The 5 Metrics to Track in your Education Startup

“Stop, take a step back to look at the bigger picture!”

How many times have you heard this phrase? While it is easy to say, it is very difficult to implement. The task itself can be broken down into 3 parts : taking a pause from the momentum you have gained, move one step backward before moving two steps forward, and don’t get bogged down in the details.

Today’s article is about finding the bigger picture, not by philosophical means but by objectively quantified metrics. Here are the key metrics that EDUpreneurs should continuously measure and assess to chart their path:


No. of students served as % of potential students

Whether you are a B2B, B2B2C, or B2C EDU startup, always know the number of end customers you are impacting. Whether your startup serves a direct or derived need, this metric is one of the best ways to know your relevance in the market and the headspace for growth. If your product can only serve preschoolers learning to read and you find your market too small, you may be able to expand your products to also deal with mathematics for the same demographic would spreading yourself too thin or changing your customer profile.


Average revenue per customer as % of customer’s disposable income

Your potential for revenue expansion depends completely on this metric. To extend the logic of core competency, you should aim to do what you are best at while gaining a larger share of the customer’s pocket. If schools are entering the pre-school arena, they are able to take such a call by using this metric. A customer is always defined as a user who is willing and able to pay for your service. If your user does not have the necessary income to meet your product costs, you may be serving the wrong demographic.


Net customer additions as % of customer base

If you’ve added 10 customers but lost 12 to a base of 100 customers this month, your net customer additions is -2%. The same calculation holds relevance for net revenue addition from new customers as % of revenue base. This will provide a way to focus on the future rather than sitting on past laurels or failures. Always keep this number positive, and search for the why whenever it shrinks.


Average salary as % of average revenue per employee

Invariably, one of the largest proportion of costs in an EDU startup, unlike energy or infrastructure, will be its human assets. It is important that as an EDUpreneur you are able to keep the salary level below revenue level per employee - whether that's either through equity stake, performance bonuses, or other forms of deferred cash benefits. People who are not willing to take much risk with you might not be worth your time, no matter how illustrious their background.


Total cash available by cash burn rate

There are two ways to go bankrupt: either your current liabilities exceed current assets, or you literally run out of cash. Hence, right up there with the saying that customer is king, it can be said that cash is queen. This metric will help you know when is the right time to infuse more funds into the startup: about 3-6 months before the end of the total investment.


While this is not an exhaustive list, it is definitely a good starting point. The metrics have consciously avoided straying into tech domain like CTRs, views, or bounce rate. Ultimately, all these tech metrics are trying to gauge one or the other factor above. They're but means to an end - do not lose sight of this fact.


If you know or have used other such metrics, please share the same in the comment section of this article!