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Working backwards to uncover key success factors

If you’re a saas business,  you’re likely overwhelmed with data and an ever-growing list of acronyms that purport to unlock confidential keys to your properity. But like most things,  tracking what you do has very tiny impact on what you actually do.

It’s really important to find one, or a very little number, of key indicators to track and then base your activities against those. It’s arguable that SaaS businesses are becoming TOO data driven — at the expense of focussing on the core business and the reason they exist.

In this article, we’ll look at focusing on metrics that matter, metrics that assist form activities, not just measure them in retrospect.

Most of the metrics we track, such as revenue growth, are lagging indicators. But growth is a result, not an activity you can ride. Just saying you want to grow an additional 10% doesn’t mean anything towards actually achieving it.

Since growth funnels are generally looked at from top to bottom, and in a historical context — a good exercise can be the other path around — go bottom-up, starting with the end result (the growth goal) and figure out what each level needs to contribute to earn it.

You can do this by looking at leading indicators. These are metrics that you can influence — and that as you act, and see them increase or decrease, you can be relatively certain of the knock-on effects on the rest of the business. For instance — if you run a project management product, the number of tasks created is likely to be a good leading indicator for the growth of the business — more tasks created on the platform equals more revenue.


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