Four Desirable KPIs For Startup To Scale To IPO
If you understand your own startup or company, you can give it the direction you want to.
Opinions expressed by Entrepreneur contributors are their own.
You're reading Entrepreneur India, an international franchise of Entrepreneur Media.
Often, when I speak to advisors and startups, the discussion around a company is too random -- we talk about clients, team, funding, branding…. Everything, except ways to look at your company for better clarity within yourself. After all, if you understand your own startup or company, you can give it the direction you want to, and when you grow the numbers, it make easier to explain to others about your company.
Here are the four channels of growth:
- Stakeholders desiring to invest in you;
- Customers desiring to hire you;
- People (HR) desiring to work with you;
- Society desiring to support you.
Different companies need different weightage in different phases of their company; a infrastructure heavy company will need the stakeholders desire more since it needs heavy investment, while a service company will need HR desiring to join you and customers desiring to hire you.
Making it work:
Now look at each channel separately and make it stronger. For a digital product company, an investor will look at a great tech team, a large enough global problem to solve, and some other risk factor. As a startup, you need to keep improving each channel of growth. It's not about you reaching out to more people, it's about how many more people desire to work with you, their conversion ratio and quality.
As a service company, have you started getting more seniors attracted to your company? At Techshu, for instance, we consider it a different campaign altogether. We get 120 to 180 leads every month, and 100s of CVs every month.
The scale is improving, and what is even more important is the quality -- the quality of clients, and human resource. Six years ago, we would go to people; after two years, startups coming to us, another two years later, SMEs started approaching us. Now, from startups and SMEs, to large million-dollar and billion-dollar companies want to work with us.
The balancing act:
Some companies get people who want to work with them because of the founder's knowledge but not enough clients to support cash flow. Some get cash flows but not enough great people to work with who can produce good quality. At times, there aren't enough stakeholders to finance the company, which leads to companies dying. As you grow, you need to keep the society desirability as a significant factor for goodwill, a core part of branding.
To summarize, you start your companies scale by looking at all the channels that are important for you and putting a target to be desirable and improve the pipeline quality. That's when you reduce your cost of acquisition and increase the premium, which impacts your bottom line.
(As told to Prerna Raturi)