Startup Performance Index

    Some comments on my latest topic suggested that it is very important for a startup to somehow evaluate its achievements.

    Yes, there are market heavyweights that many are guided by, but as many people correctly notice, they are still far from real business, because the business model is quite primitive and not verified (but the founders are actively engaged in the redistribution of property within the company).

    In this regard, the question arises: how to really evaluate any achievements of a start-up Internet company. In other words, “how are we going to measure ourselves?”


    A small digression.Once at the university, in business English, they offered a text that told the story of a British entrepreneur. He is estimated by experts. recognized as the most successful hi-fi equipment retailer in the UK. To come to this conclusion, the experts proposed a very simple criterion: profit / m2. There are giant electronics supermarkets, but the values ​​of their profit / m2 did not even compare with the performance of this network of small hi-fi equipment stores. Conclusion: although the largest electronics markets had more profits, they lost in comparison, because they sold less per m2 of occupied space. This recalls the story of an ant and an elephant, which were measured by strength and the ant raised a wand, one and a half times its weight, while the elephant lifted only more of the log.

    Jim Collins’s book “Good to great” expresses the idea that it is almost a priority for a company to recognize its “key indicator”, which will allow management to evaluate if there are any significant shifts in a positive direction or not?

    I share Collins' point of view and would like to offer some indicators that young Internet companies could use to evaluate the effectiveness of their future or existing business.

    1. For social networks : profit per number of users. Who cares how many millions of users on your network, if it does not bring money or only 0.000000000000000000000 (0) 1% of their users use paid services that barely cover overhead costs?
    2.For services : sales for the number of visits / registrations. The main objective of services, as it’s not hard to guess, is the sale of their services, which means that it is important to understand what% of people who visit their website or use their free services pay for additional options or programs.
    3. For everyone : profit on the number of employees. Suppose we have two companies, one of which earns 1,000,000 a year, and the second 10,000,000. The first company employs two people (think this doesn’t happen?;) Look at hotornot.com, which just recently started hire the first additional employees), and in the second - 10,000 employees. The conclusion "who is cooler" suggests itself.

    Well, a small list for an example. Maybe you will have other suggestions for possible indicators?

    Also popular now: