Startup Metrics: Why Early Stage Companies Should Measure Hugs Instead of Revenue

By Ehtan S. Auston - Last Updated December 6, 2011

GiveForward Hug Fest

The following is reposted from the Startup America website.  

January 1st, 2012 will mark the three year anniversary of our absolute lowest point at GiveForward. On January 1st, 2009 we had exactly one visitor on our website.

One. Stinking. Visitor!

It was depressing. We had launched the website six months earlier and our traffic volume was seemingly going backwards. Come to think of it, that whole first year was kind of depressing from a numbers standpoint. We only generated $6,000 in revenue for the entire year and all of our metrics were pretty damn terrible.

So what did we do to keep our spirits up during the first year? Well, we simply decided to create new metrics. We stopped measuring our progress by traditional metrics like revenue, user growth and website traffic, and instead started measuring our progress by the number of virtual hugs we got from our users. A virtual hug was any time a user would write an email thanking us for creating the website. They didn’t come very often but when they did come they were incredibly powerful and touching. These emails would say things like:

“My brother is fighting cancer and thanks to your website, we were able to raise $5,000 for his treatment. Thank you so much! We don’t know what we would have done without GiveForward.”

Those virtual hugs kept us going because they gave us a glimmer of light during a year filled with self doubt. From these hugs, we knew we were building something important — something that was going to change peoples’ lives, and so we became relentlessly dedicated to solving this problem.

We kept hustling and eventually we put ourselves in a position to catch a few lucky breaks. But it took us two years of bootstrapping without salaries before we got to that point! So if you’re in your first year or two at your startup and you feel like you’re on the verge of something great, but your metrics tell you otherwise, my advice is to keep plugging away. In all likelihood, your startup isn’t failing. You probably just need to change your metrics and start measuring hugs instead.

Oh, and by the way if you’re wondering why I was sporting such an epically terrible mustache in the video, here’s why

Ethan is business graduate, who talks about gadgets, technology and startups. He's an exception track record in content creation and readers engagement and have been previously contributing to HBR, INC, Entrepreneur, and alike.
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