In my experience, growth charts are the single most important tool for startups.
At my previous startup Staffjoy, I chose “people scheduled per week” as the core metric of our business because we built workforce management software. I coded a quick dashboard into our app and set it as the homepage of our internal admin site. When users tested the application, we watched the graph grow as they scheduled workers. When we raised venture capital, we featured the chart as a prominent slide in our pitch decks. When it flatlined and began to fall, I showed the growth chart to the team as I explained the decision to shut down the company.
Today with Moonlight, a growth chart was one of the first pieces of software that we built. We track our net revenue because it measures the value we create as a two-sided marketplace. As we launch a referral program this week, it will also keep us real about whether the model is generating business for us. We reference it every day to understand the overall health of the company, and to understand whether our efforts are resulting in growth.
A good growth rate during YC is 5-7% a week. If you can hit 10% a week you're doing exceptionally well. If you can only manage 1%, it's a sign you haven't yet figured out what you're doing.
A growth chart shows the company’s key metric as a week-by-week chart, from zero to today. If the line looks like a hockey stick, the company is succeeding. If the line is flat, the startup isn’t growing. At the core, a startup’s whole job is to increase the metric in this chart.
All parts of the company should feel like they can affect the growth chart. If a salesperson closes a deal, it should change the data. If engineering launches a feature that is popular, the growth chart should validate that. If it’s launch day, the growth chart should show whether the upvotes on other sites signal product/market fit.
By aligning the company on improving the growth chart, you create transparency and honesty. You can reinforce this by celebrating growth milestones instead of fundraising announcements. It reframes venture capital as an opportunity to further growth, rather than an external validation that the company is succeeding.
Pick a core metric
It is vital that early startups choose the one or two key metrics it will use to measure success. Founders should choose what to do based on how the task will impact those metrics.
The core metric should align incentives between users and the company. When in doubt, the core metric should be revenue because money does not lie about traction. The downside of tracking sales is that it may take many weeks to affect the chart, mainly if you offer a trial period.
Examples of core metrics:
- Facebook measures daily active users, which tracks both engagement and advertising audience.
- Medium tracks total time reading instead of page views, which prioritizes long-form content over memes.
Keep it simple
Track one core metric - it will be easier for everybody to understand. Spend engineering time to make a useful growth chart, and reference it often. You may even choose to make it public, like NomadList. If you’re looking for a tool, Metabase is a free app that can hook into your database and generate charts without code.
It’s important that the graph is as real-time as possible so you can make accurate decisions. When an event occurs in your app that affects the chart, whether it’s a paid invoice or a new sign-up, the graph should reflect it automatically. This feedback trains the team to take actions that affect growth.
Growth charts create honesty within startups. They teach employees - including founders - to focus on things that matter for the long-term health of the company. Following data is hard because it shows your weaknesses and tribulations. However, it keeps you honest about the health of the business, and it enables you to react immediately to problems such as stalled growth. Take the time to create a growth chart for your startup, and integrate it into your company culture to align the team on meaningful growth.