How to Measure Growth When You Have Nothing to Measure
As I see it, startups must always think about growth, even when you have nothing more than an idea.
What does growth mean during the idea stage? It means that each day you do more than the previous day. You go from talking to one person about your idea to speaking with ten people, from working on your side-project for an hour one week to seven hours the following week.
Build your startup with a GROWTH mentality from day one.
How does having a growth mentality help in the long run?
When you focus on growth from an early stage, you focus on the important cycle of executing and improving. Standing back and measuring your efforts from day one helps you become more aware of your startup’s critical lifecycle benchmarks, such as establishing your value proposition and determining your product-market fit.
Let’s take a familiar example: customer profiling with cold “calls” (in this case we’re talking about LinkedIn messages and emails). It’s relatively easy to send a one-off email or a LinkedIn message to start a conversation. It’s much more challenging – and REWARDING – to write and optimize the message that actually converts your efforts into a face-to-face meeting.
S0 what do you measure in this scenario?
First, record the number of potential customers/contacts you approach. Second, record the number that have accepted your invitation to meet. Keep in mind your mission is to identify the winning value proposition in your email and to determine the market need, or in this case, how many responded favorably to your proposition.
By measuring something so simple as the number of meetings created by a cold email you can find out: 1) do your prospects understand your product or service, 2) are they your best market, and 3) are you solving their pain?
Don’t stop when you have optimized the process of converting a cold email to a meeting. Next, measure and improve the meetings that convert to a follow-up meeting (what did you do differently or better?), or to a sales pitch (how did your prospects respond to your messaging?), or to a sale (how long did it take to go from prospect to customer?).
Knowing your value proposition and how to solve your customers’ pain is the key to product-market fit. With a focus on executing and improving, you will eventually discover and optimize the efforts that lead to paying customers.
And remember, even though your ultimate goal is to build a scalable business, sometimes you must do things that don’t scale in order to get there. (http://paulgraham.com/ds.html).
Let’s look at another example: getting from click to conversion. Whether you’re B2B, B2C or selling to the government, you need to continually improve your messaging in order to cut through the clutter. Your messaging is an important part of your value proposition.
Start with a few text ads that have different wording and calls to action. Measure the CTR, how many people clicked on each ad. You don’t need a landing page to know which messaging attracts more eyes to your website.
Next, measure which ads lead to signups and subscriptions. Then, work on improving your landing pages for those ads and compare which page creates more users. Continue tracking the conversion in your site funnel.
By adopting a growth mentality, and by focusing on continuous improvement on a weekly basis, you will have a better understanding of your market, your positioning, your pitch, and the pain/problem you are solving.
TL:DR – Focus on executing, measuring, and growth to discover a winning value proposition for your early stage startup.