What data should you use to inform your scaling decisions?

1 Product-market fit

One of the first data sources that you should use to inform your scaling decisions is your product-market fit. This is the degree to which your product satisfies a strong market demand and solves a real problem for your target customers. You can measure your product-market fit by using various methods, such as surveys, interviews, net promoter score, retention rate, churn rate, and referral rate. These data points will help you understand how well your product meets your customers' needs and expectations, and how loyal and satisfied they are. You should use this data to validate your value proposition, identify your core features, and prioritize your roadmap.

3 Customer acquisition cost

A third data source that you should use to inform your scaling decisions is your customer acquisition cost (CAC). This is the average amount of money that you spend to acquire a new customer through your marketing and sales channels. You can calculate your CAC by dividing your total marketing and sales expenses by the number of new customers that you acquired in a given period. These data points will help you understand how efficient and effective your customer acquisition strategy is, and how much you can afford to spend to acquire a customer. You should use this data to optimize your marketing and sales funnel, test and measure your channels, and allocate your budget.

4 Customer lifetime value

A fourth data source that you should use to inform your scaling decisions is your customer lifetime value (LTV). This is the average amount of money that you expect to earn from a customer over their entire relationship with your product. You can calculate your LTV by multiplying your average revenue per customer by your average customer lifetime. These data points will help you understand how valuable and profitable your customers are, and how much you can invest to retain them. You should use this data to improve your product quality, customer service, and loyalty programs, and to increase your upselling and cross-selling opportunities.

5 Unit economics

A fifth data source that you should use to inform your scaling decisions is your unit economics. This is the difference between your LTV and your CAC, or the profit that you make from each customer. You can calculate your unit economics by subtracting your CAC from your LTV. These data points will help you understand how sustainable and scalable your business model is, and how much cash flow you generate. You should use this data to monitor your profitability, breakeven point, and return on investment, and to adjust your pricing and cost structure.

6 Growth rate and trends

A sixth data source that you should use to inform your scaling decisions is your growth rate and trends. This is the percentage change in your key performance indicators (KPIs), such as revenue, customers, users, or transactions, over a given period. You can calculate your growth rate by dividing the difference between your current and previous KPIs by your previous KPIs. These data points will help you understand how fast and consistent your growth is, and how it compares to your goals and benchmarks. You should use this data to track your progress, identify your growth drivers and bottlenecks, and forecast your future performance.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?