Recently I was talking with a B2B tech entrepreneur who’s starting to get some traction in his business. To date, he’s been running around taking care of details and doing whatever it takes to be successful. Now, with a little bit of revenue coming in, he wants to start tracking more metrics and key performance indicators in the business. He asked what the top three metrics were for B2B startups and I quickly responded:
- Cash on hand – the only way to go out of business is to run out of cash. Know your cash, know your business.
- New qualified leads – the main bottleneck for growth, especially with SaaS startups, is qualified leads. Most entrepreneurs build a good product, but that doesn’t matter if you don’t have qualified leads that become customers.
- Weighted sales pipeline – sales directly feeds into cash, and a weighted sales pipeline is the best way to proactively understand the health of your startup going forward.
Notice that two out of the three metrics are sales and marketing related. My recommendation is for entrepreneurs to plan on spending 3x their engineering costs on sales and marketing. The best customer acquisition execution wins out over the best product most frequently.
What else? What are your top metrics for B2B startups?
David Cummings on Startups 
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