Smart KPIs 101 — Part I

Janelle Alexander
3 min readFeb 2, 2023


Photo by Miguel A Amutio on Unsplash

Measure and monitor the right things and returns will increase. But how? Here’s a look into our process and some of our tools to derive smart KPIs. (Spoiler alert: it’s analytical, not guesswork.)

First, the “why.” I write and talk at length about KPIs. The underlying philosophy is: the process many organizations use to define KPIs feels backwards, because it is — KPIs that matter aren’t determined by people…effective KPIs are revealed by data. KPIs derived in this “right” way can’t help but zero in on the critical levers of value for this specific company. That leads to data-driven decision making. In the right hands (I’m assuming, yours and those of your founders), that leads to longer runways, higher cash on hand, efficient use of capital, and, ultimately, revenue and margin growth.

Here are the four essential steps of developing such KPIs: Discover, Analyze, Distill and Implement. With each step, you delve deeper (or “double click,” as I like to call it) to uncover the right KPIs. Track them effectively, and use them like the compass they are to make informed decisions that will lead to increased returns for your portfolio. I’ve included some of our templates too. Today we’ll do Discover and Analyze.

Let’s get started.

KPIs that matter aren’t determined by people…effective KPIs are revealed by data


This is just data gathering. (“just”…lol) You should:

  1. Gather and understand historical financials, financial models, pitch decks, and board packs.
  2. Take stock and review data and files for clarity and gaps.
  3. Take note of questions, missing data, or items needing clarification.

Pro tip: Creating a separate digital space to house files and data for the KPI process — even if already saved elsewhere — minimizes missing information and errors.


Here’s where it gets interesting. You conduct a deep dive on available financial data, and get. into. the. weeds. (And I mean “weeds” — I’d go down to the general ledger if I could get my hands on that data.) You’ll need to:

  1. The “biggests.” Identify the largest and/or most volatile line items, i.e. the largest costs, revenue producers, assets, liabilities, etc. Here’s how we do it 👇🏾
JA | p+a KPI analysis model “G/L Key Accounts — I/S”

2. Question. Reach a granular & practical understanding of the “biggests.” Drill down with questions like: “Which G/L accounts roll into this? How is this calculated? How are customers charged for this product?” Here’s how we do it 👇🏾

JA | p+a KPI analysis model “G/L Key Accounts — Aggregate”

Pro tip: Keep track of “what we don’t know,” and maintain it as a living document. Update & review often.

3. Collaborate. Huddle up — including portCo wherever possible — to discuss and understand the narrative around the “biggests,” to determine which get shortlisted for further scrutiny.

Pro tip: Working thoughtfully through the data together at each step — incorporating insights from portCo wherever possible — will yield more nuanced results, revealing the critical areas that drive operational and financial gains for this unique business.

At this point, these levers of value will start to emerge. Then comes the work of applying a critical eye to each to determine what matters and what doesn’t. That comes in Distill. Part II of Smart KPIs drops next week (probably).

Originally published at on February 2, 2023.



Janelle Alexander

I-Banker turned founder/coder/VC. I do post-investment analysis (KPIs, models, etc.) on startups for VCs. Also: lover of language, chess, & green skincare.