Startup Metrics

The $4 billion venture capital firm Andreessen Horowitz is sharing some of the startup metrics that they use (part 1, part 2).  Here they are just for the overview, follow through to the blog posts for details:

  1. Bookings vs. Revenue
  2. Recurring Revenue vs. Total Revenue
  3. Gross Profit
  4. Total Contract Value vs. Annual Contract Value
  5. Life Time Value
  6. Gross Merchandise Value vs. Revenue
  7. Unearned or Deferred Revenue and Billings
  8. Customer Acquisition Cost (Blended vs. Paid, Organic vs. Inorganic)
  9. Active Users
  10. Month-on-Month Growth
  11. Churn
  12. Burn Rate
  13. Downloads
  14. Cumulative Charts vs. Growth Metics
  15. Order of Operations
  16. Total Addressable Market
  17. Annual Recurring Revenue
  18. Average Revenue Per User
  19. Gross Margins
  20. Sell-Through Rate and Inventory Turns
  21. Network Effects
  22. Virality
  23. Economies of Scale
  24. Net Promoter Score
  25. Cohort Analysis
  26. Registered Users
  27. Sources of Traffic
  28. Customer Concentration Risk

There are also some tips and tricks on charts and data presentation, like truncating the Y-axis.  Here is an example:

truncating y-axis

Overall, quite a bit of useful information for analysis of different startups.  No wonder their portfolio is so impressive!

P.S.: Love the creative approach to the domain name as well … a16z.com (16 letters between A and Z in the company name Andreessen Horowitz, minus a space).

Billion dollar club

billion dollar club

The Wall Street Journal compiles a list of venture-back private companies, valued at $1 billion or more.  There’s a table with the list of 120+ companies and an interactive chart to navigate it.

Note: This chart only includes companies that are privately held, have raised money in the past four years and have at least one venture-capital firm as an investor. Excluded from this list are companies that were majority-controlled by an institutional investment firm at one point. Only valuations confirmed by VentureSource or The Journal are included, based on direct investments, not secondary deals.

 

The next tech bubble is about to burst

Joe Kukura predicts the upcoming burst of the next tech bubble in his “The next tech bubble is about to burst“:

My timer for the bursting of this tech bubble currently stands at nine months. That’s when investors and venture capital markets will stop throwing around billions in Monopoly money, companies without any profits will lose their suspiciously optimistic valuations, and startups will crater. Unicorns will die, skies will fall, and parents’ basements will be resettled. We saw this with tech in 2000, with banks in 2008, and according to my Magic 8-Ball, we’re going to see it again very soon.

I don’t really know who he is, but he is linked to a selection of other people saying the same thing, with who I’m very well familiar – Mark Cuban, Andreessen Horowitz, Fred Wilson, and others.

What did Billion Dollar Companies Look Like at the Series A?

Here is an interesting look at some of the well-known companies – What did Billion Dollar Companies Look Like at the Series A?

billion dollar startups

The article gets into some of the common criteria, which I’ll briefly list here:

  1. Easy-to-Dismiss Ideas
  2. Competitive Markets
  3. Reinventing Existing Consumer Behavior
  4. Untested Founders
  5. Zero Monetization

 

On experience

If I believe that I already know the answer and possess the truth, then I’m not genuinely open to learning larger truths.

This is the danger of experience. We already know better, we already know that an idea or business won’t work. This is one reason that naive, young founders are often the ones who start the most successful companies — they just don’t know any better, and they’re often too arrogant to listen to those who do.

Paul Buchheit

What roles should the first 10 employees of a tech company be?

Quora runs the question: What roles should the first 10 employees of a tech company be?  Here is my favorite answer:

  1. jack of all trades, master of a few
  2. jack of all trades, master of a few
  3. jack of all trades, master of a few
  4. jack of all trades, master of a few
  5. jack of all trades, master of a few
  6. jack of all trades, master of a few
  7. jack of all trades, master of a few
  8. jack of all trades, master of a few
  9. jack of all trades, master of a few
  10. someone that can sell ice to eskimos