{"id":446,"date":"2025-02-07T01:41:26","date_gmt":"2025-02-07T01:41:26","guid":{"rendered":"https:\/\/hyperhq.com\/?post_type=insight&p=446"},"modified":"2025-06-20T13:53:52","modified_gmt":"2025-06-20T03:53:52","slug":"easy-startup-evaluation-metrics-you-should-know-about","status":"publish","type":"insight","link":"https:\/\/hyperhq.com\/insights\/easy-startup-evaluation-metrics-you-should-know-about\/","title":{"rendered":"Easy Startup Evaluation Metrics You Should Know About"},"content":{"rendered":"

As an umbrella statistic, 9 out of 10 startups fail. In this unfortunate 90%, construction and information-based startups tend to have the lowest success rate.<\/p>\n

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These businesses can be run by driven, knowledgable founders \u2014 however, if the product presented to the market (no matter how innovative or well designed) isn\u2019t desired by users, then it\u2019s destined for failure.<\/p>\n

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\u2018Every optimistic entrepreneur needs a dose of reality now and then. Cold statistics like these are not intended to discourage entrepreneurs, but to encourage them to work smarter and harder.\u2019 \u2014 Neil Patel<\/p>\n<\/blockquote>\n

So what is it about the 10% that investors snap up? Why are their products so valuable when pitched to VCs and users?<\/p>\n

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Let\u2019s keep it simple today and go over three easy startup evaluation metrics you should research and consider discussing when engaging interested parties.<\/p>\n

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  1. Growth<\/strong>: if a startup is showing growth, then it\u2019s evident their product is the solution to a marketplace problem. Even if this is a simple perception the product is addressing a niche gap, it\u2019ll still lead to growth and customer sign-ups. This is really important in Seed or Series A startups. <\/strong>Focusing on growth shows you\u2019re really in tune with your customers\u2019 needs and align your business with them, adjusting your product as they change.<\/li>\n
  2. Churn<\/strong>: once you\u2019ve established growth or customer acquisition (CAC or other growth metrics), it\u2019s time to hone in on what your users are doing. If they\u2019re cancelling or not renewing their subscriptions, or unsubscribing it can be the symptom of a deeper issue within your product. Maybe your product didn\u2019t deliver as promised or your product\/ market fit isn\u2019t right. Customer churn, revenue churn and net churn are great metrics to measure this level of activity within your company.<\/strong><\/li>\n
  3. Gross Margins: <\/strong>If your company is growing fast and has a negative net churn, things are looking good! However, as time progresses, venture capitalists want to be sure of the return on their investment and not just subsidising a startup\u2019s customer indefinitely. Eventually, the business model and profit margins become more important. The gross margin measures a company\u2019s net sales revenue minus the costs of goods sold. <\/strong>The higher the gross margin, the more capital retained \u2014 looking much better to investors needing to see a return.<\/li>\n<\/ol>\n","protected":false},"excerpt":{"rendered":"

    As an umbrella statistic, 9 out of 10 startups fail. In this unfortunate 90%, construction and information-based startups tend to have the lowest success rate. These businesses can be run by driven, knowledgable founders \u2014 however, if the product presented to the market (no matter how innovative or well designed) isn\u2019t desired by users, then […]<\/p>\n","protected":false},"author":7,"featured_media":0,"parent":0,"menu_order":0,"template":"","meta":{"_acf_changed":false},"categories":[],"tags":[],"class_list":["post-446","insight","type-insight","status-publish","hentry"],"acf":[],"_links":{"self":[{"href":"https:\/\/hyperhq.com\/wp-json\/wp\/v2\/insight\/446","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/hyperhq.com\/wp-json\/wp\/v2\/insight"}],"about":[{"href":"https:\/\/hyperhq.com\/wp-json\/wp\/v2\/types\/insight"}],"author":[{"embeddable":true,"href":"https:\/\/hyperhq.com\/wp-json\/wp\/v2\/users\/7"}],"wp:attachment":[{"href":"https:\/\/hyperhq.com\/wp-json\/wp\/v2\/media?parent=446"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/hyperhq.com\/wp-json\/wp\/v2\/categories?post=446"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/hyperhq.com\/wp-json\/wp\/v2\/tags?post=446"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}