KPIs are crucial to your startup’s growth. Are you doing it right?

Commerce loves its buzzwords, but it’s hard to think of one that buzzes more than KPI. With everyone from CEOs of MNCs to your neighbourhood grocery store owner in the loop, KPIs have become a ubiquitous feature of day-to-day business. They’re easy to track, easy to understand, and most importantly, reflect the bottomline. Getting the hang of them should be a cinch for a growing startup, right?

Wrong.

According to Columbia Business School professor Michael Maubossin, many companies end up measuring their progress by the wrong KPIs, simply because they use the same ones that everyone else is using. When it comes to KPIs, blindly following the crowd just won’t pass muster. Here are five tips to ensure that you’re choosing the right KPIs for your startup.

1. Do your homework

Certain KPIs may seem universally applicable, but varying circumstances, resources and objectives often play a bigger part than you’d think. That’s why it’s a good idea to feel out exactly where your startup stands and what you want to achieve before fixing upon any KPI. There’s no point in adopting that KPI everyone seems to be using, only to subsequently discover that it doesn’t reflect your definition of success.

2. Search for cause and effect

This might seem like a no-brainer but, is again too often overlooked in favour of the lowest common denominator. An all-purpose KPI like revenue growth may tell you that your startup is heading in the right direction without identifying what is actually driving that growth. Try looking for more predictive and specific indicators, ones which persistently tie into the figures you’re getting.

3. Nonfinancial indicators are important too

Nothing spells profit like a large percentage increase in ROI or sales volume. On the other hand, KPIs measuring variables such as customer satisfaction or user experience can be equally or even more revealing of success factors. And when we’re talking about startups and their focus on providing services and creating value, nonfinancial indicators become all the more crucial.

4. Things (and indicators) change

Even if you do manage to hit on the right KPIs from the start, they’re not going to be right for your startup forever. Market conditions, consumer tastes and regulatory laws change all the time, to say nothing of the volatility that characterises a startup’s developmental journey. It makes sense that when the goals and targets of your startup change, the KPIs you use to measure whether you’re achieving them will as well.

5. Keep the big picture in mind

KPIs usually (well) indicate how you’re performing in the short term, but don’t let immediate gains make you lose sight of your Big Hairy Audacious Goal (BHAG). That’s the one you’re aiming for in the long term, and the KPIs you monitor should also help to keep you on track. In other words, link your short-term goals with your long-term vision, and choose your KPIs accordingly.

Supercharge your sales at #tiasg2017 Revenue stage

We only have so much space in this article, so if you’d like to find out more about how you can pick the KPIs that matter, why not join us at Tech in Asia Singapore 2017? William Gilchrist, ex-Google and founder of Konsyg, Singapore-based technology SaaS company, will be holding a talk titled “How to set KPIs to determine the health of your sales”.

From just USD297 for startups, you can gain access to William’s talk at the Revenue Stage as well as all sessions on our four other content stages this May 17 & 18. If that isn’t enough, your pass will also give you access to the startup exhibition and other conference segments as well.

With less than 24 hours left, book your conference pass now to shave 15 percent off with the promo code ‘tiasg15’ (valid until tonight, 7 April, 2359 GMT +8)! Time and tide wait for no man.

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from Tech in Asia https://www.techinasia.com/kpis-crucial-startups-growth
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