Just before we left for Europe a few weeks ago, we launched a couple of eBooks. One was Anna’s guide to Building the Startup Sales Team and the other was my Guide to SaaS Growth Metrics. While I’m grateful for how they’ve been received, being away from everything for a couple of weeks has given me some additional perspective. SaaS metrics aren’t everything. They are a way to objectively measure performance and progress, but the color around and between them can be much more gray than black or white. In many cases, the metrics give you what’s happening, but you have to look further to fully understand why. I think we all know that but perhaps forget it every once in awhile.
Management More Than Institutional Value
I received an email from a colleague I’ve known for a long time. He was complimentary of the guide and grateful that his team had a reference that reinforced what was important and how those levers impact the growth and momentum of his SaaS business. His feedback reminded me that the real value of these metrics is not to a VC, PE or strategic, but rather to management. SaaS has unique but relatively consistent challenges and opportunities that can be seen through the lenses of certain numbers. Awareness of those numbers and the dynamics they represent is half the battle for improving performance and accelerating growth. The other half of the battle is understanding how to impact those numbers.
Dashboards of SaaS Metrics
I wrote an article recently on transparency of accountability within the organization and would like to connect the dots between that concept and management metrics. At Beacon9, we see a lot of companies that don’t have their metrics game on. We also see many that have their metrics game in high gear, but only the c-level sees the numbers. I feel like the c-level silo of metrics is a waste and a missed opportunity to align the entire organization behind tangible goals and objectives.
At ion, we ran live dashboards of department-specific sub-metrics that bubbled up into organizational growth metrics. Our teams understood that relationship only because we put effort into educating them on those dynamics. They understood the business and how they could each impact its success. We shared just about everything — good, bad and indifferent — and explained how we were doing and most importantly, why.
Back to the Shortcoming of Why
There’s that word again: why. Part of sharing SaaS metrics and striving to beat goals around those numbers is understanding why a number is what it is. Unfortunately, that’s the part that’s often lost in dashboards and spreadsheets. It becomes a management imperative to clearly and consistently frame numbers in reasoning. I’m not just talking about the CEO in all-hands here.
I had daily standups in both of my direct-report departments — marketing and operations. Both of those departments were metrics driven and the numbers themselves were everywhere for everyone to see. There was no need to restate numbers in a standup. But, what was needed was to frame outlying numbers in reasoning (from me) and to get gray-area color from my teams (where I needed understanding). While this may sound obvious, I think it’s easy to get lazy and not give and get the context.
Context, Perspective, and Real Learning
The funny thing about those quick standup bursts of context and perspective was that they often resulted in real learning. Remember, I’m just talking about 15-minute standups here, so the explanations were mighty brief. But they often stimulated more meaningful understanding of the dynamics around a number, which often resulted in more nuanced and purposeful correction. To me, that translated into less wasted effort and faster momentum corrections.
In my SaaS metrics eBook, I talk about pulling and pushing on the levers in a SaaS business. In order to do that, you have to have the numbers as well as the understanding behind them. The truth is, you can get a lot more force behind a lever when you have more of the organization pulling or pushing. And they just pull or push harder when they get it. So after a couple of weeks off the grid, I guess that’s my point — you can have all the numbers in the world, but if you don’t educate, frame and contextualize them, you don’t benefit from the full force of the organization to improve. Oh, in my experience, they’re also just plain happier when they actually understand the business, so there’s that upside too.