Every technology startup wants to grow and move into that golden scale-up phase. It’s seen as the ultimate goal for small businesses, the stepping stone before a huge investment, or the moment before you conquer the world.
And that is why measuring growth is important. Without measurements, without tracking those core KPIs, it’s impossible to truly understand whether you are moving forwards or backwards.
Growth can be simple. Many businesses look first at some basic financials: are we growing sales? Is more money coming in this year compared to last year? Do we still cover our overheads at the same percentages? Have we secured the investment we wanted to?
But growth can also be complex. There are many other metrics that are not the obvious financial offering, and although they may not follow an easy to recognise pattern in the short term, tracking some other types of measurements can really help your technology scale-up to move up to the next level.
Here are some of the measurements that we recommend technology companies who want to grow start to look at more closely.
Bigger is not always better, but a steadily increasing headcount usually does suggest that you are doing something right. Having so much business that you need to increase your teams demonstrates a positive growth element, and choosing to invest in additional departments – whether it’s finance, HR, or internal IT – gives a nod of confidence to investors that you are in it for the long haul.
This is the mirror metric for headcount, and it tracks how quickly people leave the business. Having a high headcount doesn’t mean anything if your staff are only staying with the business, on average, for three months. Understanding how quickly you are losing staff can focus your retention strategy and help create a better working environment. Which leads to…
Working in a start-up within any industry can be stressful. You are a naturally disrupting, often pivoting speedily, and that can create a pressurised environment for your team. By conducting a yearly or biannual ‘Happiness survey’ (preferably one that is anonymous) gives your employees the chance to safely express any concerns or make recommendations to improve their happiness at work. After all, studies have shown that happier individuals directly contribute to better financials – and are 12% more productive.
2019 was the year when climate change finally started receiving the focus that it deserves in mainstream media, and that has led to a drastic change in the way that businesses understand the impact they are having on the environment. If you don’t know the carbon your business is adding to the planet, you need to find out – and then do something about it. You can choose to plant trees, go paperless, change energy usage, or even pay to directly offset your business carbon.
Word of mouth
How do you generate new business? With the plethora of different options online, it’s easy to miss what should be one of the easiest: word of mouth. Take a look at the new clients you landed in the last six months. How many of them were from a personal recommendation? If the answer is none, you need to start looking at your customer care to understand why your current customers aren’t recommending you in their industry. By activating word of mouth in your favour, you’ll definitely see an uptick in the growth of your client list.
Excitement on Monday morning
Okay, we’ll give you this one: this growth measurement is a little less tangible. But we challenge you, every Monday morning, to write down a number from 0-10 of how excited people seem about being in the office today. Don’t tell anyone else you are doing this. After three months, take a look at the numbers. Are they high? Low? Getting higher? Lower? Staying the same? Now think about your own personal numbers. Would they be high? Low? The energy and passion (or lack of it) from the founder is going to have a direct impact on your staff.
Every start-up will have their own KPIs and own way of measuring things that are tied to your business goals. The question is, are you missing out on some different ways to understand how your business is developing? I challenge you to think about some new growth measurements that you can start to introduce into your technology scale-up so you can understand positive growth differently.
Disagree with me? Email Emily now!