I’ve had the pleasure of being CFO at two tech startups during my career, most recently with ThoughtWire, where I led a $20 million debt and Series A financing.
In both those startups, there are things I wish I did better or focused on earlier, especially the key operational metrics. But in the moment, you’ll “get to it later” and it seldom happens. You know better, but sometimes you still need to have someone remind you to ‘eat your vegetables’. It’s the foundation to building more value, more impact, and more opportunity out of your company. Here are some ways to start.
1. Clarify and optimize your strategy
An essential first step toward extracting value is to do a baseline evaluation of your existing strategy: your product-market fit, your R&D, your operations, and your go-to-market approach. Yes, it’s hard. Yes, it will take time. Yes, establishing the metrics and measuring that data may divert you from day-to-day activities. But this practice will help you unlock exponential value later on when the stakes are higher.
There’s a lot to be said about following your gut when you’re making decisions, but when you start with baseline data and it becomes part of the company DNA to consistently measure the metrics, your strategy and decisions are significantly de-risked.
Let’s say you’re starting a new initiative. By starting with baseline data and a clearly-defined set of success metrics, you’ll quickly know when your plan is actually working and when you need to pull the plug. As my good friend, Mike Monteith, at ThoughtWire often says, “Hope is not a strategy.” Using data means you can make informed decisions, run effective tests, and iterate quickly.
Dig in, get your hands dirty, pull that data out, and use the numbers to inform your strategy in a way you can measure, adapt, optimize—and share with stakeholders.
2. Think beyond the revenue report
As you start looking more closely at your data, it can be hard to know which metrics to focus on. The most obvious item to optimize is revenue. And that makes sense: maximizing annual or monthly recurring revenue, minimizing customer acquisition costs, or other fast metrics are clear ways to unlock value that investors and buyers love. Just remember, you don’t need to adopt all SaaS metrics. What everyone really wants to see here is how you measure and run your business: show me what you look at to make informed decisions.
And in the pursuit of these, don’t lose sight of the other fundamentals. Use data to look at your unit economics, or use more qualitative insights to measure the sales process, efficiency, and customer and employee satisfaction. This can’t be stressed enough: the metrics you focus on will help you to understand the true levers to scale your business and exactly what outcomes to expect when you pull them. Measuring these can have a direct impact on company value today and in the future.
3. Marry your narrative with your numbers
As a seed-stage company, your story matters. What you lack in traction, you can make up for in grit and potential. But as you scale, that story needs to show evolution—and be backed by data. Revenue growth only gets you so far, especially when you see revenue plateau or you start having unexpected misses in your projections because your model was wrong or you didn’t really understand where to invest resources to unlock future value.
Remember: while your data is only as strong as the narrative you build around it, your story is only as strong as the data that substantiates it. Think about both simultaneously to unlock current and future value for your business.
As a leader of a growing tech company, there’s always going to be more to think about, plan, measure, and solve than you have time for. Focus on the quality of your strategy, use your data to inform decisions, and build and adapt your story as you grow. Plan for these from day one and you’ll not only keep the lights on, you’ll keep doors open to greater value and a more successful exit. Eat your vegetables.
I look forward to speaking with more Canadian entrepreneurs about how we build our companies, levelling up together to create an ecosystem where we can scale the impact of our businesses and extract maximum value.
Interested in learning more about scaling up? Visit us online or read what my colleagues, Cameron and Michael, have said on the topic, and stay tuned for other insights from our tech team. Want to talk further in person? First round’s on me—drop me a line at firstname.lastname@example.org.
This article was originally published on LinkedIn.