Metrics are the key to success of any venture. They tell you if you’re succeeding and they tell you if you’re failing. If you’re not sure where you stand, then you’ve just been tracking the wrong metrics. In an age of cheap spreadsheet software and endless documentation on what your business should measure, you have no excuse not to check metrics.
Everything measured is something you can change. Everything ignored is something you can’t change.
Everyone knows the metrics a smart startup measures because they’re obvious; profit, conversions, traffic, funnel flow, etc. These are surely important things to measure – if not the most important – but what are you forgetting to look at? What metrics should you be capturing that you’re not?
1. Staff Turnover
Turnover is how fast people leave your company. It’s a pretty simple thing to calculate. How many people leave over time as a percent of your company? You can do it in a spreadsheet with a few formulas and measure it by year, quarter, month, or week (though if it’s by week, you’re in trouble).
Turnover tells you:
- How fast people are leaving.
- What areas people are leaving from (important if you wake up with half your programming staff).
- Anything else you want to relate the data to. For example, time of year.
- Are you losing anyone that takes time to replace (replacing a critical person consumes a lot of resources and sanity)?
Why measure turnover? After all, startups are notorious for a strange mixture of insane turnover and people staying no matter what. Turnover just seems to happen to other people.
You need to follow turnover because…
- it can be a warning sign. Thinking you can just “know” if there’s a problem isn’t enough, especially in the crazy life of a startup.
- it can guide your hiring and firing policies. If you don’t know where people are leaving, you don’t know who to hire.
- it can be a sign of stability. Maybe your turnover is pretty low. Having the stats can calm anyone worried about a couple losses.
2. Knowledge: Skillsets, Education, and Certification
How many of your programmers know iOS? Who speaks Japanese fluently on your sales team? Who can DJ?
Startups keep track of these things in their heads for the most part, but once you get beyond a small group (about seven), you need to track interesting skill-sets and certifications to see your team can fill a void. A great example is with one of the startups we were working with who needed their website translated to French. We were busy trying to find a decent translation service to help us out, but little did we realize that one of the new interns was fluent in French and English. She quickly took on the task and had it translated in no time. This made the job easier, cheaper and way quicker than having to hire outside help.
So why do this? Also, why do it outside of your head?
- You ask the question of who knows what. I’m betting you haven’t sat down and asked who knows what in a while. Your team could have skills you didn’t even know about.
- You can deal with any turnover (above) easier since you know exactly what you lost.
- You can find any skill gaps that you need to remediate. That usually happens when you first do a knowledge inventory.
- You have a marketing pitch. For example, all of your engineers have a CS degree – that’s a sales tool.
- You can stop worrying about it.
3. Support Time
Support is an inevitable part of any company, even if some of us hate it with the passion of a thousand burning suns. You fix what you build and you have people fielding calls, heading off social media firestorms, and running general interference. You don’t like it, but you do it.
Every minute someone spends fixing something, answering an email or forwarding a nasty tweet is time you could be using to make money. So you measure it, you figure what percent of time is spent on support and how it changes.
- It tells you who is spending time on support and how much of their time is being spent. That lone engineer who’s doing 90% of your support will appreciate it.
- It tells you how support changes. If at the end of every month support time goes up, maybe you ought to look into that.
- It tells you where problems are. If your marketing people spend more time answering angry calls than your engineers spend fixing broken websites, you may have an issue.
- If it’s good, you’ve got bragging rights.
A spreadsheet, a little time and some thought is all you need to capture these critical metrics. With them, you can avoid a lot of problems and have a few edges to average.