What’s the best way for a startup to measure its progress?

Across public talks and internally in the accelerator I co-founded, I’ve taught and advised on metrics that matter for startups. I could add to the lengthy body of knowledge of startup metrics but there’s a qualitative metric that people don’t mention because it’s hard to measure and few see it in person. Startups in their first 18 months of operation will know what I’m talking about. I call this metric the beach day ratio.

This is how it works. A particular startup is at a tough point: they’re late on a release, users are churning too quickly and recent investor introductions have gone quiet. Morale is low and people are exhausted. There are job offers in a couple team members’ back pockets. They might even be calling someone like me up to help take a look at their direction. In the midst of all of this, the team decides to take a day at the beach (or depending on where you live, a hike, a trip to the museum etc) to take a break and refresh themselves.

The question is, now that they experienced that day of freedom — that space to think about what they want to do — what happens the next day?

The teams that tough it out and go right back to work instead of continuing to escape to the beach (or take the new job, or give up etc) are the ones with the best chance of succeeding. If investors could watch their investments in this way, they could see that startups with high propensity to keep escaping (a high beach day ratio) are in bad shape and need more help than lean startup metrics could ever offer.