Metrics as a management tool or as a representation of a company's health have advantages, but also have their limitations. They must be chosen and used with a clear understanding of their benefits.
This is why I found it interesting to share here this list of the most common metrics established by Andreessen Horowitz based on their discussions with thousands of entrepreneurs every year. It is interesting here to have the investor's point of view on their relevance and interpretation.
Sometimes, however, the metrics may not be the best gauge of what’s actually happening in the business, or people may use different definitions of the same metric in a way that makes it hard to understand the health of the business.
So, while some of this may be obvious to many of you who live and breathe these metrics all day long, we compiled a list of the most common or confusing ones. Where appropriate, we tried to add some notes on why investors focus on those metrics.
Ultimately, though, good metrics aren’t about raising money from VCs — they’re about running the business in a way where founders know how and why certain things are working (or not) … and can address or adjust accordingly.