Discussed the importance of defining Key Performance Indicators (KPIs) and prioritization for early-stage startups to improve how founders spend their time and expedite their journey to product-market fit.
Highlighted the need to focus on primary KPIs like revenue growth, with exceptions for non-revenue KPIs in specific industries, and secondary KPIs such as retention, churn, and unit economics.
Provided a framework for prioritizing tasks based on probability of success and complexity, and setting ambitious weekly KPI targets to create a sense of urgency and drive progress.
Meeting Notes:
Introduction to KPIs and Prioritization for Early Stage Startups
Divya's experience as a founder and Visiting Group Partner at YC
Purpose of the talk: Improve how founders spend their time and expedite their journey to product market fit
Defining KPIs and Prioritization
KPI stands for key performance indicator - metrics that measure what matters and indicate if things are working
Prioritization tells you in what order you need to tackle your work each day to make the most progress
Importance of KPIs and Prioritization
No one tells founders how to spend their time
Easy to feel busy without making progress towards product market fit
Examples of "safe progress" tasks that don't move the needle: Optimizing paperwork tasks where "good enough" is sufficient, Perfectionism and craftsmanship on unused features, Premature optimization or building for scale not needed yet, Choosing intellectually harder problems over building what users want
Importance of speed to market to earn revenue, reinvest, raise on better terms, and stay ahead of competitors
How to Prioritize
Step 1: Identify your top KPIs
If launched, revenue growth should be primary KPI
If pre-launch, initial KPIs may be user conversations or time to launch
Step 2: Set KPI goals for the week that ladder up to longer-term goals
Gives a sense of urgency and reminds you of the importance of early growth
Example of Airbnb writing weekly KPI goals on their bathroom mirror
Step 3: Identify your biggest bottleneck or problem in moving your top KPI
Example of SuperDaily realizing their milk brand availability was the biggest bottleneck to conversion
Framework for prioritizing tasks: Make a list of ideas, rank by probability of success and complexity, Be honest on why KPIs aren't moving, learn and try something different
Choosing the Right KPIs
Primary KPI: Growth and ideally revenue growth. Rare exceptions for non-revenue KPIs like in hardware, biotech, enterprise with long sales cycles.
Secondary KPIs: Retention, churn, unit economics, customer acquisition costs. Avoid vanity metrics that don't directly impact growth.
Examples: Comparison of DoorDash's laser focus on order volume vs. Divya's startup Rickshaw trying to optimize for growth and unit economics
Setting KPI Targets
Top-down approach: Set a future milestone and back into weekly growth rate needed
Bottom-up approach: What's realistic to achieve in the next week?
Exceptions: Hardware, biotech, enterprise with long sales cycles may need to use other metrics like letters of intent
Homework and Closing
Write down your primary and secondary KPIs and set ambitious targets
Share your KPIs and goals with your startup community for accountability
The goal is to help you get to product market fit faster