Minimum Viable Metrics

One of the key strategies for very early stage companies, for new product developers, or lean practitioners, is the concept of the “Minimum Viable Product.” It’s a very customer centric approach in launching new products. It seeks to minimize the risk to the company by introducing a product with just enough functionality to gain interest, then to learn from that, quickly improving and enhancing the product.

If you look to many unicorns, they started with a MVP, learning from their first product introductions, then quickly growing from it. Companies like AirBnB, Zappos, Uber. Even Amazon and OpenAI have leveraged the concept of an MVP.

There are a few key things about MVPs which make them very powerful:

1. Reduces risk: Rather than seeking perfection, we reduce both the investment/business risk and the time to results with a MVP.
2. Intensely Customer Centric: It’s success is based on the focus on the value to the customer, how they respond to the product, and what they learn from the customer in their use of the product.
3. Flexibility: Since it hasn’t been “cast in stone” with extensive development, it can easily be adapted based on the customer/end user behavior. We know longer have to make assumptions about what customers need, only to be surprised by their negative reaction. Rather we can learn and grow with the customers.

The basic concepts underlying MVPs can be applied in many aspects of business, not just product development.

What if we looked at applying the principles of MVPs to the Minimum Viable Metrics?

That goes against the current trend in dashboards and reporting. With all the new analytic capabilities, with all the data, and with the help of AI, we can measure virtually everything that happens in our customer engagement. We have endless metrics around every aspect of our GTM performance.

I won’t go through the endless list of things we measure, you know them better than I.

But the key issue is, “Does our ability to measure virtually every aspect of the work actually improve our ability to perform?” The data would suggest it doesn’t. And there are some, including me, who think it’s the obsession with this data that distracts us from actually doing the work.

What if we took a minimum viable approach to our metrics, creating the Minimum Viable Metrics?

What if rather than inundating our people with metrics, we tried to identify the 3-4 most important for their performance?

To do this, would require us to apply the same MVP principles.

1. We have to deeply understand our people, their roles, and the things most critical to their success.
2. We reduce risk by focusing on the 3-4 things most critical to understanding performance.
3. We have to be flexible with the metrics, as things change, we have to continue to adapt those that are most critical, based on what they currently face.

Within our own organization, while we have been able to leverage all sorts of data for many years, we’ve been able to leverage the Minimum Viable Metric approach with great impact. We track 3 things:

1. We have a single top of funnel metric: Number of high impact conversations within our ICP per week. Each of us has a goal for these, reporting them each week. If we see significant under performance for a few weeks, we know that will have an adverse revenue impact in 12-15 months.
2. We have a single pipeline metric, it’s a variant on pipeline coverage. Across the company, we need 1.2-1.5X pipeline coverage. We have pipeline quality, win rates, sales cycles, average deal sizes dialed in. We don’t have to continue to assess those, so we track the coverage number for each person. We know if each of us has the right coverage, we will achieve our revenue goals.
3. Customer outcomes generated. Are our customers achieving the outcomes they expected and that we have committed to helping them achieve.

With these three focus areas, we know we are doing enough to generate the volume of opportunities to feed our pipelines. The pipeline coverage ratio tells us we are working on enough to achieve our revenue goals. The customer outcomes are our most important metric. Assuring our customer achieve their desired outcomes is critical. It leads to recurring business and huge referrals.

Every once in a while, we have looked at other metrics as we focused on certain performance areas. At one time, we were focused on reducing the buying cycle. We applied design thinking to our meeting management, reducing meetings to close by 50%. Once we got that wired in, we stopped tracking it. We knew each of us were working that process well. Once we thought we were being too restrictive in our ICP. We thought we might be losing revenue growth opportunities by being too restrictive. We were particularly interested in expanding into new segments. At that point, we had to reduce our expectations on win rates, deal size, etc.–impacting our pipeline coverage models. We tracked more pipeline metrics, and our top of funnel metrics than normal. As we developed our understanding of the new ICPs, we got back on target for our expected pipeline metrics, we went back to our single pipeline metric.

As we start seeing variations in our attainment in each of these three metrics, we dive into them to understand what’s happening. Has something changed? Are we slipping in our own performance? What do we need to correct? Do we need to change?

We will identify what we need to do and by what date. We will identify a few key goals/metrics. We will track them until we get the change wired in, then we will stop tracking them.

Some of you might be thinking, “Aren’t they tracking revenue?” We pay attention to it, but we know it is an outcome of the things we do. And as long as we are tracking on our three core metrics, we will achieve our revenue goals. But we know that obsessing about revenue doesn’t fix it. What fixes it is the successful execution of our work.

Just because we have so much data and a myriad of tools with which to analyze the data doesn’t mean all of it is important or that we need to establish so many metrics.  Too often, they become confusing or distracting.  Too often, they have little impact.  Too often, we haven’t taken the time to deeply understand the key drivers to our business.  How do we simplify and sharpen our execution?

What would happen if you started looking at the Minimum Viable Metrics for your team? What would happen if you could focus on 3-4 key metrics/goals with them, ignoring everything else?

Would it increase the focus your team has on the things most critical to success? Would it free up time for you and they to focus on doing those things, rather than measuring all sorts of things? Would it improve your success?

Afterword:  Here is the AI generated discussion of the post.  They actually take this topic in some interesting new directions.  Enjoy!