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Metric based business decisions

Every week we take half an hour to talk just about any topic that crossed our minds during the last days and create a podcast for you (Listen to it in Spanish here and subscribe to our feed). We call it an Open Mic Podcast as we want to invite different people to participate, new ideas to take form and to shed light on various experiences and perspectives on business development.

You will hear Bernat, CEO at itnig, César, Product Director at Factorial and Jordi, CEO at Factorial discussing different topics with guests from our start-up ecosystem in Barcelona. This week Pau Ramon, CTO at Factorial, joins us.

This podcast #16 is special in the sense that we have three Factorial team members with us and will be able to learn more about how they measure and make use of metrics in their business decisions.

Pau and Jordi started working on Factorial a bit over a year ago but the idea was already formed a while earlier, while talking over a beer with Bernat. At this time they were working at Redbooth and thought it to be a good moment for change, to start something new, to create a team and to have sense of ownership that they no longer felt at Redbooth.

Pau Ramon has been working in tech for over 10 years, he studied multimedia and then dove right into web. Fascinated by internet companies, he started helping a Barcelona company that was creating a social network for models. He was working alone at the time, had to start creating a team — Almost by accident he became CTO. Through this experience he learned a lot and decided to continue in this direction.

He went to the West Coast of the US for a conference, missed the flight back on purpose and stayed looking to start something himself.

There he met Pablo whom we would later work with at Redbooth and that’s how we actually got started talking about metrics today.

“My role is not CEO, I like to do the product behind the business.”

At Redbooth I learned how to measure the success or failure of a business, to undo decisions that have been taken. I like to have one metric as indicator for the whole business and then segment it further based on funnel. We assign one metric to one function within the business or one person within the company. It’s important that marketing, product, sales, support…have their own metric and that they can see that the work they are doing are impacting the business positively. At Factorial for example, all metrics are always visible and every Friday we make a point of going through them together at our all-hands meeting.

“Metrics — a complex topic summarized in one number.”

When we started out building the product at Factorial and were not yet at the stage of customer acquisition, we took ‘activation’ of our companies as our main measure. It’s somewhat of a North Star — Something to guide you when you take a decision.

“I prefer an approximation to no orientation.”

To learn more about how they use metrics, what tool they use to measure and how they base their decisions on these numbers, listen to this week’s podcast here:

Podcast #16 with Pau Ramon

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Podcast #15: Ubaldo Huerta talking about another kind of entrepreneurship

Every week we take half an hour to talk just about any topic that crossed our minds during the last days and create a podcast for you (Listen to it in Spanish here and subscribe to our feed). We call it an Open Mic Podcast as we want to invite different people to participate, new ideas to take form and to shed light on various experiences and perspectives on business development.

This week’s Podcast #15 is opened by Masumi with our regular participants Bernat and Jordi, whom you already know. As a special guest today we welcome Ubaldo Huerta and talk about another kind of entrepreneurship, a slow growth that is not VC fueled. Listen to our podcast on Youtube or subscribe to our RSS to be always up to date.

Ubaldo Huerta, a young entrepreneur who learned to program at home thanks to his mother, left Cuba in the beginning of the 90s to San Francisco to live the early years of .com companies. In this new industry everybody was looking for developers, companies growing like mushrooms but also closing again. After a few years in this frenetic environment Ubaldo decides to leave on a sabbatical and — burned-out — wanders through Europe. He arrives in the Raval neighborhood of Barcelona and is mesmerized. Quickly he decides to stay and migrates from the US just as he had years earlier from Cuba. In Barcelona he felt right at home:

“An organized place with ticks of a third world country.”

In Barcelona Ubaldo becomes an entrepreneur out of necessity: “I was earning a lot of money, but in Spain the job market was more complicated as there was no need for software developers at that moment. It was also the time of transition to dedicated servers, when you could get a server for a few dollars and build it up yourself. You could start out, try something without a high investment for infrastructure.”

Ubald started Loquo, a kind of Craigslist, a classified site from his living room. He starts with scraping email addresses from forums, sending out emails to these accounts and commenting on all kinds of threads. He starts out working on his own, with his own resources:

“I prefer to do something with my hands, spend my time writing code even though it might take time, I don’t need to live in the times of venture capital.”

“Everybody should do what he does best. If I had to spend my time raising money, talking to investors, I would go crazy.”

And after a while eBay becomes interested and ends up buying Loquo to expand their own service of auctions. Since then Ubaldo has moved on to many more interesting projects and is now busy with Fonoma.

When I create something I need to connect with my environment.

If you are curious to know what Ubaldo is up to now, go ahead and listen to the full Podcast #15: Youtube — iTunes — RSS

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How to start a business from scratch

Every week we take half an hour to talk just about any topic that crossed our minds during the last days and create a podcast for you (Listen to it in Spanish here and subscribe to our feed). We call it an Open Mic Podcast as we want to invite different people to participate, new ideas to take form, and to shed light on various experiences and perspectives on business development.

Continue reading “How to start a business from scratch”

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Quipu's turning four — learnings and becoming a sales-driven SaaS company

Nearly the whole Quipu team — a great bunch of people!

For a startup every year is like little life, with new people, new features, new users and new challenges.

The fourth year for Quipu has been, according to co-founder and CEO Roger Dobaño, the craziest in terms of changes.

We’ve almost built an entire new engineering and design team and we’ve also built a totally new marketing team. On top of that we’ve moving over to being a sales-driven SaaS startup, not only focusing on product.

Last year when Quipu turned three years old, Roger wrote a post on working in a startup and how every year feels like a dog year, an opinion he still holds:

Every year still feels like seven, but we’re growing up to be a mature software company, and that means a new set of changes.

The radical team change

Over the last four years Quipu has slowly but steadily been growing their team as their business grew year over year.

A small development team of a few people where each team members did a little bit of everything, has grown to a full scale team, with several team members dedicated to the back-end, front-enders, a product designer and an architect.

Co-founder and CTO Albert Bellonch puts it like this:

We’ve gone from a startup that more than anything prioritized shipping product and going super-fast, to a more established tech company, where we can use more time and resources on dedicated parts of the product.

Even though the seven person development team is growing to know each-other better, Albert is happy to be able to spend more time talking with each developer:

Before I was coding every day, but now I’ve got time to talk to each team-member, how they’re doing and how they develop themselves professionally. I think that’s super important the faster we grow.

CEO Roger believes there ‘s a clear reason why they’re so happy with the new team:

In the interviews we didn’t only test their code, but more importantly, we tested their ability to think deeply about hard problems.

The reason why we chose to do these tests is that we’ve learned that you can be fast, but if you don’t think properly about the challenges you face, you’ll have many long-term problems.

Also a new sales-team has been built from scratch, with their own sales manager in place to lead the new department.

Until recently Roger was the person leading the sales effort, but being in charge of both the sales and the company as a whole becomes challenging as the company grows:

We always had a competitive advantage with our product, but our sales effort has been too slow too long, and we needed to change that.

The last months Quipu has built a four-member team of energetic sales people to bring their “friendly accounting” software to the world (and they’re looking for more energetic people)

The issues of growing up

The first years of a startup’s life it’s easy to motivate people. The team is excited to be working on something new, something that’s changing the status quo, just like Quipu’s doing in the B2B finance vertical.

But something changes when the team grows and the startup becomes more established, according to Roger:

The phase we’re in right now is one of the most demanding periods for our company. And just as our company has grown the last years, so has our team, and the relation you have with them is not as “familiar” as it used to be. Keep building a strong company culture is as important as understanding that people have lives outside our little tech bubble. I think that’s essential in continuing to grow what’s one of Barcelona’s best teams.

2017 has also been the year of international expansion and the first customers in France has now started using the Quipu product under the new name Zyfro.

Our new marketing and sales team consists of several French people, the first feedback from customers has been good, and we’re eager to see how the rest of the French market responds to the product.

He adds:

That everyone can do business on the internet is the biggest lie I’ve heard. Even though the barriers are low, like any business in order to grow fast you need a notorious product, money and relevant mission.

Quipu has a goal of raising their series A-round sometime at the start of 2018.

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The mechanics of growth with ex-Gmail product manager Itamar Gilad

Exponential growth is what most startups are searching for, and something most entrepreneurs never experience.

Itamar Gilad has spent seven years at Google managing products at Youtube and Gmail and have in both cases experienced what most entrepreneurs are dreaming about: seeing growth in the hundreds of millions of users that genuinely love your product (you’re probably one of them).

This is not an in-depth post on growth, so if you feel you got the basics covered, I suggest you book a private lesson with Itamar. But if that’s not you, please continue reading.

The one metric that matters

The first things Itamar suggests is that you pick one metric to grow.

One of the biggest mistakes companies does, is not choosing exactly what to grow. You have to find the one metric that matter.

Facebook uses MAU’s, Gmail has WAU’s, Whatsapp measures “sent messages”, Airbnb “nights booked”, etc. Find your own metric, and choose it wisely. But make sure that the metric you’re measuring is connected to how much value you’re providing to the users.

1st, 2nd and 3rd tier metrics

When you’ve found the one metric that matter to you and learned how to properly measure it, you should try to discover your KPI’s and your proxy metrics.

The KPI’s (2nd tier metric) include measuring CLV, MRR, CTR, etc. The 3rd tier metric is tougher because it’s very company specific.

As you probably can imagine, it’s a bit tough to ask a team of developers: improve monthly active users, you need to figure out what smaller things are driving growth for your product?

All successful companies have these pivotal moments when they discover a proxy metric that ends up driving much more growth than they anticipated.

The only way to find these magic elements is by deep diving into your product, into what you call a discovery phase, and when you find your product market fit, you hopefully know the most effective triggers to your growth.

Find and start your growth engine

So how does this loop of positive feedback from your users look like? And how do you start your growth engine?

First, you got (1.) retention: People that goes through your acquisition funnel, becoming active users and coming back for more. This means that people are finding value in your product.

Then you got (2.) referrals: People that like your product so much that they’ll recommend it to other people in their network. This, word of mouth, is very powerful.

The third one is (3.) revenue: Everything from subscriptions to in-product purchases, etc. That you can sell to your users. The important factor here is that each user generates more revenue than what it costs to get that person through the acquisition funnel.

The only good way to start this engine and get it to run fast is by producing a product that instantly gives value to your users.

Itamar Gilad has worked with products at Gmail, Youtube, Microsoft and several other tech companies.

A fourth part of the virtues loop is something very few companies manage to really utilize, which is (4.) learning: While the engine is running, you use data from your users and your qualitative insights to learn how people go through the funnel, and how to optimize it to make more people slide through your funnel in a better way.

Template for growth

  • Choose one metric that matters to you and your team — let it be your north star.
  • Identify proxy metrics and build a growth model
  • Picture right growth engines (like above: retention+referrals+revenue)
  • Optimize for your OMTM with research and experiments
  • Focus on (demonstrable) value to user

REMEMBER: This was a brief rundown of Itamar’s talk, full talk here.

Continue reading startup stories?

https://blog.itnig.net/how-a-small-group-of-in-house-product-designers-killed-cabifys-corporate-brand-and-made-it-purple-cb5c5ddf0fb0