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If I could only pick one metric for a business, I'd go with net revenue. Otherwise it's an expensive hobby.
by nathan_long 8y ago
If I could only pick one metric for a business, I'd go with net revenue. Otherwise it's an expensive hobby.
- jiveturkey 8y agoDid you read TFA? This is for pre-revenue companies. The expectation is that se will turn into revenue in many tech business models. Certainly for the type where you have to capture a dominant fraction of users to get the hockey stick curve.
- CamTin 8y agoLike most business talk on HN, this is about YC-style startups that are expected to lose a lot of money up front in exchange for a ticket in a lottery where the winner is the next Facebook.
- nathan_long 8y agoGood point. And the fact that it's posted by a VC might have something to do with the content of the advice.
- nkkollaw 8y agoI guess YouTube, Twitter, and Facebook are expensive hobbies? They not only didn't make money, but literally lost millions for years.
- jjeaff 8y agoOf those 3, YouTube might actually be a very expensive hobby. It is purported to still be unprofitable.
- nishantvyas 8y agoit depends. Are you raising the chicken for egg or meat? Egg is about sustainability... meat is about growth (very fast)...
- tzm 8y agoRevenue is a reflection of market value, not an intrinsic measurement. Measuring the unit economics should capture more of the intrinsic metrics that generate revenue. This would then be the essence of a company's North star metric.
- dirtyaura 8y agoNot necessarily. In my opinion, core metric should be a proxy for the value the product provides. For example, for us at https://ouraring.com https://ouraring.com, people buy the ring before using the product. Tracking revenue only would not reveal problems in the long-term benefit of the product - it would be more like a proxy for marketing actions, not for the core product benefit.
- longerthoughts 8y agoBut the parent was picking one metric to measure the health of a business, not a product. If you choose to measure the health of your business by the quality of your product, aren't you just creating a potentially misleading proxy? Good products hardly guarantee the success of a business.
- maneesh 8y agoFrom another wearable founder [1] to you, congrats on making a great product! I'm wearing the new steel Oura right now. Although the firmware update this week broke it for me on android :( Still my favorite heart-rate enabled wearable out there! [1] https://pavlok.com https://pavlok.com
- dirtyaura 8y agoThanks! (I’m CTO, SW at Oura, but not an Oura founder). New firmware and Android release coming soon that likely will help with your issue
- atupis 8y agoHow you track that value?
- ma2rten 8y agoThen you must love Uber, since you only care about revenue and not costs.
- maneesh 8y agoNet revenue often refers to net profit, meaning revenue minus expenses.
- mikemotherwell 8y agoNet revenue CHANGE might be the one metric that makes sense. The reason to track any metric is to know if you should continue, stop, or go all-in. If you are flatlining - or going down - that's a HUGE sign to quit. If you have steady growth, easy as she goes. Explosive growth, you might want to double down.