15 important metrics for start-ups to track
Tracking metrics is transformational. Tracking the key measurable metrics for any team or organization keeps individual team members motivated and gives a sense of the team's progress transparently.
There are several metrics that a team can measure and track, but doing so for every metric won't add value as it would be too noisy. Measuring and focusing on irrelevant metrics is a distraction, and in the long run, it can damage the team's performance and morale. It is essential to pick metrics that make sense. It is worth spending time as a team to decide what you want to track and then put systems in place to automate tracking.
We've put together a list of some crucial metrics categorized by teams that will give you a headstart. You can use this list to start a conversation within your team to figure out which ones are the most relevant to you.
Speed and reliability are two key indicators of the performance of engineering teams. We need to keep moving, building new things, and shipping new features to keep up with the users' needs. All this while making sure the software is reliable. We recommend tracking a mix of signals related to the team's velocity and the code's quality.
1. Sprint completion percentage
Teams set sprint goals at the beginning of a sprint cycle, further broken down into smaller tasks. While different teams follow different sprint cadences — one week to one month depending on various factors — keeping an eye on the progress helps everyone in the team to stay on track. It especially helps team leaders to identify which individuals in the team need assistance to complete their tasks. Tracking sprint completeness saves the need for assumptions, provides opportunities to address risks and blockers on time, and stick to the defined timeline.
Most project management tools provide a way to export completion data in different formats like CSV or via an API, so it's fairly straightforward to track this metric.
2. Test coverage
Test coverage is an excellent metric that indicates the robustness of the software. Engineering teams write different tests for their code — unit tests, integration tests, functional tests, etc. These metrics indicate how much of the code is covered by tests, ensuring that the correct behavior is asserted systematically.
Code quality tools like DeepSource can help track test coverage of codebases in different programming languages, and it's fairly easy to set up.
3. Pending pull-requests
Tracking the number of pending pull-requests weekly or monthly is a great way to ensure that the team moves swiftly and doesn't get bogged down with stuck tasks. Many teams put restrictions on the maximum number of days a pull-request can stay pending to ensure that no changes stay un-merged or un-released for a long time.
Tools like Dependabot provide a way to keep a check on the pending pull requests and also remind team members about the ones they need to take action on.
In tech companies, infrastructure teams are responsible for making sure the application is up and accessible to the customers, and the company meets the uptime guaranteed in the SLAs to the customers. Cost optimization of the cloud infrastructure is also an important goal that internal stakeholders set for the team. Here are some metrics that can act as a starting point.
The uptime is a simple but powerful metric that tells you how much time your website has been available to the users. It is a percentage measure that gives you an idea of how much duration your website has been down in a given period. Tools like Pingdom and Apex Ping provide a simple way to track your user-facing web services' uptime reliably.
Your users should be able to access your application fast — and latency is an important quality of service measure if you have users around the globe. Grafana provides several plugins that can be used to measure latency from different geographical locations.
3. Resource utilization
If you're running a tech business today, there are high chances that you use one of the public clouds like Google Cloud Platform, Amazon Web Services, or Microsoft Azure. While public clouds come with many conveniences, the costs can get out of hand if you're not planning your resource utilization properly. All these cloud services provide tools that can help you plan and optimize your spend on resources. It is worth spending some time identifying what services can be optimized, so your costs are under control.
Sales metrics are especially critical to the success of your business. The risk of failure is high, and sales leaders can't use intuition to drive themselves and their teams. Picking the right measurable metric that they need to be paying attention to is a crucial task. Each sales team will have its product they are accountable for, and it usually falls in the below buckets.
1. Revenue booked / New accounts
Getting new customers is the primary revenue-generating activity that finally adds to the individual sales executive's target and the business. Some teams measure progress against the total revenue booked, some others measure that against the number of new accounts booked, and some measure progress against both these metrics. Making revenue performance against time-bound targets accessible to the team at all times is a positive way to increase transparency and accountability.
2. Number of meetings booked
Generally, sales development executives have a target number of meetings for a week, tied to the number of closures required to meet quarterly goals. The total number of meetings booked is a straightforward value, and taking stock of this metric indicates your team's ability to grow revenue.
3. Lead to customer conversion rate
Conversion analytics allows your team to continuously optimize performance and take stock of efforts that work and those that need to be fixed. Tracking of conversion rates allows for teams to work towards improving customer experience steadily. This metric can be aggregated from data coming from marketing and sales functions if you use a CRM or a marketing automation tool.
As marketing teams engage in various activities to make the product more visible to potential customers, tracking measurable metrics helps ensure these activities are effective. From inbound activities like creating landing pages or writing blogs to outbound marketing campaigns, here's a list of some important metrics you can begin with:
1. Website traffic
Marketing teams measure traffic for every campaign they run. This represents the size of the audience you are reaching, and as you expand your campaigns or start new campaigns, you will want to see how effective your efforts are in real-time. It is also valuable to break down the traffic into segments based on demographics, device types, and other parameters depending on the campaign.
2. Marketing Qualified Leads (MQLs)
Marketing qualified leads are usually identified when visitors to your websites drop their email addresses in exchange for downloads, research papers, or any other content. This means the visitor has indicated an interest in what you have to offer. The number of MQLs and growth over time is a function of how effective the marketing team's effort to drive traffic to the website has been. Real-time visualization of MQLs will give a sense of the effectiveness of the team's efforts.
3. Newsletter sign-ups
Building an audience is another key responsibility of marketing teams. You want your product and your insights to reach as many people as possible. While these numbers may not convert to qualified leads, it increases your product's reach and your company's voice. Newsletter sign-ups is one of the primary indicators of an audience base. This metric will be most useful to the marketing team, who can then work towards increasing or reducing efforts to build an audience.
Founders are accountable to themselves and other stakeholders in the company, such as their investors. There are a handful of metrics that are accurate indicators of a company's progress. Having access to these metrics at all times gives perspective on where the company stands today and how much work still needs to be done to meet their goals. There are innumerable metrics that founders track on various dashboards. However, having a handful of these readily available goes a long way.
1. Monthly Recurring Revenue (MRR)
Monthly Recurring Revenue is all of your recurring revenue normalized into a monthly amount. MRR tells a lot about the company's revenue trajectory. When founders have access to MRR easily, they are better positioned to control, plan, strategize, and implement the next steps towards the company's goals. It paves the way for timely investigation of their processes to understand what is working and what needs fixing.
2. Daily and monthly active users
Active users as the ones that regularly use your service in a defined period. It's important to track this metric as it gives a good sense of how important or useful your application is to users.
3. Cash in the bank
Keeping money in the bank is the topmost priority of a founder or a CEO. As founders, you must stay on top of your financial status as a company and detect problems well before the situation gets out of the hand. Tracking cash in the bank gives a clear indication of the burn rate and your business cash position. Having this number in front of you at all times helps make more data-driven and fewer ad-hoc decisions.
What other metrics do you track at your company? Tweet to us @getspiti and let us know!