So many startups fail because they think engagement will be easy
This is an excerpt from Ash Rust’s talk for Pear Accelerator S20.
Pear Accelerator is a small-batch program, where our partners and mentors work hands-on with exceptional founders through the journey to product-market fit. Learn more: pear.vc/accelerator
First things first: the most important thing over and above everything else that you can do to get to product love is to launch and get live. Live, as in: people outside of your team can use this product end to end, and at least one person has done so.
Once you’ve gotten live though, you need to “Test, learn, observe and iterate,” as discussed in our Product Market Fit lesson. After all, you’re aiming to make something that customers want to rely on and use fanatically. The only way you can get there is to learn from customer engagement. To learn most efficiently, you need to set effective goals for yourself.
Here’s a systematic process for doing so, from long time startup mentor, Ash Rust.
Determine your North Star metric and supporting metrics Set numeric, specific, and achievable goals Assign owners to each goal Start goal setting as early as possible
First, you’ll want to determine your North Star metric. This is the metric your team will rally around.
Some examples: if you’re a SaaS business, your metric is usually some form of revenue. If you’re a marketplace, you might think about transaction volume. If you’re a pure consumer business aiming to monetize with ads, then you will likely consider something like daily active users.
While it’s very important to pick the right metric, you’ll also have to accept that it won’t be perfect. Since one metric won’t tell the whole story, you’re allowed to go one step further — but don’t go much further than that. Three supporting metrics is more than enough, and you don’t need an expensive analytics suite to calculate them.
Ash recommends breaking your business down into three sections, with a corresponding chosen metric for each: distribution, engagement, and churn.
To get your metrics moving in the right direction, you’ll need to break them further down into their own components, and set goals around these components. Meeting these component goals should ultimately tier up to moving your metric toward the North Star goal.
To get started increasing revenue, for example, you’ll probably need to start generating some leads. To start generating some leads, you’ll need to start interviewing customers to get a sense of what they want, so you’ll need to start scheduling some initial meetings. Set your first goals around these tasks.
It’s key that all your goals are numeric, specific, and achievable.
For example, rather than having a goal such as “interview customers,” you’ll want to go a little bit further and say, “How many customers do we want to interview?” Is it 5? Is it 10–15?
Achievability is also important — if your goals are too outlandish, your team won’t take them seriously. Don’t set a goal for a $100 million contract to be signed this week. Set a goal that is much more reasonable that you can track against, perhaps something like “schedule first meeting with big wishlist client.”
However, don’t go too easy either. You still want to make sure the goal is impactful for your North Star metrics. For example, “schedule 5 meetings” is more of an impactful goal than “send 20 cold emails”, as it gets you closer to increasing that North Star metric of revenue.
Once you’ve set your numeric, specific, and achievable goals, it’s time to build your roadmap to achieving them. Assign owners to each goal and provide resources for them to complete it within a reasonable deadline.
At the early stage, the timeline shouldn’t be too far out, since things are changing so rapidly. Quarterly goals will not make sense. Ash recommends starting out with 3–5 goals every two weeks, but you’ll definitely need to adjust depending on your business. If you are a consumer web tool, for example, you might find you’ll need to set weekly goals, because you need lots of feedback to iterate as fast as you can. On the other hand, an enterprise company may need to use monthly goals, due to fewer customers and long sales cycles.
Every goal absolutely needs an owner. You cannot have more than one owner for a goal, because it diffuses accountability. You can’t afford to waste time playing blame games instead of understanding immediately why that goal was missed. Remember—rapid learning is this stage is everything. If you’re having disagreements about who should be the owner of a goal, then alternate between different weeks (or whatever your timeline is).
The owner of the goal should be the one responsible for coming up with a plan to achieve that goal, complete with an estimate of resources that they’ll need. The manager will be responsible for providing those resources.
All of this creates clear accountability for all parties, which is crucial to iterating efficiently.
Final point: you want to start these processes as early as possible, even if your team consists of just you and your cofounder. If you don’t hold yourself accountable, you allow it to become the cultural norm for your future team. It gives your future team members the idea that certain people or groups are subject to exceptions from the achieving goals.
Once you’re growing, the easiest way to instill a goal-setting mindset is to allow your team to set their own goals. As long as they are specific, numeric, and achievable,you shouldn’t have a problem. Even if their first goals are extremely easy or not quite impactful, that’s okay. You can help them iterate and refine their goals as time progresses. The key is to get everyone into the habit of doing it.
This goes for yourself too! While we give much advice here, the key thing in the end is to get going. In the same vein as your product, the most important thing to do is get live. Be thoughtful about your goals, but don’t get paralyzed. Take your best shot at setting some goals, and iterate from there.