Judge your journey so far...
The numbers tell them all. While the current numbers might be exciting, what is truly of value will be the projected cash flow much ahead. So even if the current position is burning profit, the potential to take a huge leap is always positive.
User growth pattern tells you much about the product market fit. An eye on future product developments in the pipeline and if the management has the foresight to be competition neutral will establish the direction of the brand.
Some brands ride on waves of seasonability. While the peak like Christmas seasonal sale is exciting, the extensions to make it a year round brand could be a deciding factor for sustenance.
Product & Business functional questions to ask...
A) What are the tools employed?
In the technological era, getting hold of a tech product and making it proprietary is defiantly noteworthy. Even a bigger plus, would be having an algorithm that's solution-oriented.
There are bigger points for the simplicity of user experience.
B) Are they implemented correctly?
An enterprise is always judged by its process. The more robust the system, the better its functionality. More importantly, entrepreneurial control.
C) What could be done better?
There is always scope to improve.
Both Speed & Quality of experience are the deliverable targets.
D) What are the metrics being followed internally?
- Anualy Recurring Revenue (ARR) - The business should have identified with an annual recurring revenue that assures ROI especially post seed investment. A domain renewal is a very good example of this model.
- Monthly Recurring Revenue (MRR) - The monthly income guarantees to offset Cost of Sales & Operational expenses. A positive revenue firm will have MRR (post taxes) closer to match recurring monthly expenses. Paid Monthly Subscription model is a viable example.
- Sales Approach- Your sales strategy determines future mining prospects. The scalability of reach is not just demographic but also from audience
affordability perspective. Creating different price points to allow a larger and varied audience accessibility is noteworthy. Nescafe coffee has varying price points at various consumption points from cafes to vending machines.
E) Are the metrics reflecting on growth?
Each revenue stream are determined by market forces at large. The success of the business is direct allowance to the 'trend predicting capacity' of management to align business functions for future demands.
The business must get the right SALES LITERATURE to make the offerings clear. More importantly, are you able to answer "WHY YOU" right? A business that aims to quantify and qualify a great CUSTOMER EXPERIENCE stands to be a clear winner.
A) Acquisition & Channels
Management's focus to establish a WHOLESOME EXPERIENCE by aligning with right acquisition strategy & alliances ADD DEPTH. Most of the businesses that are successful do not RE-INVENT the wheel.
Ultimately its all about execution. Timely delivery and gauging of turnaround speed on a set process is a direct give on business viability.
Recently, I chose not to invest in a upcoming restaurant simply because they didn't deliver for a party I organised. What was worse is the way the situation got managed. Your existing / prospect investors are customers first.
Sadly with access to large funds, newer client acquisition is much easier. Discounts may allow the first download or the first transaction... Needless to say, its the repeat order that establishes future scale possibilities.
Always believed your existing customers are the best sales people for any business. A robust system to reward a referral shows the management intent for growth.
It is okay to make revenues in smaller pockets of audience than catering to a larger audience for a start up. If they got the system in place for one ecosystem right, then realigning for a larger or different eco system will be easier.
Amazon today is the world's largest general store. They focused on just books as a start up. Business that takes small bites
Share your views on what are other qualifiers to JUDGE A GOOD START UP in the comment section below.