Three (3) Metrics to track that get you 3x Growth
In 2022, I personally did calls and Zoom meetings with over 200 startup founders last year, and interacted with more than 2500 more via live events and LinkedIn.
A consistent theme in those conversations?
“I want to 3x revenue in the next 12 months.”
Here’s the skinny on how to make that happen –-
If you want to 3x growth, there are three (3) metrics to track —
$ ACV – Both net new customers and expansion to existing customers.
% Pipeline Coverage Rate/Win Rate –- This should be at least 30% with a stretch goal approaching 50%. Why? So that you get really freaking good at deal qualification and discovery.
# Lead Generation – How well is your startup consistently generating new leads from your target ICPs.
If you contact 20 new leads per day, or 100/week. If you land 10 meetings, 5 end up in the pipeline and 2/5 convert to customers within 3 months at $30k AVC.
Bump that to 200/month = 10 meetings = 5 qualified opportunities @ 40% Win Rate = 2 customers. 2 * 9 months = 18 net new customers.
18 * $30k ACV = $540K forward ARR going into 2024.
That’s 50% of the $1M ARR goal, and 18% of a $3M ARR goal.
Why 5% meeting rate?
Assuming that you are SUPER clear about your target market — the problem you solve for a specific vertical or niche and know the key stakeholders that will be directly involved with the purchase decision, multiple market studies show that ~10% of this targeted market set are either actively buying (a.k.a “in-market”) or open to buying a solution.
1/ Raise prices.
Chances are that you are drastically underpricing right now. Marc Andreessen
has said over and over that his first advice to B2B founders is to raise prices.
2/ Improve Deal Qualification & Discovery.
Opportunity cost of time is too high for an early-stage founder and her team to spend chasing unqualified deals.
If a startup’s Win Rate is only 15%, 85% of sales time is wasted – sending one-pagers, doing multiple demos with mid-level managers and users with no purchasing influence, drafting proposals then chasing prospects for months only to find out that there was never budget for the purchase in the first place.
3/ Install a Repeatable Lead Generation process.
Typically this means a combination of Targeted Outbound + Authority Voice & Speaking + Conferences.
Putting together this trifecta every quarter delivers repeatable lead generation activity that yields to consistent top-of-funnel leads.
Even better, once the repeatable lead generation process is working, it can be quickly amplified by hiring 2-3 sales-focused team members to implement the strategy so that the founder can focus on the qualified leads in the pipeline, further improving the win rate and reducing deal conversion times at higher prices.