OCV follows the mantra that “growth solves (nearly) all problems.” Below are typical target milestones for OCV companies. They’re meant to be ambitious. Also, adaptable, based on each company’s specific situation. If founders propose other goals in place of those outlined below, they cannot be missed without urgent remediation. Accountability is important for us to achieve desired outcomes for every company.
First Quarter: Brand awareness
North star: 1 blog post that ranks in the top 30 of on Hacker News (HN) per two weeks
Generating awareness of your company is the highest priority in the earliest stages of building your company. People need to know you exist before you can gain users, recruit team members, and get feedback. OCV advises the founders to focus on content marketing starting on day one because it’s a highly effective and cost-efficient way to gain attention and interest. Publishing interesting content regularly will grow your website traffic, attract talent, and build an audience that can eventually be converted into users.
What you'll probably need to do during this quarter:
- Hire a content marketer (can be freelance or part-time)
- 4 proposed blog post titles (for different articles) per two weeks (8 per month)
- 2 titles published per two weeks (one per week)
- Hire 5 engineers in total
- Add a pricing page to the company website
Second Quarter: Contributor growth
North star: 20% growth number of unique contributors from the wider community with merged contributions per two weeks
Building up your community of contributors speeds up product innovation. Focus on eliminating friction in the contribution process and enabling the community to make meaningful improvements to the codebase. An active community of contributors will make improvements like bug fixes and performance issues go faster. Growing your network of contributors will also positively impact product awareness as people tend to share their involvement with their networks. Some of the things you do to make it easy to contribute also make your engineers more effective. If you don't grow the contributions from the wider community early on to a significant part, it is really hard to do so later. Overall, the open source project should be better off.
What you'll probably need to do during this quarter:
- Same content marketing goals as Q1
- Remove contribution roadblocks
- Create a hero contributor program
Third Quarter: User growth
North star: Increase active installations by 20% per two weeks
User growth is one of the most important metrics for securing investor funding. Strong user growth shows traction and is an early proof point that there is a need for what you’re creating. For early companies, about 15-30% of free users will convert into paid users. Rapid user growth is the path to revenue.
What you'll probably need to do during this quarter:
- Same content marketing goals as above and start paid promotion
- Start selling to get the company’s first $1,000 in revenue
Fourth Quarter: Recurring revenue growth
North star: Increase recurring revenue by 20% per two weeks
Annual recurring revenue (ARR) is now your most important business metric. A strong ARR base and the velocity of ARR growth rate are positive signals to potential investors, strong signals of product market fit (PMF), and typically result in higher valuations. Rapid ARR growth is the key to expanding operations and funding future hires. Focus on converting free users to paid annual subscriptions.
What you'll probably need to do during this quarter:
- Hire a CEO.
- Apply to YC with CEO. See Y Combinator Application.
- Same marketing goals as above but driving on growing revenue rapidly.
Fifth Quarter and beyond: Keep growing revenue
North star: Increase recurring revenue by 20% per two weeks
Previous quarter you increased ARR and ARR growth rate by converting free users to paid. To keep growing fast you probably need to shift focus to direct enterprise sales. Founders should sell the first $1M of ARR and be able to share a first iteration of a sales playbook to create a repeatable sales motion before hiring their first sales and marketing leaders.
What you'll probably need to do during this quarter:
- The founding team growth ARR to $1M in ARR
- Build a repeatable sales playbook
Sixth Quarter: Fundraising
North star: Increase recurring revenue by 20% per two weeks
The north star is still ARR and doesn’t change. This is the most important metric for building your business from here on out. Now that you’ve had three quarters to grow users and two quarters of revenue growth, it’s time to fundraise and close the Seed round!
What you'll probably need to do during this quarter:
- Prepare to fundraise
- Close seed round of about $4m on $20m pre
Â