Setting short-term goals will compound towards driving long-term results.
Initially, we’re here to help formulate and reflect on goals for founders of OCV companies. We will help set goals and hold you accountable for meeting those them. Over time, founders will learn how to do this themselves.
Setting and meeting company goals builds a culture of accountability. Set an ambitious goal every 2 weeks and aim to achieve at least 70% of the goal. It’s not acceptable to meet 33% of the goal. A good starting point is setting a goal of 20% growth every 2 weeks. If goals are consistently achieved, you will be better able to demonstrate significant progress. This is important for future fundraising.
- 20% growth of something (page views, active users, revenue) every two weeks
- Achieve at least 70% of binary goals (shipping an application update, website, campaign)
It’s more important that founders really try to accomplish this goal as a component of breaking down longer-term successes successfully into shorter-term actions than to routinely go after only what we suggest. We have a good idea of what you should go after, but you can disagree and strive for more to effectively drive long-term success. Founders need to rally teams around a single, clear goal, and employees will be able to tell if you aren’t personally invested in achieving it. Make goals simple and clear, and avoid adding nuance. Keeping the goal simple without nuances allows the team to explore multiple avenues and employ creative problem-solving.
Recurring revenue (ARR) and its growth is the thing that matters the most for businesses to be successful as valuations will be driven by an ARR multiple. The earlier the benchmark for growth is revenue based (as opposed to new users, active users, or downloads), the better, ideally.
Short-term goals are not exhaustively sufficient to achieve milestones for success; founders should prioritize excelling in the long term above satisfying short-term objectives and adjust their short-term objectives accordingly.
Effort alone is not enough to guarantee success. While putting in hard work and dedication is important, it is ultimately the output and results that matter. Focusing on achieving tangible outcomes and delivering high-quality work is what drives progress and brings about meaningful results. See Quarterly Milestones & North Stars. It's not about how much effort is put into a task, but rather the actual outcomes and impact that are generated. Striving for efficiency, effectiveness, and delivering valuable outputs should be the primary focus to drive your business forward.
Pre-revenue companies looking for product-market fit should focus on growing daily active users and net retention. In other words, you need to create value before you can capture value.
- Daily active users
- User retention
- Cycle time for improvements (i.e., the time between opening and closing an engineering ticket)
In the early stages of company development, focus on gaining users, getting feedback, and shipping improvements quickly. The best way to capture feedback is to sit with users as they use the product, either in person or through screen sharing. Include engineering in the meeting so they have the full context and knowledge of the improvements that need to be made.
Ways to gain users:
- Ask friends and colleagues to try the product
- Cold outreach to ideal users
- Extended free trial with timed check-ins
Fast cycle times are crucial to retention. The goal is to reduce the time it takes from receiving an issue to shipping an improvement from days to hours.
Regular check-ins to discuss key departmental metrics make it easier for everyone to stay up-to-date on overall company performance, especially as a company scales quickly. It promotes accountability and helps ensure key performance indicators (KPIs) and objective and key results (OKRs) are tightly coupled. See GitLab’s key review handbook page for an example.
- Create a single structure and template to be used by all functions.
- One meeting per functional group.
- Share decks ahead of time and use meeting time to cover 3-5 priority items and answer questions.
Consider starting with three functional key review meetings:
- General & Administration (Finance, People, Legal)
- Product & Engineering
- Sales & Marketing
The meeting structure will change with size. As more functional leaders are hired, key review meetings should cover a single function. For example:
- Set clear goals, explain why they’re important.
- Check-in with the team on whether they are on track, help them get on track, and set expectations on consequences.
- Those who don’t meet deadlines repeatedly without reasons are not a good fit for an early stage startup.