I’ve spent most of this week in Auckland, and during that time have had the opportunity to show a few people One Metric, as it stands. Like the product itself, the pitch is a work-in-progress. I’ll be fascinated to come back to this in the future and see how it has evolved, but this is how I’m presenting it at the moment…
Post Trade Me we’ve invested in 24 early-stage ventures. 14 of these are active today, in one form or another. We’ve been fortunate to work with a number of companies as they have gone through the start-up phase, starting small and growing quickly. One of the great things about this is we get to see the repeated patterns.
The most successful founders are those that use data to track their progress and inform their decisions.
As investors and advisors, when a founder goes quiet that is a usually a good sign that the venture is in trouble.
Every founder is sitting on a gold mine of data about their business, full of opportunities for improvement, but most never unlock it.
It seems far more common for founders to feel overwhelmed or outright misled by data than to feel informed or driven by it. Even for those who understand the importance of tracking metrics, a completely blank spreadsheet is a daunting prospect.
Starting a new venture from scratch requires multiple leaps of faith - that you’ll be able to build the product, that the market exists and that you’ll be able to reach it. It requires a level of delusion on the part of the founder - you have to believe something that isn’t currently true. This creates a big gap between what you say (“everything is amazing!”) and what you do (“how can this possibly work?!”). Lots of founders talk about being data driven, but few actually do it.
The habit of sending regular updates seems to be the thing that makes the difference, and keeps founders grounded in reality. Even if they are just simple dashboards and high-level explanations, the process of looking at the numbers and asking what is working and what isn’t ensures that and problems get surfaced and dealt with sooner rather than later (in early-stage ventures there is often no later).
So, the question that we’ve asked ourselves is: Can we make something that helps founders who want to do a better job of tracking their metrics and for investors and advisors who want increased visibility to how things are going? Can we get people to establish the habit, so that using numbers to honestly reflect their current position and inform their decisions becomes part of the culture of their venture?
To answer this, we first needed to understand what actually makes this so hard. (Or, using the great question that any founder who has worked with me over the years will be familiar with: what are the biggest constraints?!)
We’ve found three problems …
Firstly, it’s hard to know what to measure, especially when you’re first getting started. There is a huge amount of information out there about different metrics you could or should track, but knowing what is appropriate for your business model and stage takes a lot of time. We’ve found that many founders (and investors, for that matter) are paralysed by a blank spreadsheet.
Secondly, regularly updating your numbers in a single place involves a lot of copying-and-pasting values into a spreadsheet, which is time consuming, and error prone. The state-of-the-art is a complex (and typically messy) spreadsheet, and often the only person who really understands how it all hangs together and can be updated is the person who built it.
Last, but not least, once they’re updated you then need to share your numbers with your team, and anybody else who might be interested (your board, advisors, and current or prospective investors etc). At the moment that means either sharing your whole spreadsheet, which can be confusing (and embarrassing, depending on how well the spreadsheet is built) or even more copying-and-pasting values into board reports or investor updates.
So, what would a solution to these problems look like?
It would provide simple templates, to help you quickly choose the right metrics for your business and stage. And, it would let you add more complex metrics over time, as you get more comfortable.
It would be like a spreadsheet but with guard rails that make updating your numbers much less error prone (for example, it would let you enter formulas and formats in one place and use them consistenty throughout and it wouldn’t let you overwrite calculated values).
It would allow you to import values directly from external systems, eliminating copying-and-paste entirely for those metrics (for example, to let you import financial details directly from Xero, or funnel metrics directly from Google Analytics).
It would create reports that let you understand your metrics - the current values, the trends and how you’re tracking compared to your goals or standard benchmarks. Over time it would help you to narrow your focus on the metrics that matter most to your venture.
But also reports that look great, so you’re proud to share them with anybody else who is interested and can help you extract the lessons. Doing this would be a quick and easy as inviting them to join your team or sharing a link.
Analyse. Gather. Share. Know your numbers. That’s OneMetric.io
I look forward to showing you more soon!
We’re currently looking for the first dozen customers to help us learn more about how people will actually use a tool like this, and iron out the bugs before we make it more generally available. If you’d like to be one of these, please register here and we’ll be in touch shortly.