Should growth work be measured and directed by upstream input metrics rather than downstream output metrics like ARR?

Harry Stebbings · Sep 23, 2022

Founders over-focus on MRR, which is an output; they should focus on the inputs that drive it, like seat expansion and number of new projects

MRR is the output; the inputs are what actually drive it

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Harry Stebbings · Jan 18, 2023

Revenue is an output, not an input, and therefore a poor choice of North Star metric

Inputs like sessions created or referrals made are what drive revenue; revenue is the result

Scope: framed as debatable — 'we can have a debate on it'

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Phil Carter · Sep 20, 2024

The most common mistake in setting growth metrics is focusing on output metrics like ARR, MRR and subscribers instead of the upstream input metrics that actually drive them

Outputs like ARR are what boards and CEOs care about, but only input metrics such as signup rate, activation rate, trial start and trial conversion rate can actually be acted on by initiatives; the growth leader's job is to connect the individual initiatives to inputs to outputs

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Imran Khan · Aug 26, 2024

China is hard to invest in right now and allocators should wait until regulatory policy becomes visible and consistent before committing more capital

Valuation is driven by consistency and predictability, and Chinese regulation currently offers neither

49:28 Wait for regulatory consistency before committing more capital to china

Harry Stebbings · Dec 6, 2023

Value-based metrics such as transactions per customer, weekly usage and card spread within orgs in the first thirty days are the most valuable metrics to track

They reveal net revenue retention and usage over time, whereas new logo counts can move up or down and say much less

29:22 Usage depth metrics beat logo counts as growth signal

Harry Stebbings · Sep 20, 2024

The biggest mistake he sees as an investor is growth teams being told to focus on revenue, when the actual driver is seats per contract, so growth work should target product changes that increase seats per contract

Revenue is downstream; per-seat contract size is what drives total revenue

19:03 Seats per contract not revenue is the real growth driver metric