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Dos and Don'ts of Sharing Product Metrics Updates with Investors
Updates play a critical role in keeping investors informed. While financial metrics are undoubtedly important, it's equally essential to include product metrics. In this article, we will discuss why it is crucial to include product metrics in investor updates and guide you through the process of choosing the right ones.

Before you start, ensure that your product metrics are meaningful.

The rules are simple:
  • Find the middle ground: Providing too much or too little information can confuse your investors or fail to give them the insights they need. To find the right balance, focus on metrics that provide an accurate picture of the product's dynamics. Be sure to include financial metrics alongside product metrics, as these help investors understand the overall performance of the business.
  • Include only the necessary: Another important rule to follow is to include only the necessary metrics. Use common sense when deciding which metrics to include, and consider whether each metric provides meaning. While growth indicators are important to track, it's also essential to pay attention to indicators that are in decline. By focusing on the most relevant metrics, you provide investors with the information they need to make informed decisions about their investments.

Don’t forget that you have to be transparent in your updates, but don't share irrelevant data. Define your key metrics for yourself and your team so that you can select the most impactful metrics to report on. It's crucial to ensure that your analytics setup has been done correctly. This can be a challenging task, especially if developers are not fond of analytics tasks, so it's important to double-check.

Product metrics have several important functions in investor updates. First and foremost, they provide insights into how the product is performing. By tracking metrics such as user engagement, retention rates, and conversion rates, entrepreneurs can demonstrate the dynamics of their product and identify areas for improvement. Another function is to measure progress over time. By monitoring changes, you, alongside investors, can identify trends and patterns that can inform future decision-making and make data-driven choices that are more likely to result in positive outcomes.

There are several types of product metrics that are particularly relevant for investor updates. Here are some examples:

  • Acquisition Metrics: These metrics measure how users find and sign up for the product. Examples include the number of new users, the cost per acquisition (CPA), customer acquisition cost (CAC), and the conversion rate of visitors to users.
  • Activation Metrics: These metrics measure how users engage with the product after signing up. Examples include the number of active users, the frequency of use, and the time to value.
  • Retention Metrics: These metrics measure how many users continue to use the product over time. Examples include the retention rate, churn rate, and customer lifetime value (CLV).
  • Revenue or Monetization Metrics: These metrics measure how much money the product is generating. Examples include the revenue per user (RPU), the average revenue per paying user (ARPU), and the total revenue generated by the product.
  • Engagement Metrics: These metrics measure how users are interacting with the product. Examples include the number of sessions per user, monthly, weekly, and/or daily active users (MAU, WAU, DAU), the time spent on the product, and the user engagement score.
Overall, including a variety of product metrics in investor updates is essential for demonstrating the performance and potential of the product. Don’t forget that there’s no single solution or set of metrics for everyone, use only these metrics that are relevant to your team and your investors.

So what should you share or not share with investors? Yet again, choose what is relevant. You can try dividing your report audience into groups:

  • Investors: Share product metrics that directly impact revenue, such as conversion rates, customer acquisition costs, and customer lifetime value. Share metrics related to user engagement, retention rates, and product adoption. Avoid sharing sensitive data that could jeopardize the company's competitive advantage.
  • Potential Investors: Share high-level product metrics that demonstrate progress and growth, such as user acquisition, retention rates, and engagement metrics. Use product metrics to showcase the company's value proposition and unique selling points. Avoid sharing sensitive data until an NDA is in place.
  • Partners: Share product metrics that show how the company's product is driving value for their customers. Collaborate with partners to identify product metrics that are mutually beneficial to track. Avoid sharing confidential information.
  • Accelerators/Mentors: Share detailed product metrics that highlight areas of improvement and opportunities for growth. Share metrics related to customer churn, retention, and satisfaction. Seek feedback and guidance on how to improve product metrics and drive growth. Avoid sugarcoating metrics or hiding areas of weakness.

As a reminder, the focus of this article is product metrics in investor updates. Investor updates are essential to keep investors informed about the company's progress, provide transparency into its operations, and can help attract potential investors. Don’t forget that product metrics are just as crucial in providing insight into how users are interacting with the product. Product metrics are a great tool for showcasing value propositions and unique selling points.

In conclusion, product metrics are an important component of investor updates, providing valuable insight into user interaction and progress towards key goals. By finding a middle ground between providing too much or too little information and sharing the right metrics with the right groups, companies can make informed decisions, measure progress, and provide valuable updates.

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