Adora Cheung - How to Set KPIs and Goals

Summary

The transcript discusses the importance of setting Key Performance Indicators (KPIs) and goals for early-stage startups. It emphasizes the need for a primary metric that reflects the health of the business, with a focus on revenue or active users. The talk outlines characteristics of a good primary metric and the significance of growth rates, advocating for a weekly growth rate to measure progress. It also provides insights on setting goals, prioritizing strategies, and using metrics as a motivational tool to drive the startup forward.

Takeaways

• 🎯 KPIs (Key Performance Indicators) are quantitative metrics that measure the health of a business, providing objective feedback on performance.
• 🚀 The primary metric should capture the value delivered to customers and be a lagging indicator of success, focusing on revenue or active users for most startups.
• 📈 Characteristics of a good primary metric include: quantifying customer value, capturing product's recurring or enduring value, being a lagging indicator, and being usable as a feedback mechanism.
• 💡 Secondary metrics should be selected to provide a 360-degree overview of the company's health, complementing the primary metric with 3 to 5 additional metrics.
• 🔍 For businesses with regulatory hurdles or in early stages of technology development, the primary metric might be less quantitative and more focused on technical milestones.
• 🛣️ Setting goals for growth involves focusing on a weekly growth rate, which allows for frequent feedback and manageable progress towards larger objectives.
• 🌱 Early-stage startups should aim for a growth rate of 5-10% week over week, with exceptional growth being 10% or more, based on observations from successful startups.
• 🚫 Avoid using paid growth in the initial stages; focus on organic user acquisition to ensure the product's inherent value and demand.
• 📊 Track and visualize progress by setting absolute goals for specific time frames and breaking them down into weekly objectives.
• 🤔 Regularly reassess and adjust goals based on performance and insights gained from user feedback and market dynamics.
• 📝 Consistently update and fill out KPI tracking tools to maintain honesty and transparency about the startup's current state and trajectory.