y such than $y > $x. Execution is the hard part but understanding Y > X is the key.
3) Being metrics drive is about understanding the funnel of a customer. How much does it cost for a person to learn about you? How much does it cost to cultivate that person into a paying customer? How much can you make on that customer the first time? And then thereafter?
4) Being metrics driven is about understanding segments. If you compare the cohort of customers who started with you in January to the ones who started with you in Feb to the ones who started with you in March, are you getting better or worse over time?
5) Being metrics driven is about segmenting how the cost to acquire customers differs across various customer acquisition channels. And how much they are worth to you segmented by channel.
6) Being metrics driven is then about further understanding if you spend $1 in this particular channel, when you will make that dollar back. And when you will make more money.
7) Being metrics driven is about understanding the flow of money in your company. If your a marketplace, for example, it can be incredibly tedious - you are constantly paying 3rd parties while bringing money in. What does that cash flow look like?
8) As a side note, I'm always amazed (in a bad way) when companies have no idea what their runway looks like. (i.e. when they will run out of money) I get that it's sometimes tricky if money is moving in and out a lot, but having a strong pulse on that is important.
9) Being metrics driven is about understanding how to systematically solve bottlenecks in your marketing funnel. Is your bigger bottleneck getting people to first learn about you? Or cultivate people to becoming paying customers? Or retaining them to be large customers?
10) Being metrics driven is about understanding once you've identified where in the funnel you have issues, why that is happening? E.g. are customers not returning because they are unhappy with you? Or is it that they "forgot" about you to spend more money with you?
11) Being metrics driven is about understanding how can you constantly increase the spread between $x and $y such that $y >> $x. The greater your lifetime value of a customer, the more money you can spend to acquire and cultivate customers. This is a huge edge.
12) Being metrics driven is very much learned. Most founders I know are not that good with metrics to begin with. But the best ones learn to be very metrics driven quickly and early on.
13) Even if a CEO isn't running marketing anymore, the best CEOs ALWAYS have a strong understanding of the numbers. How do you know what the levers of your business are and how do you align everyone around those levers if you are not?
14) Even in the early days when you have very little revenue, it's important to start collecting detailed data so that you can really understand your initial numbers in 3 months. Setting up analytics tools and tracking is important from day 1.
