Key Metrics for Achieving Sustainable Growth

The most common mistake I see among founders of 7 & 8-figure consumer businesses is simply focusing on the wrong long-term KPI's. Here are my 10 north-star indicators of sustainable business growth: 🚀 ✦ Brand’s EBITDA (net-profit) is growing year on year (even if revenue is flat or has slow growth). ✦ Brand has a long-term business strategy tied to storing cash reserves and being an attractive acquisition prospect within their market (or going public) (and has been communicated to their internal team at large). ✦ Brand has a tight grip on its MER (marketing efficiency ratio) with a nuanced framework—to deploy a 7, 8 or 9-figure marketing budget across many verticals. ✦ Brand’s CLTV (customer lifetime value) is improving YoY. ✦ Brand has a dialed-in organic social strategy that helps across the entire funnel from awareness to conversion to nurturing loyal customers — and has major mindshare of the idea customer profile in their market. ✦ Brand has a thorough understanding of how each paid advertising platform historically performs for them and are spending/monitoring across all channels (even if spending very little on an individual channel). ✦ Brand is selling across multiple sales channels, with DTC being an above average % of sales. (Why? Because margins are better at scale, brand experience is controlled, and first-party data is more available). ✦ Brand is able to rely on a plethora of first-party data to drive intelligent decisions across the entire business. ✦ Brand’s product development is vertically integrated (to the extent it can be) and the product catalog has achieved a breadth of “functional integration.” ✦ Brand sentiment is positive and improving over time amongst ICP of each age/stage range (both younger and older generations), as well as internal employees and the job market. ✦ There is a positive correlation between the brand’s reputation and their gross margin (capital 'B' Brand). ✦ Brand is financially able to engage in strategic M&A as a part of business growth and marketing, if the opportunity should arise and make sense. ——— These are things to strive for. A brand with even half of these characteristics is in a good place. The problem is that it's easy to be myopic in carrying out operations and lose sight of the big picture. 

In the early stages of a startup, it's easy to get caught up in vanity metrics, like website traffic or social media followers, but these don't always reflect real progress. For startups aiming for growth, focus on metrics that truly matter: Customer Acquisition Cost (CAC): How much does it cost to acquire a new customer? Reducing CAC while increasing revenue is a key sign of efficiency. Lifetime Value (LTV): What’s the total revenue you can expect from a customer over their lifetime? A high LTV to CAC ratio shows long-term sustainability. Monthly Recurring Revenue (MRR): For SaaS or subscription-based models, MRR provides a clear view of consistent revenue growth. Churn Rate: Are your customers sticking around? High churn is a red flag that you need to refine your product or retention strategy. Customer Retention Rate: The flip side of churn, this metric shows how well you're keeping your customers engaged and satisfied. Growth Rate: Ultimately, how fast is your business expanding? A steady growth rate indicates that you're on the right path to scaling. These metrics give investors and founders a better sense of real performance and sustainable growth. The key? Tracking them early and adjusting course before it's too late. What metrics do you focus on in your startup? #startups #growthmetrics #businessstrategy #scaling #entrepreneurship #venturecapital #privateequity

Most CEOs drown in vanity metrics. While the crucial numbers slip through their fingers. The harsh reality? Your $1M MRR means nothing when you have 2 months of runway left. Your 300% annual growth means nothing when retention drops below 70%. To scale smarter and lead with clarity, master these 10 KPIs: 1/ Cash Burn ↳ Track it to avoid running out of time and options 2/ Runway ↳ Understand how long you can survive without new funding 3/ Working Capital ↳ Your safety net for daily operations and stress-free growth. 4/ Revenue Growth Rate ↳ Momentum matters—steady increases show scalability. 5/ Employee Costs ↳ Ensure revenue per employee drives efficiency and value. 6/ Budget vs. Actual ↳ Spot gaps early to adjust strategy before it’s too late. 7/ Gross Margin ↳ Strong margins fuel reinvestment and sustainable scaling 8/ Customer Retention ↳ Keeping customers is always cheaper than finding new ones. 9/ Customer Acquisition Cost ↳ Control CAC to ensure scaling doesn’t erode profitability. 10/ Profitability ↳ The ultimate check on your financial health and flexibility. The truth? Metrics don't run companies—leaders do. But without the right KPIs, even great leaders can lose sight of what matters. Which KPI do you track most? ♻️ Share to help others focus on what matters. And follow Mariya Valeva for more

What metrics do investors look for when evaluating a consumer packaged goods (CPG) startup? This was a question that was posed on a webinar I participated in with Kat Weaver and Katie Dunn from Power To Pitch. Here are 11 important metrics that matter: 1. Gross Margin A high gross margin indicates efficient production and strong pricing power, which are critical for sustaining profitability as the business scales. Benchmark: CPG companies often target gross margins above 40%. 2. Customer Acquisition Cost (CAC) Investors look for a CAC that is manageable and ideally decreasing over time, indicating improved marketing efficiency. Benchmark: CAC should be low relative to the Customer Lifetime Value (CLTV) to ensure sustainable growth. 3. Customer Lifetime Value (CLTV) CLTV reflects the total revenue a business can expect from a single customer over the course of their relationship. A higher CLTV relative to CAC suggests the business can achieve profitability with scale. Benchmark: A CLTV/CAC ratio of 3:1 or higher is generally considered strong. 4. Monthly Recurring Revenue (MRR) or Annual Recurring Revenue (ARR) For CPG companies with subscription models, MRR or ARR provides insight into revenue predictability and growth. Benchmark: Investors look for consistent MRR/ARR growth, ideally in double digits month-over-month. 5. Churn Rate Churn rate indicates the percentage of customers who stop buying your product over a given period. A low churn rate is crucial for maintaining steady growth. Benchmark: A churn rate below 5% is generally favorable for a CPG startup. 6. Sell-Through Rate This metric shows how quickly inventory is sold over a given period, reflecting product demand and inventory management efficiency. Benchmark: A higher sell-through rate is positive, typically around 60-80% depending on the category. 7. Retail Velocity Retail velocity measures the speed at which products sell through retail channels and can signal product-market fit. Benchmark: Consistent and growing retail velocity in key accounts is a positive indicator for investors. 8. Revenue Growth Rapid revenue growth signals strong market demand and effective execution of the business model. Benchmark: Early-stage CPG startups often aim for annual revenue growth rates of 50% or more. 9. Repeat Purchase Rate This metric indicates customer loyalty and satisfaction, both of which are crucial for long-term success. Benchmark: A high repeat purchase rate, ideally above 30%, indicates strong customer retention. 10. Distribution Channels and Expansion The breadth and effectiveness of distribution channels impact how quickly a CPG startup can scale. Benchmark: A growing number of distribution channels, particularly in key markets, is favorable. 11. Burn Rate A high burn rate without corresponding revenue growth can be a red flag. Benchmark: Investors prefer a manageable burn rate, with a clear path to profitability or subsequent funding.