How Metrics-Based Growth Can Shape Your Business
Attended a session that was, in theory, about metrics-based growth, and OKRs, but I’ve gained so much more from this session that will help me grow as an entrepreneur. I’ve never had formal entrepreneurial training, just the regular degrees that help me understand various business concepts. But it’s sessions like these that allow people like me to learn about the application of so many brilliant concepts that, in turn, help us grow to be better entrepreneurs.
Business is very much about value creation but it’s important to be able to track that value. It was enlightening to know understand more about operational metrics. While it can be calculated through various models, including transactional business, subscriptions, ad-based activities, or platform business, I realised University Living is more inclined towards the transactional and platform business models. We’re all compelled to choose the operational business model that reflects the business’ point of view.
Yes, tracking financial metrics are important but only focusing on that might drive us to be conservative. To drive numbers, you need to have a plan in place that will sometimes include taking a calculative risk and investing capital. This cost needs to be looked at as an investment that will help you scale the business, create efficiency, and get close to the business objective. And before you know it, you will be achieving high operational efficiency that will attract investors and excellent talent. This efficiency achieved will then justify the cost.
While defining your financial metrics and operational metrics are fundamental to your business, it’s baseless if you don’t follow it through and achieve it. This is why, it’s crucial to define the north star metrics — those that are vital, simple, few and known by everyone at the workplace. However, keep in mind that it’s good to set difficult goals as they will push and inspire you to achieve more, but there’s a fine line between difficult goals and obnoxious goals, and you have to be prudent enough to know the difference.
The company culture you nurture is a key element that allows you to achieve these north star metrics. At the end of the day, it depends on the leader’s vision, the resources at their disposal, and how they use these resources effectively to create value for all their stakeholders.
