When is a Company Ready to Scale?!
What metrics should you choose to use as indicators?
Thank you to all the great customers and colleagues who have made the last few days in Switzerland so special! I’m headed to Paris, London..then Orlando next week and I just can’t wait to see what the next 10 days will bring!
In fact, this month will be punctuated by many Data, AI and Analytics events were we will all have the opportunity to meet, in person and online and I just can’t wait to learn from our conversations! Here is what’s happening just in the next 10 days!
1 — Customers to Customers [Paris]
Come meet Carrefour’s CTO Mehdi Labassi & Miguel Ángel González Gisbert, Kering’s Data Leader Jean-Philippe SARASY, Groupe Rocher’s Data Product Lead David Ramond and many more at this C2C event. Sign up below to reserve your spot here!
2 — Customers to Customers [London]
Meet Aldermore Bank’s CISO Emma Griffin, GoCardless’s Data leader Andrew Jones, Arabesque’s CTO Nikolaos Kaplis, Lytics’ Jasminder Sidhu and and many more. Sign up here to reserve your spot!
3 — CDO Club @ Gartner Data & Analytics Summit
And then, of course, The Gartner Data & Analytics Summit where we will have plenty opportunities to meet at sessions and customer gathering. I will be at the CDO Clud event hosted by Team8, Nexla, Dremio, Manta and Data.World. Hope to see you there!
For more session details, read last week’s blog here.
4 — CarCast on the Customer To Customer Community!
Speaking of Customer to Customer Community, your favorite CarCast is now available on the Customer To Customer community where 10s of thousands of data leaders discuss every week the most important issues they’re dealing with. This is a great opportunity to learn from other experienced leaders. Be sure to sign up here (it’s free!).
5— How To Solve Complex Problems
Break them down in pieces! I met Jim Hogan last year and his work is inspiring! Watch the video and engage here
This week’s feature: When is a company ready to scale?
What specific unit economics measure should a startup choose? Stage 2 Capital’s Jay Po takes a crack at the answer.
There are 3 main points:
- LTV:CAC is calculated using three variables: 1) Average Rev Per Customer, 2) Churn, and 3) CAC) which are based on a point in time, and don’t customer behavior that changes over time and probably worse averages behaviors that is not beneficial to your analysis…particularly in early to mid-stage where very little is fixed, like your Ideal customer profile (ICP), pricing and packaging, GTM motion….etc.
- In addition, as more businesses are moving towards “land and expand” or consumption-based pricing these three variables change frequently. So, simplifying these three variables into a single number will cause you to lose granular understanding.
- You should instead look at monthly customer cohorts to track sales efficiency and assess customer value over time. So calculate CAC per cohort and measure how long each cohort takes to break even on CAC. This is something he calls the Cohort Customer Acquisition Cost Payback equation (CCAC Payback).
Lots of details in the blog, including what your CCAC Payback should be by customer segments from SMB to Enterprise here.
EXTRAS
Google Data Cloud Summit: Are You Ready for THIS?!
We’ll be closing this year’s Google’s Data Cloud Summit with Booking.com’s Data Leaders Baris Gul and Warren Qi.
We talk about how they use BigQuery, Dataflow, Spanner at scale (2M nights booked/day, 1M+ queries /month, 2PB+ scanned…and more!).
Be sure to register for free here.
Business Model Generation Books!
What an honor to meet with Yves Pigneur, co-author of Invincible Company and Business Model Generation! I wrote a piece about their work a few months ago. (see it below). Couldn’t recommend their work more!
Reference blog @ https://readmedium.com/grow-your-company-9-questions-you-need-to-answer-649c2f18397c
