Emakase was thrilled to have had the opportunity to learn from Mr. Bui Hai An, Deputy CEO of Timo Vietnam. The conversation covered topics from startups performance metrics to sales strategies, read on to learn more.
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This is a trick question, as startup is a very general concept. Before deciding what metrics a startup should look at, it’s necessary to know which industry they are in and what their business model is. Startups must consider a variety of metrics when determining their success, as the story of a B2B or B2C startup is expressed through vastly different metrics. A consumer app startup, for example, could look at their user base, active users, or user growth. A manager needs a dashboard to see the direction the company is heading and diagnose any potential problems. This dashboard is similar to a car's dashboard, as it tells us whether we are going fast enough, if we have enough petrol left, and if the engine is running dangerously hot.
When looking at data, it's important to ask, "So what?" What does this piece of insight tell us and what can we do with it? Does it tell a particular story or spur a new strategic decision? Thus, simply choosing one single metric is never sufficient to run a company.
If you are beginning your startup journey, research the metrics used in your industry by similar companies. After having the first numbers on the dashboard and having tracked the report monthly or weekly, it can be fine-tuned to best suit the needs of the business. It's also important to track both maximization and controlled metrics. Maximization metrics show the growth and expansion of the company, while controlled metrics show the sustainability and stability of the company's journey in the long-term. As the business advances, aside from speed, the founder must make sure the car is heading in the right direction, in a safe manner. For instance, customer acquisition costs must be comparable to user growth and average revenue per user. Controlled metrics show the sustainability and stability of the company’s journey in the long-term.
Back to your question, the best choice is always a combination of different metrics, starting with templates and market standards.
Sales is often a misused term when it comes to startups, especially those that are B2B. Instead of jumping straight into product development, customer development should come first. This is where you meet and talk to customers to validate your hypotheses and assumptions about their problems and proposed solutions. Selling your idea of a solution to your target customer is the first step before product development.
Many inexperienced founders, especially those with a technical background, make the mistake of jumping too quickly into product development. Without validating their ideas with customers, their products are often misses. After customer development, selling the actual product will be much easier.
With an MVP on hand, sales should be conducted by the founder. Don't outsource sales too early without focusing on iterating the sales process. Founders with a technical background may lack the skills to talk to customers or approach potential leads, so they immediately hire a sales specialist. However, a typical salesperson is used to working with a finished product, whereas a startup requires them to build a new process and work with a constantly changing product. Thus, the founder should be responsible for the first 10-20 customers, as this will provide direct feedback and allow for constant improvement.
Although trained professionals can be valuable, the founder should lay the first building blocks. At this pre-product-market fit stage, the message, approach method, sales strategies, and customer touchpoints must constantly be adjusted. For large and complex sales, buy-in from multiple teams with different protocols and personnel may be required. The sales process must be continuously iterated alongside the product. After a repeatable process has been reached with the first 10-20 customers, the founder can outsource and focus on other aspects of the company.
As shared above, for startups, the improvement of products, processes or even pricing is easy and agile. For large corporations with a well-established offering, any change means huge commitment of time and effort. The space for customization is small and the costs for doing so is expensive. A startup, on the other hand, needs to find customers to prove the potential of their product, making change a requirement. Then, the question is how best to utilize that agility, emphasizing your efficiency and ability to solve problems compared to the available alternatives. Although startups are quicker, more flexible, more willing to sacrifice, the key is finding the right attacking points and making a difference using the right metrics and strategies.
