Measuring the right data in your business is essential for long-term planning. Startup success depends on making strategic decisions to improve these core numbers or metrics.
This course is required for anyone planning to start a business or those who have already have a business but don't have a business training and are not familiar with the fundamentals of analyzing the performance of a business.
This course walks you through the three stages of every startup. It goes deep into business numbers and strategies, breaks them down, then takes the core principals out of them.
Entrepreneurs need to know what core numbers to look at, how to track them, and how to improve them. Very often entrepreneurs seeking investment aren't able to answer simple questions about their finances and provide solid numbers in front of a venture capitalist.
This course will create a solid foundation for entrepreneurs to learn about startup metrics and make sense of the numbers in their business.
Welcome to this course. Let me tell you why the content of this course is important for every entrepreneur, what topics I will cover, and a lit bit background about myself.
As an entrepreneur you should decide and be clear about what type of business you are building. This decision affects your strategies in growing and allocating your resources and efforts. There are two main types of businesses.
When you start raising investment money for your startup, you should study the investors before you approach them. Pick the ones that have a investment criteria that match your startup.
To become interesting to investors, you should show that your first attribute is that you are an effective entrepreneur. This means you understand and can focus on the highest priorities at the stage you are in. You can execute, measure, and improve. This course is giving you a framework to know what to focus on, how to measure it, and how to improve it.
In product/market fit stage you are exploring, and figuring out what problem you are solving, what your solution is, and who your customers are.
You need a metric to measure if there is fit. This lecture gives you a simple way to measure your product/market fit.
Learn the key metrics in showing the efficiency of your business in using cash, its capital needs, and the timeline for the next fundraising.
What is MVP (Minimum Viable Product)?
After you find a product that is in demand you are ready to put resources into accelerating the growth of your business. This stage has its own unique challenges, goals, and performance metrics to be measured.
You should think about how you can increase the frequency of purchase for each customer. MRR is a metric that measures the recurring revenue.
Let's learn the terms related to sales funnel: lead, prospect, customer, loyal customer
Funnel helps you to figure out how much to spend to acquire one customer, compare different channels that you use to acquire customers, and find your best customer segment.
VCs look at churn rate as an indicator of whether or not you really have a good product/market fit. If your user growth reaches a plateau after 6 month, because users are leaving, that is a sign that your initial product/market fit was based on a small sample of data. You should think about ways to improve the churn rate.
When growing a business, the financial structure of the business model impacts how much capital is required to grow the business. One common problem companies face is the cash flow problem.
To fuel customer acquisition you may have been experimenting with affiliate programs, paid advertisement, PR, content marketing, partnerships, referral programs. Soon your growth starts to slow down and you’ll need to focus on what is working the best. It is important that you test and measure these experimentations and then put more resources into those that work.
This is an important metric that shows how much you earn in total from a customer before they leave your business.
How much can you spend to acquire customers (e.g. on Google or Facebook)? By keeping an eye on this metric you know how far is too far.
Entrepreneurs make mistakes in calculating how much they spend on acquiring one customer. This number is very important and impacts your customer acquisition strategy. Therefore, you should avoid these common mistakes and calculate it correctly.
Magic number is a metric that shows how efficient your marketing strategy is.
Contribution margin is a metric that shows how much of each dollar in revenue will be kept as profit.
What is considered good/better/best for these metrics?
VCs have started to evaluate investment opportunities with an imaginary benchmark in mind: can this startup become a $100 million per year opportunity? Let's look into 3 ways you can reach to this benchmark.
These are the companies that generate $10s from each customer. What are the key metrics for the specific challenges they have?
Steve starts a business. Let's go over his numbers.
Let's rewrite the profit formula to discover the impact points.
Let's change the fixed cost and see its impact on the profit.
Let's see the impact of changing the unit cost on the profit.
Let's see the impact of changing the unit price on the profit.
Let's see the collective impact of changing the five impact points on the profit.
I am the founder and CEO of a tech startup in Silicon Valley. In my executive and management roles I have created and sold software and hardware products, have raised investment money, and have established strategic partnerships. In my role as an instructor for the MBA program at the University of Maryland I have taught business growth strategies for startups and have been a mentor for startups. I started my career as an engineer (with a PhD degree in Engineering) and product manager, but soon found my passion in building and growing companies.