Amazon is an ‘excellent case of a company that has an economically fine-tuned engine which effectively serves their goal in a really interesting and thoughtful way’… as long as their future investments pay-off. The excessive free cash flow at Amazon makes it possible to experiment, learn from mistakes, and keep moving ahead… regardless of what shareholders think. However, the business model at Amazon is dependent upon continuous growth. Therefore, a critical question for Amazon is; what is the future growth potential?
- Continue to identify new growth opportunities.
- Continue to re-invest profits into the business.
- Continue to use ‘every single last penny’… to do just that.
Growth vs. Profit (2:30)
The crucial transitions that turns a startup into a sustainable business.
NOTE: video starts & stops at pre-assigned times
Key Performance Indicators (KPI’s)
The measures selected (monitored) on business performance, must be ones that are most relevant for a specific startups individual business conditions. However, the challenge is; how to decide on the most relevant metrics?
What are the critical KPI’s your startup needs to monitor regularly?
If you’re in a e-commerce business, the most critical KPI’s might be conversion rate (how many visitors are converted into customers), or retention (how many people converted actually remain active customers for a defined period of time). For a food retail company, a critical KPI might be; sales-per-square-foot (square meter) of shop space.
It is essential that the KPI’s selected (and monitored), must be ones that are most relevant for a specific startups individual business conditions.
The vehicle to tell the story of your organization’s strategic performance.