What are the key innovation metrics that attract investors?

Revenue growth is important, but the ability to control costs and cash is also important. This isn't the day of Amazon or Uber where building a brand at all costs and suffering monumental losses would was tolerated by investors. The capital markets are tight now and delivering results, both top and bottom line are crucial.

💡 Based on my experience, revenue growth must be dissected to reveal innovation's role. 📊 Growth Quality Examine if growth stems from sustainable innovation or one-time gains. 🔍 Market Share Expansion Measure how innovation extends market reach compared to rivals. 💡 New Market Creation Assess revenue from markets or categories created by innovation. 📈 Profitability Impact Determine how much innovation contributes to margin improvement. 📌 Innovation should show in diversifying and solidifying revenue streams.

I would tend to disagree. Corporate world would be a better landscape if we focus on 'Growth of innovation' vs. 'Innovation of growth'. By focussing on revenue, we are opting for the latter - merely testing ourselves on the 'end' and not the 'means'. Innovation is all about means. Investors are looking for ideas that redefine the way we do business and that comes from creative ways of doing business. So, opt for ground-breaking ideas, that's true definition of innvotion; revenue will follow.

We at NovaLex Consulting, no longer take on "branding" efforts as promotional initiatives only. Promotional efforts drive a brand promise but the brand experience becomes a measure for the customer to assess quality: if promise = experience, then customer satisfaction is achieved. And, just like advertising metrics, experiences can be measured, ie, statistical process control measures. Customer satisfaction is the sole leading indicator for future sales (if you're a Balance Scorecard company).

As a Chief Revenue Officer and Sales executive, it is critical to have processes in place to not only track, but also measure true customer satisfaction. One way of doing this is through frequent customer surveys, focus groups, voice of the customer and utilizing a "Net Promoter Score" survey. We need to understand where our customers hearts and minds are to better define if we are exceeding their expectations. Customer satisfaction is the driver of future market-share growth and this needs to be continually measured.

With increased innovation there should possibly be a natural reduction of operating costs which inturn should be fuelled into further innovation. Customer satisfaction would come naturally.

To attract investors what organizations need is a self-regulating, evidence-based innovation pipeline. There are 5 key elements that cannot be missing (The first one is my favorite): A team of experts: Investors look for teams with a combination of technical and business skills. Moreover, the presence of a leader who has already demonstrated ability in product, process, and service innovation on the markets would increase investor confidence. Then a solid business model, a working prototype, a marketing plan to show how the innovative idea will reach the market, a financing strategy. Innovation requires a rigorous process. Investors are very skilled at intuiting whether a company has a ‘simple complexity’ as I like to say

The range pf innovations and also applicability across domains and how easily the innovations can be scaled up or built upon also have a multiplier effect on the innovation pipeline itself.

In the world of attracting investors, the innovation pipeline stands as a pivotal metric that commands considerable attention. It mirrors an organization's innovative prowess and future promise. Investors are naturally drawn to companies boasting a well-defined and diverse innovation pipeline, highlighting a consistent flow of new ideas and products under development. Key metrics encompass the number of active projects, successful milestones reached, and the efficiency in translating concepts into reality. A dynamic and flourishing innovation pipeline serves as a beacon of adaptability, resilience, and an unwavering commitment to staying ahead of the competition. It holds substantial sway with investors seeking long-term growth prospects.

Innovation is a state of mind and cannot be led by single efforts, it is always communal success complemented by inner and outer motivators. In a place with no tolerance for fault or a testing space,even the most successful talent and the best idea ever are prone to fail.

Investors may scrutinize how deeply ingrained the culture of innovation is within the company. They may look at R&D spending, patent filings, the track record of product or service innovation, employee training programs, and leadership's commitment to innovation. They will also evaluate whether this culture leads to actual results, such as revenue growth from new products or services and the successful entry into new markets.

¡La cultura de innovación es como la salsa secreta que hace que tu empresa destaque en el mundo de los negocios! Imagina que es el ingrediente especial que hace que tus ideas brillen y tu equipo se esfuerce al máximo. Los inversores no solo quieren ver números en una hoja de cálculo; también quieren saber que tu empresa es un lugar emocionante y creativo donde las grandes ideas florecen. Medir la cultura de innovación no es solo mirar números, ¡es sumergirse en la experiencia! Puedes hacer encuestas para conocer cómo se sienten tus empleados sobre la innovación, hacer entrevistas para descubrir las historias detrás de las grandes ideas y evaluar cómo tus prácticas cotidianas fomentan la creatividad.

Everything Takes Time. Be Patient But Consistent The sustainability and long-term scalability of the innovation impact are the ignored aspects of this. The innovation paves the way for long-term change and ongoing advancement. The key components involve assessing the innovation's long-term impact, its capacity to promote continuous development, and its capacity to change in response to new requirements. Emphasizing flexibility and sustained impact, you can show that the innovation is successful now and has the potential to improve the business, community, and environment over time. Everything takes time. Be patient but consistent.

Growth starts at home. Company culture and accountability are primary drivers of organizational growth. Investing in your staff, creating a team (not a family) environment and listening to positive criticism and clear and transparent communication. Don’t worry about investing in staff and have them leave, worry about not investing in staff and have them stay.

por ejemplo, para el caso de una empresa de tecnología que implementa una nueva plataforma digital que mejora la eficiencia operativa y reduce los costos en un 20%. El impacto financiero positivo que genera se verá reflejado en un aumento significativo en los márgenes de beneficio y una mayor rentabilidad para los inversores.

An innovation metrics dashboard is a vital tool for attracting investors. It provides real-time access to key indicators such as R&D investment, time-to-market, project success rates, and intellectual property filings. This transparency showcases a company's commitment to innovation, instilling confidence in its ability to excel in a dynamic business landscape. Investors value the data-driven approach, making an innovation metrics dashboard a compelling factor in their investment decisions.

Employee education is one of the key lead metrics to be included on this dashboard. Knowledge is a crucial prerequisite for innovation, thus it is important to see and show the share of employees with PhD and master degrees. Growth, culture, cost efficiency etc as lag metrics, will follow the lead of employee capabilities.

Research and Development Spending as Percentage of Sales- gives insight into the company's commitment to innovation. Time to Market- tracks the duration from concept development to product launch, which is crucial for understanding innovation process efficiency. Innovation Pipeline Strength- assesses the number and value of projects. It offers a view into the prospects of the company's innovation efforts. Customer Innovation Adoption Rate- measures how quickly customers adopt new products or features and the market's response. Return on Innovation Investment- calculates the financial return from innovation investments. Employee Innovation Engagement- tracks employee involvement in innovation initiatives.

As said by Corrado Patierno, two key points could be added. 1 - Great humility of the founder. No one invests with those who have the chance to be better than you (if you are better why are you looking for my money?). 2 - Founders must Work Hard, and when they have stopped working, they must still work with investors.

Customer acquisition cost (CAC): CAC is the cost incurred to acquire a new customer. Customer lifetime value (CLTV): CLTV measures the value a customer brings to a company over their entire relationship. Market traction: such as a growing customer base, positive user feedback, or significant market demand. It's important to note that the specific metrics and priorities may vary depending on the investor's industry focus, investment strategy, and individual preferences.

One of the things that I have found to be extremely valuable when helping to attract investors to acquiring a business, is the growth of "Reoccurring" revenue. Valuations are significantly higher when a business has a larger percentage of their revenue that can be defined by "Reoccurring" revenue. This helps to mitigate risk and ensure greater consistency in the growth strategy.