How to prove that your startup idea is right – metrics that matter

what_to_track_when_you_are_a_startup

How do you know if you have the right idea for a startup?

Is it really possible to ever know?

Most startups fail. The better job you do validate your business idea the more likely will you succeed.

And, you might wonder:

Which metrics can I measure to prove that my startup idea is right?

The most important idea is that – The answer is not within you.

This is so important, so I must repeat.

“The answer is not within you.”

Talk to people

How do they react to your business idea? Do they ask you for more information? Do they show genuine interest, or are they listening politely?

When you talk to people pay attention to the following:

Is it interactive or are you talking? – There has to be a back-and-forth between you and your customer or potential customer.

You can’t be talking at them. You have to mostly listen. Don’t pitch. Interact.

Are you solving any of their problems?

Are you saving them time?

Do you help them make more money?

Here is what you measure:

  • How many people want you to keep them updated about your startup?
  • How many of them are willing to meet with you to find out more?
  • How many of them are helping you by spreading the word about your startup?

“You have nothing unless someone is willing to pay for it.”

I can hear you yelling at your screen.

What about Facebook and WhatsApp?

Who is paying them?

I mean in the real world now where we are building businesses to pay your bills.

You have to get paid.

So, back to reality now.

Your next metric is sales.

I know it’s hard, but sales is the only thing that really matters in business. If people are willing to pay, you have something.

Sales is good, presales is great.

Presales is one of the best startup metrics

You might ask yourself. How can I sell something that I don’t yet have.

It happens all the time.

You have something. You have a business idea.

Can you get others to believe in your business idea?

If your prospects really believe in your product, many of them will buy before you even made it.

Here is what you measure:

How many people are willing to pay you before you actually have a product.

A “maybe” is not a sale. You are looking for a “yes” or a “no”. Don’t accept a maybe.

Find out what works

The best way to do that is through your conversion rate.

Conversion Rate = Outcomes / Unique Visitors or Meetings or Phone Calls

 

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