Technical founders are brilliant at building product, but when it comes to sales they often get caught up over-engineering data and creating complicated dashboards that track everything under the sun. 

The result is confusion, wasted time, and honestly, not enough of a data set to make any of it meaningful.

In the early stages founders need to keep it simple when it comes to sales data. The focus needs to be on tracking the things that move the needle and the things that your VCs care about.  But not all data is created equal. In this article I’ll explore what data founders must track, why it’s important, and the mistakes to avoid along the way. 

The three most important metrics to track

For me, the three most important metrics founders should track are:

1. Meeting to Opportunity Conversion Ratio

How many meetings do we have and how many of those are we converting? This helps understand if we have a targeting issue or an ICP issue. Are we having loads of meetings but not converting people to the next stage? Then that highlights a big problem and we can put focus on fixing it.  

2. Opportunity to Closed-Won Conversion

How many opportunities are we creating in a month or quarter, and how many of those translate to converted opportunities? This is a really good signal for product-market fit and for repeatability to help you understand where you can invest X amount of time to create X number of opportunities to then generate Y revenue.

3. Sales Cycle

Your sales cycle is so important to measure because it helps you forecast better. You could have a big pipeline, but if it’s going to take you one year to close, then there’s a problem because you’re not going to generate any revenue this year.

If you know your meeting-to-opportunity conversion, your opportunity-to-closed-won conversion, and your sales cycle, and potentially even ACV as part of that (your contract value, how long it takes to close, and what the contract value is) that will help you forecast. When you join a VC meeting, if you share those metrics and you can show repeatability, that’s what’s going to get them to lean in and keep them interested.

Spotting conversion problems vs. Pipeline problems

Understanding your data helps you identify where to focus your efforts. 

• Conversion – If you have plenty of opportunities but a shit win rate, then it’s a conversion problem. 
• Pipeline – If there’s too few opportunities being created, you have a pipeline problem.
• Sales process – If you have loads of leads and you’re not converting them, then you’ve got a sales process issue. 

And whatever of the above problems you have, 90% of the time, it’s a discovery problem.

Just yesterday I was speaking to a founder who admitted that on a discovery call, he speaks for 80% of the time. When I asked him what happens on the first call, he said, “Oh, I get on a call and I show them the product.” He doesn’t ask them any questions. Literally 90% of the founders I speak to have a discovery problem.

You can have a £1 million pipeline with a 5% conversion rate, but actually it’s more valuable to have a £200K pipeline with a 40% conversion rate. 

It’s better to have less things in the pipeline that you’re spending more time on and qualifying better. Otherwise, you’re just a busy fool.

Building your backward sales plan

The best way to track sales activity metrics is to build a backward sales plan from your number. 

Let’s say you have a million-pound target that you need to hit in 12 months, and you have an ACV of £50K. That means you need to sign 20 customers this year.

Twenty customers divided by 12 months is 1.6 customers a month. Round it up to two customers a month so you can be over target. 

• So how do we get to two customers a month? 
• How many people do we need in a proposal stage? 
• How many people do we need in demo stage? 
• How many people do we need in discovery stage?

Then the backward funnel from the sales pipeline is: 

• What activity do we need to do to get to that point? 
• On average, how many marketing activities do we need to do to create those opportunities? 
• How many outbound emails do we send? H
• How many calls do we need to make? 
• How many partners do we need to engage?

On average in B2B SaaS, you should be converting 30% from opportunity created to closed-won opportunity. 

Once you know what your sales activity looks like, then you just track it in the CRM. If we need to make 50 calls a day, we’ll track 50 calls a day. If we need to send 50 emails a day, we’ll track 50 emails a day. 

That becomes your starting point, and naturally the data will get better over time once you know your conversion rates.

When to add advanced metrics

I often get asked about when to start adding CAC, LTV, and these other metrics. 

To me, that’s relevant when you’ve got at least 50+ customers because it needs time. You can’t track CAC after three months, you realistically need six to 12 months worth of consistency to deliver that data.

If you try to track it too soon and you haven’t done enough activity, the numbers will be skewed and you’ll end up pulling back in the wrong areas. CAC (and other advanced metrics) can be incredibly important, but make sure you implement it at the right time. 

The one thing you must do (and must not do)

The biggest thing you must do is focus on the doing. Focus on being the best salesperson you can be. Focus on doing the actual execution of the LinkedIn activity, emails, calls, content, whatever is part of your plan. 

What you MUST do:

• Focus on actual sales execution and activities
• Be the best salesperson you can be
• Prioritise converting customers over analysing data
• Use your time to upskill in sales fundamentals

What you MUST NOT do:

• Over-engineer data tracking systems
• Create elaborate dashboards with no customers
• Spend more time analyzing than selling
• Get distracted by vanity metrics

The mistake I see a lot of founders make is they over-engineer the data, focus too much on the data, and then don’t do the doing. 

The result is no new opportunities. And when I ask them what they’ve done this month, it’s “Well, yeah, we haven’t had time to do any sales activities this month.”

The Reality Check:

• The data can be figured out later
• You can pay a rev ops person or freelancer to create dashboards
• Focus on six to 12 months of actual sales activity first
• Founders should be doing the gritty work to convert customers

You just focus on the doing. A founder should be the best salesperson in an early-stage business, doing the gritty work to convert customers.

Data & Action

Keep it really simplistic in the early days. 

Measure the data points and activity that are really going to move the needle. Your time is better spent with prospects, customers, building product, or speaking to partnerships than creating elaborate dashboards for data you don’t yet have enough of to be meaningful.

When you can walk into that VC meeting and show repeatability in your core metrics (meeting conversion, opportunity conversion, and sales cycle) that’s what’s going to get them to lean in and keep them interested. Everything else is just noise until you’ve got the fundamentals nailed down.

Author: Matthew Codd

I’m Matthew, I have 15 years of commercial leadership experience, helping VC-backed B2B technology companies scale revenue and transition from founder-led sales.  

I use my experience to help early-stage start-ups with GTM expertise, sales best practice, and hiring insights.  

I co-founded Cosmic Partners in 2022. We are SaaS sales recruitment specialists for VC backed B2B tech companies.