Identifying, tracking and sharing the right metrics is at the heart of Monday.com's rapid growth and ability to scale, the company's co-CEOs said in a SaaStr webcast last week.
The cloud-based project management software company has grown to 110,000 customers and 650 employees in four countries in half a dozen years by iterating everything they do on the basis of measured performance.
Rather than wait until they've perfected a product rollout, for example, the company goes to launch as soon as a product can be deployed and then makes improvements as feedback comes in, both from users and company metrics.
"We're not building airplanes or skyscrapers," Roy Mann, co-CEO and co-founder, said. "If you take three months to build something, [everybody weighs in with their opinions], so no one gets what they want, and when it fails, you don't know why."
The move-fast-and-iterate model underlies much of the company's actions.
It collects, stores and processes in-house all of the data it generates as a software-as-a-service (SaaS) company, rather than use a third-party application like Google analytics, and makes all of the data available through dashboards. That way every employee sees the same thing.
"It's not just management; everybody knows what's going on," Eran Zinman, co-founder and co-CEO, said. "We're harnessing everybody's intelligence to [improve] the company."
Widespread data availability also applies to internal business performance, which is typically managed by the finance and accounting teams. That means all employees see the company's revenue numbers, bank balances, burn rate, churn, marketing numbers and other money metrics.
The one exception is employee compensation, which is kept confidential.
"It's created a very strong feeling of ownership, the feeling we're all aiming in the same direction," Zinman said. "No one can say, 'I think this should be done in a specific way because I know the numbers.'"
Collecting, tracking and managing its own data and then making it widely available is something the company has done from the beginning and has helped create an environment in which employees are comfortable giving feedback.
Feedback extends to meetings and presentations; employees are asked their views on how well a meeting went or on the effectiveness of a presentation to help everyone improve their performance.
"We didn't do this enough at the beginning," Zinman said. "People were not hearing what they needed to hear. That led to frustration. Now there are no surprises."
The company must carefully think through metrics upfront, otherwise teams risk measuring and responding to the wrong thing.
"Finding the KPI and agreeing on what is success is crucial," said Mann. "it's not just having a KPI."
Onboarding vs. sign-ups is a good example. If a team just measures product sign-ups, it can be led into thinking it's achieving success when it's not. A more accurate KPI is the number of users who return three days after signing up. That suggests users weren't put off by the onboarding experience and are committed to using the product
"No one can hack that," Mann said. "There has to be value to come back and actually start."
It's not uncommon for the company to spend three weeks identifying the metrics it wants to follow to know how well something is working.
"You need to really say, 'If that thing moves, then we agree this is a success,'" Mann said. "The goal is to set a KPI that you trust."
The company also looks for help externally, reaching out to CEOs and CFOs of other companies. "If we're too focused on ourselves, we get sucked into the day-to-day," Zinman said.
For the company to profit from outside advice, though, it has to understand the point of view of those offering it.
"What background are they coming from?" Zinman said, describing it as "debugging the reason" behind the advice.
Change as default
The result of all the feedback is change, the two executives said. Especially when things are working well, for many leaders, the default is to keep going as they are, but that's when companies need to try something different.
"Not making a bet is riskiest, because it blocks future opportunity," Zinman said.
The company changed its name, for example, just as its growth was taking off, because it knew the name — DaPulse — wasn't suitable for a larger scale company.
"The domain was available for $9.99," said Zinman. "We were growing fast, around $15 million annual recurring revenue, but we were getting negative feedback on the name. We said, it looks hard to do this now, but it was probably the best decision."
Another change was adding a sales team, something they hadn't relied on for their first several years. Their biggest clients told them they wanted to work with the same contact for all their interactions with the company.
Before they made the decision, they processed internal and external feedback and then decided to buck the commission-based model used by most companies in favor of a salary model.
"We wanted them to have the same objectivity as the customer," Mann said. "not try to drive up sales, but what's best for customers."