Yesterday, we had a discussion about OMTM (One Metric that matters) with Chase of GoSkip. There is lots of information about how to chose the metric that matters, and also enough about why it is important. The missing part is how do you choose the metric depending on the stage of your company, the industry you are in and the way to make sure the metric matters to your employees, customers and investors.
It is fairly easy to say that you need to focus on growth – which is fairly obvious, but the question becomes grow what? Users? Revenue? Shares? Likes? Churn?
Picking an arbitrary metric wont hurt you in the short term, but it will not get you to the point of moving your startup forward.
The OMTM changes by stage of the company – from idea stage to prototype and to MVP and PMF. In fact, you will be tempted to put one metric for each part of your organization – engineering, sales, funding etc. – I suggest you dont. It completely defeats the purpose of the OMTM.
There are 3 criteria you need to consider when coming up with your OMTM.
1. The direct impact of that metric to the monetization or valuation of your business – depending on how you intend to eventually monetize, you want to make sure the metric is very closely aligned with that number.
2. The validity of that metric for the duration (time period for which it will be valid). If you come up with a metric that’s going to be valid for less than your next major milestone, I would reconsider it.
3. The ability for anyone in your startup to action based on that metric. If you end up putting a metric together that most people cannot take a direct action within their span of work, you end up not having the metric be meaningful to most of your employees.