Key Performance Indicators
Jean Roberson
Key Performance Indicators
KPIs evaluate the success of an organization or of a particular activity in which it engages.
Often success is simply the repeated, periodic achievement of some levels of operational
goal (e.g. zero defects, 10/10 customer satisfaction, etc.), and sometimes success is
defined in terms of making progress toward strategic goals
Key Performance Indicators
•Quantitative indicators that can be presented with a number.
•Qualitative indicators that can't be presented as a number.
•Leading indicators that can predict the outcome of a process
•Lagging indicators that present the success or failure post hoc
•Input indicators that measure the amount of resources consumed during the generation of the
outcome
•Process indicators that represent the efficiency or the productivity of the process
•Output indicators that reflect the outcome or results of the process activities
•Practical indicators that interface with existing company processes.
•Directional indicators specifying whether or not an organization is getting better.
•Actionable indicators are sufficiently in an organization's control to effect change.
•Financial indicators used in performance measurement and when looking at an operating index.
What really matters??
“If you don’t have revenue you are not an entrepreneur”
Revenue and Sales Metrics
Historical Performance
• Contracts
• Revenue
• Customers
• Monthly recurring revenue (MRR)
• Annual recurring revenue (ARR)
• Revenue per customer
• Lifetime Value (LTV)
• Churn
What really matters??
“If you don’t have revenue you are not an entrepreneur”
Revenue and Sales Metrics
Predictive
• Marketing Qualified Leads(MQL)
• Sales Qualified Leads(MQL)
• Trials
• Conversion Rates
• Pipeline
• Churn
• Month over month growth
• Increased or decreased revenue per customer
What really matters??
“If you don’t have revenue you are not an entrepreneur”
Revenue and Sales Metrics
Customer Health
• Trouble tickets
• Time to response
• Customer satisfaction
• Returns
• Renewals
• Cancellations
• Product usage or activity
What really matters??
“Never run out of cash”
Financial
• Burn Rate – how much cash are you burning each month – cash
from customers less cash expenses
• Months of burn – how many months before you run out of cash?
• Revenue
• Growth rates
• Market share
• Margin
• Cash flow breakeven – when do you stop burning cash?
What really matters??
“Don’t let great get in the way of good”
Product
•
•
•
•
•
•
•
Milestones Achieved
Product Roadmap
Release Schedule
Minimal Viable Product (MVP)
Customer input
What will customers pay?
How much will it cost to produce?
How to present??
“Don’t let great get in the way of good”
Total ARR by Quarter
1000000
900000
800000
700000
600000
500000
400000
300000
200000
100000
0
Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 *Q4 16*
3 Year Contracts
2 Year Contracts
1 Year Contracts
* = Projections
$50,000
MRR Growth
$45,000
15% average month over month MRR growth
110% growth in MRR since October of 2015
120%
$40,000
100%
100%
95%
91%
$35,000
80%
77%
$30,000
64%
$25,000
60%
55%
$20,000
45%
40%
$15,000
32%
$10,000
20%
$5,000
$-
0%
31-Oct
0%
30-Nov
31-Dec
3 Year Contracts
31-Jan
2 Year Contracts
28-Feb
31-Mar
1 Year Contracts
30-Apr
% Growth from October
31-May
30-Jun
Key Metrics – MRR – Customers – Cash Burn
2017*
MRR (000’s)
2016*
Q1 16
Q2 16
Q3 16*
Q4 16*
360
440
500
650
New MRR (000’s)
60
90
60
150
% Growth in MRR
17%
23%
10%
32%
MRR Churn
(0%)
(2%)
(2%)
(2%)
50
59
64
80
Average MRR/Customer
7330
7450
7500
8000
Net Cash Burn
(220)
(100)
(200)
(200)
Enterprise Customers
• *= Projections,
• Contracts are billed annually in advance
•