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Believe it or not, the South East of England is the UK's sunniest region, and it produces some of the finest wines in the world.
FounderMetrics: a podcast by Vestd. Join Ifty Nasir as he uncovers the factors that forge success and those that spell disaster.
As the first series of FounderMetrics comes to an end, we wanted to put all of the juicy details in one place. If you’re looking for a deep dive into the business metrics that define success and to learn from the best, read on.
Here's the best of FounderMetrics (so far) - keen insights, key metrics and top tips as shared by our incredible guests.
Long before Dragon’s Den, Piers Linney built up a wealth of experience in corporate finance before embarking on his own ventures, most recently Atherton Bikes. Piers joined Ifty to kick off FounderMetrics in style in a two-part episode.
Piers’ advice? Be picky about the metrics you use to measure success.
“People make the mistake often that they just hear about and understand particular metrics and they try to apply it to a whole range of different businesses, and you can’t always do that”.
You need to be quite careful about what it is you’re looking for.
For example, “If you’re carrying stock…your inventory really matters because that could kill you because that’s just cash tied up”.
“Most businesses’ dynamics are very, very similar, especially down to your sales and marketing which can be very similar but after that, they can change dramatically”.
NHS clinical entrepreneur and GP Dr Julian Nesbitt is the founder of an app determined to slash waiting times and improve mental healthcare. In Julian’s conversation with Ifty, he revealed the power of endorsement and social proof.
“Having had NHS adoption, that was a positive sign [for investors] and being able to show that we've been growing at about 240% year on year with limited funding.”
NHS endorsement and organic growth via “word of mouth” made Dr Julian an even more attractive proposition to investors.
Olivia Mae Hanlon, founder of the empowering platform, Girls in Marketing, and self-proclaimed "calculated risk taker", suggested that traditional metrics, like revenue and profit margins, aren’t always the best measure of success.
“At the beginning, it was very much about how much impact can we make. You can measure it in a number of different ways. For me initially, it was the pure comments and feedback that we got from people”.
“People messaging us and saying “I’ve attended this webinar, I learned all of these amazing things”, “I did this programme, and now I’ve got a job in marketing”, or “I got a promotion”.”
To capture these comments, Olivia’s six-person team use multiple social listening tools and collects any brand mentions in a Google Drive folder for future reference.
The Rebel School has helped tens of thousands of people kick tradition to the curb and develop their business skills in a way that works for them. As you might expect, co-founder and CEO Simon Paine’s Key Performance Indicators (KPIs) are far from ordinary.
“When people said KPI, I used to get a little bit twitchy! So I thought, how can I make this more fun? Bringing KPIs to life in such a way that people will engage with them.”
“When someone comes through a Rebel Business School programme, we measure their confidence before and after...We ask them questions framed around self-efficacy.”
“We’re measuring the distance that they travel between where they were when they first arrived to how they leave”.
Measuring the social impact of your business is possible provided you ask the right questions.
We tried OKRs and that was a struggle for us.
To fully embrace Objectives and Key Results (OKRs) founders must set strategic goals and then identify the metrics that will help them stay on track.
So Felicia and the team pay special attention to an area they can influence more directly: net cumulative flow.
“The reason we settled on that a North Star metric is because ultimately, the North Star we believe in looking at is, are people valuing the service? Are they willing to pay for it? And the answer is what we set our platform fee based on.”
“We can’t affect how markets perform and so therefore we look at it in that sense”.
"It’s like asking how do you measure bravery? How do you measure passion? How do you measure watching a movie and the hairs sticking up on the back of your next? How do you measure that? Do you count the hairs?!”
There are no easy answers to these questions. But that's not to say that answering them is impossible. Creative Lead at Lounge and marketing extraordinaire Jo Bird, believes there are ways we can measure the impact and success of creativity.
The best thing to do? “Buddy up” with the marketing team or the campaign manager because they’re the ones with the data, they’re the ones with the insight.
Business accolades are great and seen by many as an indicator of success, but award-winning entrepreneur and founder of the LMF Network, Sonya Barlow, questions “performative allyship” in her interview with Ifty.
“I just wish that accolades came with a little bit more than just a trophy”.
If the prize for recognition is receiving some kind of reinvestment back into the company, then it’s a win-win. In a similar vein, Sonya touched on the ‘female friendly’ funds paying little more than lip service:
“The point is, I’ve started that business, I’m working really hard to drive it forward and all of the organisations and companies that are saying, “We want to help the female-founded businesses grow”, what are you doing to actually make that a reality?”
“If you ask someone what their North Star metric is, they’ll give you something that’s either very vanity or customer-focused.”
So “in the modern business environment, you have to be quite ruthless on what you’re tracking.”
That’s why John pays close attention to run rate revenue which is far more granular. “If you’re just saying you’re growing users, that’s great, BUT are those users growing revenue?”
It’s very easy for business owners to burn through cash every month. But exhausting those reserves can spell disaster, and that’s why it’s so important to keep an eye on your monthly burn rate.
“It’s easy to find yourself building things either because it’s trendy or because you just don’t question it”.
Lev encourages companies to think before building their own tech stack, especially when solutions already exist. But if in the future they do decide to invest, then at least by then there’s a strong business case for it and they’ve saved money in the meantime.
Carrington West’s employee retention rate is usually north of 90%, which is staggering when you consider that the industry average is closer to 50%.
CEO and co-founder, Simon Gardiner, talks to Ifty about what makes Carrington West one of the best places to work and how that’s the key thing that sets them apart from the competition.
“It’s about really looking after the individual team member, knowing what their personal goals are, helping them try to achieve what they’re looking to (in reason) achieve outside of work so that they can intrinsically see that their future and everything they want to achieve is going to be helped by the company”.
“I got a lot of stuff wrong in the early days. I was probably a little bit too laissez-faire on the cashflow management side of things”.
But suggests that founders can get too caught up in the numbers.
“If you try and quantify the complexity, you just end up making mistakes. There’s a good saying that it’s better to have an approximate answer to the right question than an exact answer to the wrong question.”
In essence, it’s a balancing act. And while you will get things wrong, what matters most is learning from your mistakes, playing to your strengths and delegating anything outside of that.
And that’s a wrap! A special thank you to all of our guests in this series. Thank you, the listeners, for tuning in. We can’t wait for series two.