This will be my last blog post before the Christmas season. I have been working on some thoughts about the challenges facing the startup and SaaS ecosystems. Especially here in Scotland. However, it seems churlish to share those. So I am saving it for the New Year and talking about reasons for celebration instead.
 
The picture above is of one special celebration. Mallzee opened their new office (also home to Appointedd) last Friday. Scottish Finance Minister John Swinney and Royal Mail Group CEO Moya Greene were kind enough to perform the official duties. Both also spent time talking to the teams and hearing about the amazing progress the company has made. Transforming the fashion shopping experience through mobile. As you can see the view is pretty cool as well!
 
The best part of the whole startup experience is working with great teams. I sit on the boards of 5 companies. The founders, the marketing guys, the engineers and the software geeks are all there. I am also lucky enough to spend time with lots of other startups. Fun people working to build awesome products. Teams are what make business success. They are also what gets me out of bed every day. 
 
A special element with these guys is watching them grow. When I reflect back on the past year I can see so many people who have developed new skills. Built confidence. Extended their talent. I know there is plenty more to come in 2016. 
 
Let me also pick up on those awesome products. Most of the companies I talk to have B2B SaaS products. Between them they could transform almost every aspect of business. For every size of company from family stores to multi-nationals. I also see great work being done for areas like healthcare and education. Outside the commercial sphere in the UK but still a focus for innovation. 
 
My only regret this year has been lack off time. There is so much going on. And so many fantastic opportunities to work with extraordinary founders. I have had to turn down a couple of wonderful startups this year. I wish them all well. Being split for choice is fun but painful sometimes.
 
Great teams, awesome products, more opportunities than time. Scotland is a pretty good place to be right now. We have the ingredients for a world beating startup ecosystem. And it is all set in one of the most amazing places on earth to live and work.
 
It is impossible to do justice to the beauty and tranquillity. Home to some of the wildest country and coasts in Europe. Our cities are friendly, efficient and buzzing with life. Scotland is home to some of the finest natural produce you will ever find. The best thing you can do in 2016 is come and see for yourself. You will be most welcome.  

How well do you understand your data? If you run a SaaS business you better have a good answer to this question. Its a truism but SaaS is all about data. Every step of the process is measured and tracked. Pipeline metrics. Growth metrics. MRR v ARR. LTV/CAC ratios. And all the rest. It is a are week when no-one posts a new measurement idea critical to SaaS success.
 
Many blogs and analyses are published by those who believe this enables a goal setting culture. Set the right targets for key metrics. Build sales and customer success teams that are accountable for those objectives. Establish clear quotas and incentives. Drive the business culture by focus on the right results and you will succeed.
 
This approach is favoured by a lot of entrepreneurs and investors with more experience in the startup world than me. Yet I think there is a different, better way. For me metrics are the voice of your business. Most important that also makes your numbers the voice of your customers. I prefer to listen to the data. Learn from what it tells me. And improve your SaaS using that knowledge.
 
The only trouble with this philosophy is that many people don’t know how to listen to their data. Even those with great numeracy and technical skills. Using and understanding metrics is a different skill from doing the calculations. You can read a fascinating and moving article about the common mistakes at “Beginner’s Guide To Data Based Thinking”.
 
So when you are faced with a mass of SaaS data, what can you do to understand what those metrics are trying to tell you?

• Focus and Prioritise. You need to pick out the numbers that are most important. This will vary according to the stage of your SaaS business. Growth in MRR is essential in the early days to get things off the ground. LTV is a better indicator of long term sustainable value. 
• Identify Patterns. As your SaaS grows you will have more data points to support each measure. Now the trends and direction will start to become clear. For example, LTV may be variable to begin with because your business has little churn. Once a pattern is established you can use this to identify areas to improve.
• Exceptions. Patterns are easy to spot once you have enough data. Exceptions are harder. Which point on the graph is an oddity and which a warning of danger ahead? Is one different data point an isolated example or the start of a new pattern? You can use ranges, bands of expected outcomes to help see the true exceptions. This helps narrow the field but can also make you blind if the range is wrong.
• Ask Questions. The most important key to listening. Metrics are a means to ask the right questions. No single number tells you the right decision to make. But any pattern or exception can lead you to a valuable truth. Your metrics are a way to probe and explore. Ask your team. Ask your customers. Ask your mentors. Find out more about the problem. 

 
Metrics are a gift for any business. We are lucky in the SaaS world that so many data points are available. The numbers are a guide to many unknowns. They can provide a picture of customer behaviour. Buying intentions. Churn signals. Growth trends. They can show the strength and weakness of every business. 
 
Learn how to use your metrics. Listen to them. Ask the right questions. Make better decisions based on the answers. Build a constant cycle of learning and improvement.