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We want to launch in the april of this year our SaaS product and in the mid may, we have a conference to attent to pitch for some investors. Which metrics and objectives we have to achieve, considering the fact that we want to offer a one month trial?

  • SS

    Saulo Segurado

    almost 4 years ago #

    Hey Vlad!

    Great question.

    In the words of Brian Balfour:

    GOAL

    The one and only goal should be to find product-market fit among some audience segment. Part of this is understanding how large that audience segment is to make sure you can build a compelling business.

    METRIC

    Plain and simple your eye should be on retention. If your product does not retain users, there is no point in growing the top of the funnel. Here are the retention signals you should be looking for.

  • EV

    Egri Viktor

    almost 4 years ago #

    I think these are the most important metrics at this stage:

    Growth of trial users (you can show growth in the number of trial users month by month)
    Growth of conversion rates from free trial to paying customers (how many leads can you convert in to paying customers and can you show a growth in it as well?)
    What did you learn? (Not a metric but it's very powerfull if you can show investors that you are on a learning curve and inputs are coming straight from the market.)
    Do you have any type of strategy to create referral? (it's not a metric again but if you have a concept how your business will go viral is an advantage in my opinion)

    I rekon the most important thing is to show them that you are prepared to learn from your prospects and customers and your product has potential (good team, flexibility, ability to improve fast, able to pivot, etc.)

    I hope i could help. Other ideas? :)

    • VC

      Vlad Calus

      almost 4 years ago #

      Ok, but how to measure the growth in the first month? Like, for every week? Because our team understands that if we launch, we (hope to) growth our users exponentially in the first couple of days. But then, the growth will decrease, it won't be logic to say that growth of trial users is in minus(-).

      • EV

        Egri Viktor

        almost 4 years ago #

        Hm, I understand the problem.
        Well, I suggest to set up a goal based on secondary researches (benchmarks) or just give the investors a logical route for your goals. Let's say you want to have 5-10 trial users and 1-2 paying customer by the end of the month after you launched. During this month you have this goal in mind. You collect your early adopters, it gives you some kind of traction and you manage to reach this goal.

        This is growth. For early stage startups I think usually investors looking for great teams who want to learn fast. Maybe you can point out some weaknesses that should be improved - this is the result of the experiment your run during the first month. Even if you can't reach your goal, you have to prove that you are able to learn.

        Maybe - if you haven't read it yet - it could be good if you could read the "The Lean Startup" from Eric Ries. He says that startups run experiments and the faster they can learn and pivot (if necessary) the faster they will know which path they should follow and be successfull. I think if you can show this ability to investors, you will have much higher chance to convince them. So basically metrics are not "objective" at this stage I think. I mean you don't have data, you don't have any relatively "objective" measure. You prove that you think, and you are able to think from the perspective of your possible customers.

        I know this explanation is a little bit foggy... Sorry for that. But I suggest to set up your goals for the first month, try to reach them. then show investors the results or where you are exactly with some kind of explanation for it. These will be your assumptions that can be check by lean customer development (You can read it in the book: "Lean Customer Development" by Cindy Alvarez)

        I hope I could give you an actionable answer.

  • SH

    Sam Ho

    almost 4 years ago #

    Agree with @viktoregri and @saulosegurado about retention.

    At this point, if you are talking single digit "growth" probably doesn't mean much, but what is interesting is your retention from free trial to a paying customer.

    With a limited amount of time, it's really about the product market fit with those first customers (and even beforehand, gathering as much customer development data as possible).

  • HQ

    Hila Qu

    over 3 years ago #

    This is such a valuable discussion. From my perspective, for a SaaS product in beta, all the users are on unlimited free trial, what you should really focus on are to understand user's "natural" engagement level:
    - How many users are active daily, weekly, monthly
    - Cohort analysis: how many % of users are still active after 1 week, 2 week, etc. Plus, how cohort is changing over time.
    - Observe by data: which features they are using, which they are not using
    - Talk with users: get quantitative feedback

    From this, you can begin to understand your customers and product better

  • AS

    Arsalan Sajid

    9 months ago #

    You definitely need to take care of the number of metrics, not a one.

    Be obsesses about Marketing metrics. Marketing is the key to growing a SaaS company. Marketing must help attract and convert prospects into paying customers.

    -Monthly Unique Visitors
    -Signups
    -Organic vs. Paid Traffic Rate

    Be obsesses about Sales scaling metrics. Modern SaaS companies should keep their cost of sales as low as possible.

    -Conversion Rate to Customer
    -Average Revenue per User
    -Customer Acquisition Cost
    -Monthly Recurring Revenue

    Be obsesses about Customers retention metrics. Acquiring a new customer is 4-10 times harder than retaining an existing one. And Customer Success is all about retaining existing customers.

    Average First Response Time
    Average Resolution Time
    Active Users
    Customer Lifetime Value

    You may be concerned about pulling all the dispersed data quickly in one place for regular analytics work, I would recommend you to consult a professional team for CRM development. We at Cloudways have also written a post about important digital marketing metrics to measure. you can check it out here https://www.cloudways.com/blog/saas-metrics/

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