Which metrics should startups showcase?

When it comes to showcasing the performance of a startup, presentations often leave a lot to be desired. In many cases, company decks may only highlight a few key metrics such as number of users, total downloads, or awards won. This can be disappointing, especially considering that some startups have raised significant amounts of financing and should be able to provide a more comprehensive view of their traction. In this column I have come up with a sort of a hierarchy of information from the most to the least appealing to investors.

At the top of the hierarchy is cash profits. Companies and startups with good cash profits should report them, as they are the most straightforward and tangible indication of a company's financial performance. However, not all companies may have good cash profits. In such cases, the next level of information to report on is adjusted profits. This metric takes into account various factors that may impact a company's financial performance and gives a more comprehensive view of its financial health.

Next, gross profits. This metric provides information on the amount of revenue that remains after accounting for the cost of goods sold. Gross profits can give investors and stakeholders a sense of the company's profitability, and its ability to generate income.

Revenue is the next level in the hierarchy, and it should be reported if a company does not have good gross profits. Revenues are the total amount of money generated by products or services. However, it is important to note that revenue does not necessarily reflect the overall financial health of a company, as expenses and other costs may impact its profitability.

For companies that do not have good revenue, they should report on adjusted revenue indicators. One such indicator is Gross Merchandise Value (GMV), which measures the total value of goods sold on a company's platform. GMV can provide valuable insights into the performance of a company's core business operations and the growth of its customer base.

Next, Monthly Active Users (MAUs). This metric provides information on the number of unique users who interact with a startup's platform or services over a given period of time. MAUs can be a key indicator of a company's reach and customer engagement.

Subscribers are another metric that companies can report on if they do not have good MAUs. Subscribers are a key indicator of customer loyalty and the value that a company is able to provide to its customers.

Downloads is another metric that can be reported if a company does not have good subscribers. Downloads can indicate the popularity of a company's offerings and its ability to generate interest among its target audience. But often downloads do not reflect real users.

Website’s page views is the final metric in the hierarchy and should only be reported if a startup does not have any of the above. Page views can indicate the level of engagement that a company's customers have with its platform or services.

It is important to remember that they are only part of the picture. Companies may also want to highlight awards or recognitions they have received, such as being voted “Best Pitch” in its category. These awards can provide valuable insights into a company's culture, reputation, and overall appeal to employees, customers, and investors.