Your Startup Efficiency Checklist

By Liam Nolan, Head of Growth at Founders Factory

1. Perfect your customer targeting

Truly knowing your customer has never been more important. The less well you understand your target audience, the broader your product will be—and no matter how good your creative is, you’re wasting money.

Getting to know your customer really fits into two buckets:

Quantitative—desk research, test ad campaigns, SEO and keyword research

Qualitative—getting out into the wild, speaking to people, understanding their pain points

2. Increasing value is as important as cutting costs

With efficiency, founders too quickly focus on cutting costs. But there’s a reason why people talk about Lifetime Value (LTV) alongside Customer Acquisition Costs (CAC)—the value side of the equation is just as important.

Improving customer value comes down to product market fit. Is your product/service solving a real problem and is it 10x better than the alternative? If it is, you can be confident in charging a higher price, more often, and for a longer period of time.

3. Pin down the metrics that are most important to you

If you really want to understand how efficient you are, tracking and analysis is pivotal. But unless you know what you want to track, you’re wasting time and effort.

LTV:CAC ratio is the metric all other KPIs should feed into. If your average customer yields more than you paid for them, you’ve got a viable business.

Understanding how each metric impacts LTV or CAC is important—including average order value (AOV), conversion and churn rates, and cost of traffic.

You may have heard people talk about avoiding vanity metrics. These are essentially metrics that you can’t confidently attribute to impacting either CAC or LTV.

4. Consider how you are attributing success

Now, nailing down your metrics is the first step—understanding how to track them and attribute success is the next, more complex step. The iOS14 update and the ‘cookie apocalypse’ has made this much harder—but even before this, startups struggled to see the full picture.

There are third party attribution tools, like Triple Whale, that can really help here; as can uplift tests (to predict how each customer is likely to respond to a marketing action and post-conversion surveys).

5. Prioritise processes objectively

There’s a simple framework for assessing the best levers and processes to prioritise—the ICE framework:

I for Impact—how big is the potential impact of this on KPIs?

C for Confidence—how certain are you that it’s going to work?

E for Effort—how much effort is required to get this to work?

For each, rate out of 10 and give it an accumulated score of 30. That will help you to know the most efficient ways to move forward.

6. Automate, automate, automate

It would be foolish not to mention the hundreds of tools at your fingertips to help you automate and accelerate processes across all stages of the growth funnel. New products in AI are being launched on a daily basis, so keep an eye open for tools that can really help you step up your output.

Here’s a glance at some of the tools we use at various stages in the funnel.