Visible Blog

In 2015, 78 New York Times articles have included the word “Unicorn”. That ties this year with 2014 for the word’s highest number of mentions and with investors and pundits surely clamoring to puff up or tear down a couple more companies before the holiday break, odds are good that we’ll see a few more mentions in the (web)pages of the “Gray Lady”. 1901, as evidenced in the chart above, was a far less enlightened time than we live in today. For starters, “Unicorn” made it to print a mere 5 times during the course of the year. And while transatlantic experimental radio communications were made for the first time, we were years away from Radio on the Internet. Although Satori Kato filed a patent for the first soluble instant coffee, Blue Bottle wouldn’t open its doors until more than a century later. Additionally, Micro VCs and accelerators were few and far between…meaning businesses were forced to actually make money to stay in operation. (Add to that Stanford’s crushing 49-0 loss to Michigan in the first ever Rose Bowl right at the beginning of 1902 and it made for a tough time for Silicon Valley’s tech elite). 1901 was also the year that saw the birth of the world’s first Unicorn – long before Aileen Lee coined the term in 2013. Through a merger of 10 different steel and manufacturing companies, U.S. Steel Corporation became the world’s first billion dollar company with an authorized capitalization of $1.4B (just under $40B in today’s money). The names surrounding its origin remain recognizable to this day and adorn skyscrapers, foundations, and institutions across the globe. There was John Pierpont Morgan, who entered the steel industry a few years prior to the founding of U.S. Steel and is better known for the massive financial firm now bearing his name as well as his rescue of the U.S. economy during the Panic of 1907. There was also Andrew Carnegie who founded Carnegie Steel in 1873 and agreed to be bought out by Morgan for just south of $500MM in bonds and stock of the newly created U.S. Steel in order to retire to a life of philanthropy. Additionally, two Rockefellers, Marshall Field, and Charles M. Schwab (not to be confused with Charles R. Schwab) had key seats at the table during the formative years of the business. The Not So Lean Startup 1902 was the first full year of operation for the fledgling business, a year in which they employed over 168,000 people and had a payroll figure of $120,528,343 (in 1902 dollars). For perspective, U.S. Steel had a larger employee headcount than contemporary behemoths like Apple (115,000 employees), Amazon (154,000 employees) or Microsoft (128,000 employees). Like many of today’s billion dollar companies, U.S. Steel paid its rapidly growing base of employees more on average than a typical American worker. We can only assume these wage discrepancies caused a massive influx of free trade, organic coffee shops and dog yoga studios into the early 20th century Youngstown, Ohios and Gary, Indianas of the world. It’s not being a hipster if computers haven’t been invented yet! Predictable Revenue is easy when your Board of Directors runs the economy Today, investors and pundits worry about companies with negative unit economics, high burn rates, and unsustainably high valuations. For U.S. Steel, the only concern may have been where to find a safe big enough to store all the cash it was throwing off each month. In addition to its impressive top line numbers, the company was highly profitable and grew that profitability each month on a Same Month YoY basis. And while regulators may have had issues with the business, investors likely had trouble speaking a questioning word through the wide smiles they had on their faces as they walked to deposit $56,52,867 in dividends in the bank. At the end of 1902, the company was left with a cash balance of over $50,000,000. Imagine all the passive-aggressive bus stop advertising they could buy today with that kind of money! Life Before AWS Today’s companies are fortunate to live in the age of AWS and WeWork, where two or three people can build a product, find some users or revenue, and display enough traction to raise capital from investors. Launching a startup today is significantly less capital intensive than it was 20 or even 10 years ago. 115 years ago? In its first full year of operation, U.S. Steel spent over $29MM on the maintenance and renewal of capital equipment alone… …and was mining millions upon millions of tons of iron ore all across the world. The inventory of hard assets in most early stage companies today consists of nothing more than a few MacBooks and a ping pong table. Guilty… U.S. Steel Today With a current market cap of just under $1.3 billion, the company is worth less (on a non-inflation adjusted basis) than it was over 100 years ago. It remains one of the largest integrated steel companies in the world (and the largest in the U.S.) but, of course, that that title means significantly less than it did in the days of Morgan and Carnegie. And while it may be long in the tooth, the stock chart below shows that the company still appears to have a taste for the boom and bust lifestyle of the early 20th century — which, frankly, seems to be the lifestyle many of today’s emerging unicorns favor as well. And because there is never a bad time for a Godfather clip, we are compelled to mention that the company played a crucial role in the 20th century rise of America’s industrial might (for better and worse) and became a name that every outsider – from the Corleone family to a number of smaller, more nimble competitors – strived to outdo.

Rockstart Digital Health Accelerator – Startup Metrics Template In early 2015 Rockstart, already a well-known name in the European startup community, launched a new digital health accelerator focused on making a sustainable impact on global health systems. We have partnered with Rockstart to put together a template that you can start using today to get a high-level understanding of how your business looks today and where your growth is leading you in the future. We went a little longer than 3 minutes with this one but we promise it is worth it! What startup metrics matter to an early stage digital health company? As with any early-stage company, focus is key. This is why Rockstart puts each company’s Most Valuable Metric front and center on the business dashboard. The primary reason to have a single, understandable metric for your business is to cut out the noise that comes with trying to track (and take action on) every single thing so that you can hone in on the one thing that drives your success. Read any startup post-mortem and you’ll quickly realize the negative impact that lack of focus can have on a company. In the digital health sector, companies don’t all fit within the same bucket from a business model perspective. The first Rockstart Digital Heal Accelerator class has hardware companies (like Med Angel), marketplaces (like Dinst), and SaaS businesses (like Mount) who all likely have different true north metrics. Revenue and Net Burn – Are you becoming more cash efficient over time? The reality in many early stage technology companies still searching for a sustainable business model is unprofitability. In many cases, companies focus solely on top line (revenue) growth and neglect the need to control costs around things like user acquisition. Taking this approach results in a very cash inefficient business model. In cash efficient businesses, like the example in the video, a company grows revenue at an exceedingly faster rate than it grows its net burn. This leads to (eventually) a self-sustaining business and, in the interim, the ability to raise capital at more company-friendly terms. If you want to learn more about startup cash efficiency, we highly recommend this post from Hyde Park Ventures’ Guy Turner.

Version One Ventures Marketplace Metrics Template Version One Ventures, which closed a $35 million fund in late 2014, is one of North America’s top early stage VC investors. With investments in marketplace companies like Angellist, Indiegogo, and HandUp they are experts in taking companies from growth to scaling. Recently, the firm released a Guide to Marketplaces compiling those insights and and learnings to help you build your business. What Marketplace Metrics should I be tracking? This metric template, which you can access within Visible is inspired by a post from Version One’s Angela Tran Kingyens who was herself inspired by Christoph Janz and his SaaS Metrics template. Here is a deeper look at some of the marketplace metrics we talk about in the video and how you can apply them to your own business. Gross Merchandise Volume (GMV), Revenue, and Take Rate Simply put, Gross Merchandise Volume (GMV) is the total dollar value being transacted through your platform during a given time period. So if in one month there are 100 transactions done through your marketplace with an average size of $50, your GMV will be $5000. Pretty basic. As Andreessen Horowitz put it in the Startup Metrics blog post, it is the “real top line” for a marketplace business. As a single number, GMV is useful in helping understand the high level growth of the business and looks good in press releases and investor conversations. From an operational perspective, GMV gives you a starting point to better understand all of the underlying aspects of your business to more effectively allocate growth-focused resources. GMV by time of year (think Airbnb and seasonal differences), time of day (Uber and rush hour vs. late night volume), and by location or market (any on-demand marketplace opening new markets) GMV by acquisition channel. Marketplace companies, especially in the on-demand space, are often reliant on customer referrals and other types of paid advertisement to get to initial liquidity. If you understand how that channel compares with others (social, organic, etc.) – assuming you also know how much it costs to acquire a customer through each channel – your GMV trends by channel play an important part in helping you allocate your sales and marketing dollars. A word to the wise…GMV is NOT the same thing as Revenue for a marketplace business. This is something to be aware of when discussing the growth of your company with investors, potential employees, or partners. To calculate revenue for a marketplace company, multiply your GMV by your Take Rate. Take Rate is the % that your business “takes” from each transaction on your platform. In recent periods, companies either ignorant of the proper terminology or looking to play sleight of hand in order to spur investor interest have come under fire for misrepresenting the size of their business by using GMV to mean Revenue. Don’t make this mistake. Marketplace Activity Growth As we noted above, marketplaces are all about efficiently matching buyers and sellers. When a marketplace is making these matches successfully at scale, it is said to have reached liquidity. Maintaining liquidity over time is not an easy proposition, as human (customer support for both sides), technical (matching or suggestion algorithms), and hybrid (how to price your offering) considerations bring about a daily balancing act. To add even more complexity, some marketplaces have more moving parts than just a single buyer and seller. For example, DoorDash customers are buying a product from the end restaurant but also the service of having a DoorDash driver pick up the food and deliver it in a timely manner. Net Promoter Score Net Promoter Score was also featured in our recent Shopify Ecommerce Template and for good reason. Any time two parties are transacting, trust is a key element. Am I getting a fair price? Is the product or service going to meet my expectations? Do I have protection in the event something goes wrong? As the conduit for these transactions, maintaining a high degree of trust from buyers and sellers is crucial for a marketplace. Net Promoter Score, which asks customers (and sellers in the case of a marketplace business) how likely they are to refer your product or service to a friend or colleague, serves as a proxy for trust. If people and businesses on both sides are having good experiences on your platform, it can be assumed that they are being treated fairly and finding the value they are searching for. Visible Templates make it quick and easy to get started on the path to successful Data Distribution. Whether you are looking to raise money, send investor updates to your current shareholders, or just keep your team operating smoothly, Visible Templates give you a framework to tell a story around your most important key performance data. We have partnered with top VC investors, high-growth companies, and successful entrepreneurs to create templates that take just a few minutes to set up. See All Visible Template Posts Start Using Templates in Visible

Charting Your Xero Data Using Dashboards This release is packed with a lot of great functionality so “Hold on to your butts”, as close confident Samuel L Jackson would say. First up. We just launched our Xero Integration. Easily connect to your Xero account and we will automatically pull TEN metrics from your Profit & Loss report and Balance Sheet. Start building beautiful Xero Dashboards in seconds! That brings us to — Exporting: We constantly hear, “How can I print my screen?”…or “Is there an easy way to put my charts in a board deck?”. Fear no more, exporting your charts is now here! Simply hover over any chart, click the gear and select “Export”. We’ll let you customize how you export the chart and support SVG, PNG, and JPEG image files. We also give you some clever defaults to nicely format charts for PowerPoint and Keynote! Read more about this in our Knowledge Base. The chart below directly came from Visible! Feel free to use in any of your pitch decks. Now we are grooving. Unicorn status isn’t in vogue like it used to be; however, hitting your forecasts will always be cool ;). Feel free to add as many data points into the future as you’d like! Click the “+” icon in any metric and you’ll start to see what 2020 looks like. And if you need help getting started with financial modeling, we’ve got you covered right here! You can now export all of the data of your company. We are rolling this out in “beta” so shoot us an email and we will tell you how to access this easter egg. We hope you enjoyed this update and as always please feel free to send us any feedback or questions our way! #tellyourstory -Mike and The Visible Team

In building Visible and working hands-on with companies and investors from around the world, we have learned the importance of customization when it comes to what metrics your company tracks and how you track those metrics. For example, a late stage venture-backed Ecommerce company has different needs and goals than a 10 person online store. Both, however, have stakeholders who need to know how the business is performing and what they can do to help the business grow. Thankfully, for every type of business, there are a ton of resources to help you understand what to track and how to track it. With Visible Templates, we have partnered with the creators of these resources – top VC investors, high growth companies, and successful entrepreneurs – to make it easy for you to build a metrics framework and a business dashboard that suits your company. The Visible Shopify Ecommerce Dashboard Shopify is one of the world’s largest Ecommerce platforms and a huge supporter of small businesses and Ecommerce startups anywhere. With thousands of companies of all shapes and sizes using the platform to build online stores and sell their products, Shopify truly has domain expertise when understanding what Ecommerce metrics are most important and how they can be applied to help you grow your business. What Ecommerce metrics should I be tracking? This template was initially inspired by a post from Mark Hayes, Shopify’s Director of Communications where he outlines 32 of the best Ecommerce metrics for a company to track. In the videto above, we have talked through a few of our favorites. Below, we jump in even further to three of the most important Ecommerce metrics your company can start using today: Net Promoter Score, Average Order Value, and Conversion Rate. By the way…did you know you can now export all of your Visible charts in PNG, SVG, and JPG formats? That means better visuals for your pitch decks and other company storyelling materials. Net Promoter Score (NPS) In the past, we’ve written about Net Promoter Score as a way to gauge how likely your current investors are to refer you to other investors, partners, and key employees. The same concept holds true for measuring Ecommerce Net Promoter Score, which asks current customers a simple question on a scale of 1-10: How likely is it that you would recommend our company to a friend or colleague? Because competition is high in the Ecommerce space and switching costs are low for many consumers, successful companies must take a customer-centric approach to growth. This mean embracing NPS as a holistic measure of business performance. Like all important business KPIs NPS doesn’t live in a bubble, it directly impacts other important Ecommerce metrics: Lifetime Value of a Customer (LTV) – customers who fall in the 7-10 range on the NPS scale are likely happy with your product offering, have an affinity for the brand you have built, and can be expected to continue returning to purchase from your site (if you keep delivering on your company promise, of course). Viral Coefficient aka K Factor – Your K factor or viral coefficient measures how many new, secondary users, an individual new user helps you acquire over their lifetime. Happier users refer more new business. Total Orders and Average Order Value (AOV) Running an Ecommerce business, you have two levers you can pull with regards to bringing money in the door (Revenue). The first is doing more volume, or in other words, increasing the total number of orders placed through your site. The second is Average Order Value (AOV), which is a measure of the size of each order placed on your site. Increasing your Average Order Value can be accomplished in a number of ways, including offering future discounts, bundling similar products, or offering specials on shipping. Conversion Rate How effectively are you moving people from the top of the funnel (Visitors) to the bottom (Customers)? This is a core question you must ask yourself as you are designing your product as well as your marketing plan for your Ecommerce company. At a high level, your Ecommerce conversion rate is simply the Number of Total Orders / Number of Visitors. As you get more sophisticated, you can begin tracking more steps in the Ecommerce funnel and honing in on how your conversion rates differ depending on lead source, purchase type, or even time of day.

With the number of places available to gather information on how VCs invest – Mattermark and CB Insights on the paid side, Crunchbase and Angelllist for the burn conscious – it is no longer difficult to understand who you should be trying to raise money from. Want to know who most prolific early stage FinTech investors are, for example? LMGTFY…the first result from CB Insights gives you a good starting point. Great! So it looks like 500Startups is very active in the space but they are a big firm, who should I be reaching out to there? Well…a second Google search might lead to something like this. That was easy. It took me longer to write that last paragraph than it did to find a firm that may be interested in what I am working on and a partner at that firm that may be into what I am building. So why can raising capital be such a difficult and time consuming process, even for companies on a strong growth trajectory? Put simply, it is because most founders haven’t given enough thought to what is behind each individual investor’s thesis. Go to any VC website and it is not hard to find out what their (publicly-facing) framework for making investment decisions looks like. Some of these theses are actually very interesting reads (Union Square Ventures, NeuVC, and OS Fund come to mind). But if you have had the opportunity to speak at length with any successful investor, you will quickly come to find that what they are really looking for — beyond the eloquent “What We Invest In” essays used to make journalists fawn and LPs open checkbooks – is a combination of a good product, a highly functioning team, and a large, growing market. Mark Suster has written about this before, and so have many others. Start with knowing where they start As a founder, you are competing daily for two things – capital and talent. Raising money means selling your company in a way that puts you at a competitive advantage against other startups a VC could back. One of the quickest ways to build this advantage is by understanding which of the three aforementioned decision factors play the largest role in your target investor’s process. You need to know this before the first call or meeting. Instead of “here is what we do, are you interested?” switch the context to “here is why we are a perfect fit for your thesis.” Make it easy for them to fit you into their existing mental framework of how they want to invest instead of forcing them to do all the work to organize their own thinking around your company. Remember, VCs need to sell too. They need to convince their partners that adding your company to the portfolio will have a positive impact. They also need to defend their investment decisions to LPs, often on a quarterly basis. Build an investor interest profile As capital has poured into the system, making money a commodity (side note, that post is from 2000…what’s the phrase, “history doesn’t repeat itself, but it rhymes”?) many VCs have gone on the offensive in order to gather attention and court the best companies. This means a larger social media presence, frequent blog posts, and more interviews. Use this to your advantage by studying what they say and trying to determine which factors loom largest in their decision making. Marc Andreessen, for example, sees market as the determining factor in a company’s success or failure. In a different post than the one noted above, Upfront’s Mark Suster trumpets team as the most important factor in a VC’s decision of whether to investor or to pass. If you are fortunate enough to get an audience with one of the Marc/ks, lead with market and team respectively. Search further (I’m done Googling for you!) and you’ll find plenty of investors who base decisions first and foremost on whether a company’s product stands out amongst its competition. Additionally, leverage the information your peers are putting out into the market. Funding announcements come fast and frequent these days (StrictlyVC and Term Sheet are good ways to keep up. So is Mattermark’s free iPhone app) and are often accompanied with quotes from CEOs and founders around the future of their businesses. The narrative put forth in these funding posts (ahem, press releases) are likely the same ones they used to court and close their investors. Go through enough announcements for companies your target investors have backed and you can build a very detailed profile of what they care about. Want to go a step further? Reach out the CEOs who just closed the round. They’ll probably be happy that your inquiry isn’t another terrible sales pitch and will be open to help since they know first hand the challenges you are up against. Raising capital isn’t a spray and pray endeavor. It also doesn’t operate on the self service model. Even at the seed stage closing a round of funding is a high-touch, big ticket sale where relationships need to be built and nurtured. Any company that closes a round from top investors must have some degree of competence in all three of the main decision-making factors (product, market, team). The ones who do it most efficiently know which areas they excel and which of those factors matter to each and every investor they take the time to meet with.

What is the K Factor/ Viral Coefficient? The K factor or viral coefficient measures how many new, secondary users, an individual new user helps you acquire over their lifetime. For SaaS companies, if the software is good, the individual users will then refer the software to their friends, teams, and companies. In simple terms, a viral coefficient is a number which indicates how many new users a current user is referring to your business. This metric is used to measure the organic growth of a company. Understanding and improving the viral coefficient of your SaaS solution is a crucial part of achieving exponential growth. How to Calculate SaaS K Factor/ Viral Coefficient Here’s how to calculate your K Factor or Viral coefficient, according to Culttt: Take your current number of users (let’s call it 100) Multiply by the average number of invitations or referrals that your user base sends out (100 x 10) Find the percentage of referrals that took the desired action, for example, signed up to be a new user. (12%) If 12% of 1000 invitations signed up for your product you would have 120 new users. You started with 100 users and you gained 120 users. So you divide the number of new users by the number of existing users to find your Viral Coefficient (120 / 100 = 1.2). Kissmetrics notes that a positive viral coefficient rate means four things: You are giving your customers a positive user experience You’ve found product/market fit You have a low cost of acquisition You will probably have high profitability A viral coefficient of 1 or above means that for every user you acquire, you’ll gain at least one additional user through the referral process. Each round of referrals creates a viral loop of growth. Note: This is a very basic model that assumes no user growth from other sources (Paid Advertising, Content Marketing, etc.) If you want to start building charts like this to showcase the growth of your business, start your free 14-day trial on Visible Why it’s important but Not the Only Metric for User Growth Customer acquisition can be challenging for SaaS companies, but having a positive viral coefficient means you are acquiring new customers essentially for free. But what if your viral coefficient is lower than 1? Many people argue that anything less than a K Factor of 1 is worthless, because this implies that your SaaS Company is failing. However this isn’t necessarily true. In reality, as long as you have a great product with repeat customers a K-Factor as low as 0.2 will still equate to a free extra user every time a user signs up. Furthermore, recommendations and referrals should not be your only measure of user adoption and growth. Many SaaS companies, such as ShoeBoxed which has a low viral coefficient score of around 0.16, build customer acquisition by using other channels such as SEO or PPC or content marketing to bring in new users. Instead of bringing in one person, they bring in 1.2 – 1.4. For them, the referral program is just a way to enhance the efforts of all other customer acquisition tools. It’s also important to note that viral coefficient isn’t always predictable, and relying on referral programs doesn’t always equate to short term boosts in users. Some referral processes take longer to make conversions because potential users needed more exposure to multiple referrals before signing up. When digital signature company EchoSign tracked their viral conversions, they found that their average viral cycle (the time from initial user sign-up to successful referral sign-up) was 8 months. Therefore you should always look at your viral loop as a side growth accelerator that will boost all of your other user acquisition efforts. Great Resources for Viral Marketing and SaaS Now that you know how to calculate your K-Factor and understand why it’s a great metric for growth, here are some great articles on viral marketing and some examples of the SaaS companies who are winning the viral marketing game: How Referrals Built The $10 Billion Dropbox Empire, by Visakan Veerasamy for Referral Candy The Best Referral Program Examples, by Brandon Gains at Referral SaaSquatch Customer Acquisition & Monetization, by David Skok for For Entreprenuers ‘Startup Growth Engines: Case Studies of How Today’s Most Successful Startups Unlock Extraordinary Growth’, by Sean Ellis & Morgan Brown This post is part of our Most Valuable Metrics series, helping your company understand how to develop a holistic framework for tracking your performance and telling your story to everyone who matters to your business. You can find previous posts in the series here: Your Company’s Most Valuable Metric How to Calculate Lead Velocity Rate (LVR) Stealing the Right Growth Metrics for Your Startup How to Calculate Bookings What is your Investor Net Promoter Score? How to Calculate SaaS Churn How to Steal the Right Growth Metrics for Your Startup How to Calculate Net MRR

Despite their popularity, most dashboards live up to only a fraction of their potential. In the first full flurry of enthusiasm for a newfangled technology, short shrift has been paid to how to design focused, thoughtful, and user-friendly dashboards. Traditional dashboard design has tended to prioritize the right success metrics, only after which a hodgepodge of charts and a slew of gauges are stitched together in a mishmash single page. While the negative impact of such a design philosophy is curbed in small startups of three or so employees, it bodes poorly for any future expansion and development, when data naturally and exponentially starts to silo. This article discusses five key strategies that founders and managers needs to keep in mind to make dashboard building and implementation effective. 1. Know Your Audience Begin holistically: identify your target audience. Dashboards can be broadly categorized as strategic, analytical or operational. It’s difficult, if not impossible, for them to be all three at once. Tailoring your dashboard’s data to suit its single audience is key. Without a clear understanding of their requirements, you lack the ability to craft a meaningful message that resonates with your users. Who is the dashboard’s end-consumer and what are their information requirements? Is the dashboard destined for financial monitoring by the executive team, or is it intended for daily analysis by the marketing team? 2. Avoid Clutter: Prioritize Data Dashboards are easily cluttered. Given the tons of metrics that you could collect, and the space limitations of a dashboard, it’s imperative that you identify what data matters upfront. Find the core. Your dashboard should have a core theme centering on a specific problem. A sales dashboard may ask “How can we make our pipeline more effective?” Or a marketing dashboard: “How can our marketing investments be optimizes?” Identifying this core will give you the logic for filtering superfluous information. Thanks to your grip on your audience and their usage goals, you are better set to determine the focus of your interface design: key performance indicators (KPIs). Every application, from fitness trackers to powerful online analytics software, is built around a few KPIs. FitBit follows steps, calories in/out, and weight loss, while Google Analytics monitors conversions and traffic. Having KPIs in place ought give you a handle of the dashboard’s general tone and trajectory. 3. Keep It Clean, Keep It Simple Variety for variety’s sake is categorically not the spice of dashboard design. Due in some part to their visual nature, designers have a tendency to ornament their dashboards with all sorts of visual distractions (for reference, check out this chamber of dashboard horrors). Instead, restrict the aesthetic bells and whistles. Fewer extraneous graphics place focus right where it belongs: on the content. For example, try to keep your color scheme simple: let green mean good and red bad. Adding in other colors like blue for improving, or orange for declining, quickly confuses things. Similarly be wary of piecharts! If the data falls in to a few simple categories, a pie chart can be effective. However, countless studies have testified to unreadability of the thinner pieces of a pie and their inability of communicate changes over time. 4. Make a story emerge! It isn’t good enough to make the information available. If you want your data visualizations to be comprehensible and lead to action and change, you need to help tell a data-driven story. Begin by asking how the data will be viewed: What story are you trying to tell? Which data supports that story, and illustrates it most clearly for the end user? Which specific data cluster is the user going to engage with most? For example, ensure that data is displayed in logical groups. If a dashboard includes both Financial KPIs and Sales Pipeline, make sure to position the financial data together, while the Sales Pipeline data is displayed together in a separate logical bundle. Similarly, the most important real estate on a dashboard – the top left hand corner – is typically earmarked for a company logo or a navigation tool. Given that most Western languages will read from top to bottom, left to right, that space should be a jumping-off point for most readers. It should be prioritized for critical data. 5. Put Perfectionism Aside Ultimately, all thoughts of a silver bullet dashboard are idealistic. No dashboard is going provide every possible answer in a single view to an evolving business. Trying to do so only ends in a knotted web of choices, alternatives, and options for the end user. Instead, it suffices that you know your users, you keep your data uncluttered, that your design is simple, and that you tell a story. With these four broad hallmarks of good data driven dashboard design, your developing business will be ready to generate relevant insights as it grows. Ready to build your dream business dashboard? Visible is the best way to tell the unique story around your company’s data, helping you keep everyone who matters to the business engaged in the business. With the ability to create multiple dashboards, you can get even more granular about who you are presenting data to. Raising a new round? Build a “Potential Investors” dashboard to highlight some of your most important growth metrics. Looking to lean on industry best practices? Build a dashboard using one of our pre-made templates from firms like Andreesen Horowitz and Version One Ventures. Start Your Free Trial

Learn How to Calculate Different Forms of MRR This post is part of our Most Valuable Metrics series, helping your company understand how to develop a holistic framework for tracking your performance and telling your story to everyone who matters to your business. You can find previous posts in the series here: Your Company’s Most Valuable Metric How to Calculate Lead Velocity Rate (LVR) Stealing the Right Growth Metrics for Your Startup How to Calculate Bookings What is your Investor Net Promoter Score? How to Calculate SaaS Churn How to Steal the Right Growth Metrics for Your Startup Like every SaaS business, consistent subscription revenue is vital to your success. That’s why knowing your Monthly Recurring Revenue, or MRR, is so important. MRR is a measurement of the total predictable revenue you expect to make on a monthly basis. Here’s a very simple example of MRR. You have three customers with the following subscription rates. Customer X pays $75/month Customer Y pays $50/month Customer Z pays $25/month Your total MRR is $75 + $50 + $25 = $150. Net MRR gives your company a holistic overview of revenue gained from new subscriptions and upsells/upgrades and revenue lost from downgrades and cancellations. MRR might not be part of GAAP (Generally Accepted Accounting Principles) or IFRS (International Financial Reporting Standards) but because of its importance in raising capital and gauging your sales and marketing success, it is crucial to understand and calculate correctly. Unintentionally misrepresenting your business to potential investors or developing your business plan on faulty data could spell disaster for your company. To start, when calculating your MRR, do not include the following. Full value of multi-month contracts: If you have quarterly, semi-annual, or annual contracts, normalize them to a monthly rate. Take the full subscription amount paid and divide it by the number of months in the contract. For example, your customer pays you $1,200 for an annual subscription. Dividing that by 12 gives you a monthly rate of $100 which you should use in your MRR calculation instead of $1,200. One-time payments: One-time payments are not recurring, so you shouldn’t include them in your MRR calculation. One-time payments are not the same as multi-month payments. Even though a customer is paying a lump sum payment for those months, you expect the customer to make another lump sum payment at the end of the subscription period. With one-time payments, you don’t expect the customer to make another subscription payment. Trialers: Until trial customers convert to being regular customers, don’t include their expected subscription values in your MRR calculation. Now that you know how to determine your MRR and understand what should be excluded, you can calculate your net MRR. Net MRR includes the following: New MRR: MRR from new customers Expansion MRR: MRR from gained from existing customers when they upgrade their subscriptions Churned MRR: MRR lost from existing customers when they downgrade or cancel their subscriptions So, the formula for calculating Net MRR is: Knowing the three elements of Net MRR is critical to understanding how your business is growing. Ideally your Expansion MRR should be greater than your Churned MRR each month. If it is, then you’re doing something right with your existing customers! Want to read more on Monthly Recurring Revenue and how it impacts your business as your grow? SaaS Metrics 2.0 – Detailed Definitions from Matrix Partners’ David Skok Why most SaaS startups should aim for negative MRR churn by Christoph Janz of Point Nine Capital SaaS Metrics for Fundraising from Intercom’s Bobby Pinero Diligence at Social + Capital: Accounting for Revenue Growth from Jonathan Hsu

This post is excerpted from our first book, The Ultimate Guide to Startup Data Distribution. You can download the book for free and learn more about how other top companies are building and operating high-impact data distribution systems to keep everyone that matters engaged in the their business. Check out the other parts if you haven’t already: Part 1. The Ultimate Guide to Startup Data Distribution Part 2. Your Company’s Most Valuable Metric Part 3. How to Find You Company’s Storytelling Framework Part 4. ‘Steal’ the Right Metrics for Your Company (Coming Soon) You can also find more on the topic of Startup Data Distribution here: The 3 Key Pillars of Startup Data Distribution – OpenView Labs How to Tell Your Company’s Story – Medium The way that a company tracks and analyzes the key performance indicators around its product development and distribution as well as its customers and employees is key in determining whether its data distribution system will be effective and yield long term positive results. It doesn’t matter how often a management team communicates with team members, investors and any other stakeholders if the communication isn’t actionable and relevant to what drives the success of the business. Blake Koriath, CFO at SaaS-focused seed fund High Alpha, likes to start wide when working with companies, focusing first on business model and company stage, then digging into exactly who will be viewing specific metrics and when. 1. Understand your Business Model The way that you finance your operation, build your product, serve your customers, and generate revenue will be the primary driver behind what metrics you track. As Alistair Croll, one of the authors of “Lean Analytics” wrote, online businesses tend to primarily fall under one of the following business models: He goes on to say that “no company belongs in just one bucket” as, for example, Amazon cares about “Transactional” KPIs when making sales on their site but looks to “Collaborative” KPIs when collecting product reviews. 2. Evaluate the stage of your business In working with thousands of investors and operators over the last few years at Visible, we have come to understand the impact a company’s stage has on what metrics it should be tracking and how it should be tracking them. Early stage teams may place more importance on things like cash in the bank and burn rate, hoping to extend the life of the business as they search for product/market fit and move from growth to scaling. Later stage companies, on the other hand, need to be much more qualitative in nature and understand how all of their different business units are contributing to their end goal as a business. 3. Determine who your intended audience is When bringing a product to market, customer personas play a major role in things like pricing, messaging and feature set. When distributing key information about the performance of your business, stakeholder personas help inform which subset of metrics you present as well as when and how you present them. Investors, according to High Alpha CFO Blake Koriath, are often interested in the highest level metrics, enough information to quickly understand general trends in the business and also understand where they can have the most impact. Overall Gross Margin, MRR Added and LTV are examples of metrics SaaS investors may be interested in seeing. Executive team members fall next in the hierarchy and need to understand how the success of their team is contributing to the overall direction of the business (for example, Lead Velocity Rate for a a Sales Manager). Finally, team members are likely interested in the “atomic units” of those higher-level metrics. That is to say, how are their individual contributions bubbling up to impact the metrics that determine success for their teams? Getting the right information to the right people at the right time is essential in telling the story around your company’s data. By focusing on targeted stakeholder personas, you can ensure that each group is empowered with the information they need to contribute most effectively to the growth of the organization.

This post is excerpted from our first book, The Ultimate Guide to Startup Data Distribution. You can download the book for free and learn more about how other top companies are building and operating high-impact data distribution systems to keep everyone that matters engaged in the their business. Check out the other parts if you haven’t already: Part 1. The Ultimate Guide to Startup Data Distribution Part 2. Your Company’s Most Valuable Metric Part 3. How to Find Your Company’s Storytelling Framework Part 4. ‘Steal’ the Right Metrics for Your Company (Coming Soon) You can also find more on the topic of Startup Data Distribution here: The 3 Key Pillars of Startup Data Distribution – OpenView Labs How to Tell Your Company’s Story – Medium To use a line from David Skok (the Godfather of SaaS metrics), “good metrics should be actionable and drive successful behavior.” To accomplish this, you first need to determine the end definition of “success” for your company. Since the mix of factors leading up to this point (Business Model + Stage + Audience), as well as the overall goals of every company, are different, there is no one size fits all approach to selecting your MVM. The primary reason to have a single, holistic metric for your business is to cut out the noise that comes with trying to track (and take action on) everything so that you can hone in on the one thing that drives your success. Read any startup post-mortem and you’ll quickly realize the negative impact that lack of focus can have on a company. As you will see in the illustrations below, even growth stage and public companies often have a single MVM that they aspire to grow each period. In many cases, like with Airbnb or Meetup, the same MVM has been a guiding beacon since the early days. Our Most Valuable Metric At Visible, the metric most tied to our “success”, our MVM, is the number of companies we have actively using the platform on a monthly basis. The progress that we make on this metric helps us understand the performance of each one of our teams and can help us identify parts of the business bottlenecking our growth. First of all, it gives us a good idea of how many people are coming in to the top of the funnel through different inbound and outbound channels then lets us know if our product is effective at “activating” those companies. Then, if a company is coming back to Visible each month to track and distribute their performance data, they are more likely to be inviting their investors, advisors and team members. As more companies in an investor’s portfolio begin sharing updates and metrics, the investor is more likely to become a paying customer. Similarly, team adoption within an organization grows as companies invite more employees. In addition, since so many of the companies on Visible are what would be considered early or growth stage businesses, their continued expansion will bring new stakeholders into the fray, adding to the number of people who rely on us for the organization of their most crucial business data. Related resource: Lead Velocity Rate: A Key Metric in the Startup Landscape Early Stage Most Valuable Metrics To give you some inspiration and help get you started, we’ve compiled a list of Most Valuable Metrics for top companies across a number of different stages and business models. Whether you are interested in SaaS metrics like MRR (Buffer) or something a little less common, like Product Hunt’s “Product Page Visits,” you can do it on Visible. Growth Stage Most Valuable Metrics Even growth stage companies often have a single metric that everyone in the business – sales, product, customer success – focuses on growing each period. A holistic measurement of where the business is heading helps you tell your story more effectively and understand which supporting metrics are having the most impact on your growth. Next Steps Need help understanding what Most Valuable Metric is right for your business? We’ve created a series of posts that take a deep dive into some metrics that top startup companies are using to gain insight into their businesses. Lead Velocity Rate (SaaS Metrics) Bookings (SaaS Metrics) Net Promoter Score How to calculate churn rate (SaaS Metrics) We will continue adding to this list each week so feel free to get in touch with any metrics you would like to learn more about.

Our First Time on Product Hunt Back in the beginning days of 2014 Ryan Hoover shot me an email asking me to do an AMA on ProductHunt –at the time I still think it was a side project. (I’m user 1,077 #humblebrag) I’m a sucker for product and community so was happy to help out. Also file Ryan’s email under things that don’t scale and how to build a community. We launched Visible 1.0 on Product Hunt January 3, 2014, you can see the post and AMA here. The post got 93 upvotes I think we were near the top but honestly can’t recall. We got some nice inbound from the post, definitely our largest day of traffic for Visible to that point. I don’t have any hard data on signups but do have the old app and marketing site Google Analytics profile. Fast forward 593 Days. Our Visible 2.0 release was featured on Product Hunt (find it here). We got 290 upvotes, finished 10th overall (the top hunt had 963 votes for reference) and we got 67 companies to sign up and become active on Visible. That number is impressive because we have a high barrier for a company to become active on Visible. The day we were featured also ended up being our highest trafficked day in our marketing site’s history. Product Hunt referrals ended up over 235% from the first feature 593 days ago. Other Notes: While I’m incredibly impressed by the traffic and growth Product Hunt sent and the growth of the community, I thought the number was a little low. There are some factors like us not being in the Top 3, we didn’t heavily market it, etc. However, after some quick digging I remembered that Product Hunt used to directly send you to a Hunt URL. This is represented as a “/” in the Referral Path in GA. Today it takes an additional click on the “Get it” to get to a hunt. This totally makes as they want you to stay in the PH community, engage, etc. I’d be curious what would happen if they still directly sent you to the site! Feel free to email me any questions about launching on Product Hunt. Up & To the Right! Mike

This post is excerpted from our first book, The Ultimate Guide to Startup Data Distribution. You can download the book for free and learn more about how other top companies are building and operating high-impact data distribution systems to keep everyone that matters engaged in the their business. Check out the other parts if you haven’t already: Part 1. The Ultimate Guide to Startup Data Distribution Part 2. Your Company’s Most Valuable Metric Part 3. How to Find Your Company’s Storytelling Framework Part 4. ‘Steal’ the Right Metrics for Your Company (Coming Soon) You can also find more on the topic of Startup Data Distribution here: The 3 Key Pillars of Startup Data Distribtion – OpenView Labs How to Tell Your Company’s Story – Medium How do you tell your company’s story? Being able to effectively tell your company’s story has never been more important. As a company grows, it acquires more stakeholders – employees, investors, advisors – who need to remain engaged in the business in order to play their role most effectively. When those different stakeholders are empowered with the right information, it leads to better communication between teams, more introductions from investors to potential customers or employees and an overall culture of transparency that endows a feeling of ownership that stretches beyond what shows up on a cap table. What is Data Distribution? Data Distribution describes the systems and processes a company has for gathering key performance metrics and getting them to the right people at the right time in order to support the company’s growth. How your company builds your specific data distribution philosophy centers around how you want to tell your company’s story and who you want to tell that story to. In short, Data Distribution is how well your company turns this… Into this… Why is Data Distribution Important? Taking a company from its first round of funding to ultimate success (define that how you will) is no easy task. Companies fail for a number of different reasons and one of the more inexcusable is a breakdown in communication between founding teams, CEOs and investors, or leaders of different teams within in organization. Building a solid process for your company’s Data Distribution means professionalizing the way that you approach communication to your stakeholders. There is a responsibility that comes with deploying capital for others (often millions of dollars) and employing people (often dozens) to help build your vision. Marc Andreessen touched on this responsibility in a recent interview with Fortune’s Dan Primack. How can I implement Data Distribution at my company? The way that a company tracks and analyzes the key performance indicators around its product development and distribution as well as its customers and employees is key in determining whether its data distribution system will be effective and yield long term positive results. Blake Koriath, CFO at SaaS-focused seed fund High Alpha, likes to start wide when working with companies, focusing first on business model and company stage, then digging into exactly who will be viewing specific metrics and when. Once you understand this and are committed to the idea of building out a data gathering system, your next step is to actually select the full set of metrics that make sense for your company. This is where things can get complicated, as there are hundreds of metrics to choose from as well as different time frames to consider and different ways of calculating certain metrics. Additionally, the amount of data produced in a growing technology company can be overwhelming for teams and founders. Luckily, many thorough frameworks – crafted through years of experience by top investors and founders – already exist and can give you a great baseline to work from, no matter your business model or stage (we dive in depth into many of them in the book). Remember, as Pablo Picasso whose paintings even most VCs can’t afford is credited with saying, “great artists steal.” Many thanks to Nick Podraza for the awesome image. Check out more of his stuff here. Where can I learn more about Data Distribution? We thought you might ask. To start, you can download The Ultimate Guide to Startup Data Distribution, the first book we’ve ever published here at Visible. The book contains 40 pages of tactical insight to help you and your team tell the story around your key performance data more effectively. Get the Book for Free After you’ve read the book, get in touch! We’d love not only your feedback but also to spend 10 or 15 minutes on the phone sharing some of our learnings and helping your company get set up with an effective Data Distribution process. Shoot us an email and we’ll get back to you asap to get something set up!

You will hear it from almost every developer: “I could do it better (and faster)”. Refactoring or rewriting an application is developer porn. You explore new technologies, update your stack, redefine the architecture… all these excite our reptilian brains. So great, let’s rewrite the application! But wait… we are still trying to nail our product/market fit, we are still growing the company, we have a legacy application running, we have a customer expecting updates… are we really doing this? Owning the code base The Visible 1.0 code base was over 1.5 years old and had been written and maintained by different contract developers to build the prototype while we searched for product/market fit. The code was ok, it worked, but none of the contractors were full time employees of the company. We faced a big challenge of building an engineering team of 3 or 4 people that owns the codebase just as we started to get validation that we were on to something. Our team was aware and knowledgeable of the technical decisions that were made in Visible 1.0 but there was very little documentation; as to be expected in an MVP. Whether we would have started from scratch or tried to improve the existing code, we needed to know the entire code base through and through to onboard new team members. Additionally, it is definitely easier to document and know the code you write than the code you read. And it is true for every recruit, so the gain here is multiplied by the size of the team. Rewrite 1 – Reuse 0 Running the business This was the biggest concern surrounding a rewrite, no question. How could we run the business during the rewrite when we have customers relying on the existing version? It was out of the question for the engineering team to support the old version while creating the new one. It would have meant twice as much work and supporting two versions is never fun. As a result of this decision, the company would be effectively split in two, the business team would keep working with the legacy software (supporting existing users, getting new ones) and the product team would develop the next version. Having two separate teams isn’t ideal when you are trying to build a united company! We actually underestimated the impact it can have on both the morale of the business team, waiting on the next version and on the engineering team, whose stress level keeps growing as time goes. Rewrite 1 – Reuse 1 Managing expectations “When a developer gives you an estimate, multiply it by 2 or 3.” You are really putting the entire business in a sort of limbo out of which you hope to get out as soon as possible. There is always the battle between unrealistic deadlines and overly conservative ones. Everyone wants to release as soon as possible but a rewrite will always include unexpected bugs and problems. The schedule will slip and the more it does the more the tension builds. I can’t stress how much a full rewrite is a gamble and you must take that into consideration. Ask yourself, what if the 3 months become 6? 7? 8? It is an expensive decision for an early stage company, make sure to consider the worst case scenarios! Rewrite 1 – Reuse 2 Investing in the future The last thing we wanted to do was go through this process in the next 3+ years (hopefully ever). We took a particular care building a strong technology stack. Stay tuned for more technical posts but the main idea is that we now have a separate Ruby API and a Ember web client. It will allow for a lot more flexibility in the future. E.g. opening the API to our users, native mobile apps, etc. It’s documented, tested and fun to work in… All of which are important when scaling a tech team, product and company. This is an investment in the future with returns that will hopefully compound in the future. If you do not tackle technical debt as you go, it will backfire. And since Visible 1.0 was built as an MVP, always evolving and changing in different directions, had a lot of it. We estimated that if we rewrote the code base, with a strong attention on limiting the code debt, we would be at least twice as productive within 12 months. It is impressive what a good technology stack can do to morale and productivity! Rewrite 2 – Reuse 2 Innovate, don’t duplicate. We didn’t duplicate the old Visible and just change out the engine. We rethought Visible from the ground up based on all of the feedback from current users, potential ones and where we see the product going. It means that Visible is now at least twice the product it once was, it has an entirely new interface and we doubled down on functionality of our most used features. A good part of the past 6 months was actually spent on changing the core architecture; for instance to allow metrics for quarterly (or any frequency) metrics! You can read about the new features in our release article. Rewrite 3 – Reuse 2 Conclusion Looking back, it was the right decision to rewrite Visible. It took a lot longer than we first estimated, it was a lot more work and stress than we expected but we pulled it off as a team. We got a lot of great feedback, both positive and negative and are already back at work to improve the product and fix the bugs. And the good news is that you will no longer have to wait month before getting them.

How to Determine if You Should Send Investor Updates So you just raised your first round of funding. Or closed your first big customer. Or launched your product. Congrats! Now what? Well, if you are like us and like thousands of other early and growth stage companies, it is probably time for you to start thinking about your process for getting the right information to the right people at the right time. With the amount of data you have coming in from your customers, your tools and your employees, it can be a bit overwhelming so having a clear understanding of the benefits of implementing a repeatable process can be a great place to start. Related Reading: How To Write the Perfect Investor Update (Tips and Templates) Luckily for you, we built a little guide to help you understand the importance of stakeholder engagement, namely investor updates. Consider it a choose-your-own-adventure guide for the modern founder. If you would like, you can download PDF right here. Want to read more about keeping the people that matter to your business engaged and informed? Here are a few great places to start: The Visible Reading List – Our curated collection of the best content from top investors and entrepreneurs about the how and why of stakeholder engagement Why Update Your Investors? – Some ideas on what you should track and how you should track it Is Radical Transparency the Way Forward for Startup Marketing? – Transparency plays a big role in keeping your stakeholders engaged.