For B2B companies, the key metric should almost always be revenue, not gross transaction value. Focusing on gross transaction value can lead to optimizing for the wrong outcome, as shown in the example of a Neo bank in the Middle East. While their gross transaction value was rapidly increasing, their revenue remained flat because they were signing up larger customers with higher transaction values but offering substantial cashbacks and rebates. This caused the founders to deceive themselves by not focusing on the actual revenue generated.
In this episode of Startup School, YC Group Partner Tom Blomfield discusses one of the most important elements of running any startup: metrics! Tom shares what key metrics to track and how to use them to make the best decisions for your company.
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