numbers | Launch Tomorrow

Recently I’ve been revisiting the launch and pivot process in my research, in an effort to help founders and innovators change strategic direction in their business. Here is an old piece I wrote that should give you concrete metrics to track your progress. These were specifically chosen to be relevant, independently of what budget is available (and thus hopefully make it more relevant nowadays.

VCs and startup investors often say they’re looking for hustle in early stage founders. But that feels vague. And honestly, on its own, it’s not particularly useful feedback. More of a sophisticated way to end a pitching session they don’t want to be hearing.

Until now.

There are a few leading indicators you can use to keep yourself accountable, and to make sure you actually are hustling (and you’re not falling for your own PR).

The following four operating metrics say a lot about an early stage startup’s chance for success.

Your riskiest assumptions are probably related to your prospects and customers. Establish empathy quickly with your target prospect, figure out what's valuable, and get your innovation into the market.

1. Number of pitches

A critical leading indicator metric of early stage success is how many pitches are you making each day (even if you aren’t trying to sell)? By “pitch”, I mean any attempt at asking someone for something, even if it’s just information. For example, this could mean approaching prospects for customer discovery or customer development interviews.

If you are making them, then you are learning more about your audience and iterating towards something that is likelier to work. Also, you are converting some people, which means that you can then continue to build on that as time goes on. This includes:

both outbound pitches, whether for sales or for customer interviews,
inbound marketing, such as free content you create which you need to put in front of your target audience.
advertising (impressions)

With inbound, unless if you already have an audience, usually requires some form of gatekeeper pitching or payment. You to pitch media owners, journalists, editors to get coverage. Or you create content and just pay for advertising.
And then pay attention to any response you get.

At some point after you’ve done this for a while, you’ll know what people want and how to reach them and roughly how to sell them. At that point do it yourself a little bit and then it makes sense to delegate it to a professional salesperson to improve your closing ratios (if you need one).

That’s actually a pretty good metric, because it’s a leading indicator for all learning. And learning is the #1 goal of startup, in order to stop being a startup, and to discover a business model which works.

Notice how I’m not really including the “number of failures” or “failing fast”. That’s repeated so often in tech circles it’s become hollow and meaningless. I think being able to deal with rejection is possibly more important than being able to deal with “failure”, certainly in the tech startup world. Because even in technology the most important decisions that affect your startup or are made by people (customers, prospective co-founders, prospective employees).

To be fair, not every founder is a natural salesperson. But every serious founding team needs to be willing and able to face lots of rejection in order to go after their vision. In fact, the number of rejections a founder is willing to take is a good measure of how strongly they believe in their vision, product, or goal. If you have a goal you believe in, but you’re only willing to be rejected 10 times before you give up on it, you can easily end up being a genius in your own mind but giving up almost immediately once you start doing anything related to marketing.

2. Number of experiments

Another related metric is how many experiments are you running each week? If this is not at least 1, you are not going to get very far. Or other startups who are will run circles around you. Or you are trying to cram too much into one test, not really telling you anything useful.

This is more of a product or operational metric. Basically, the more thorough and organized you are with this, the faster you will learn what you need to know. It never ceases to amaze me, how documenting my own hypothesis and metric before running an experiment is very useful, when interpreting the result. Because it’s so easy to twist the results into what you want them to mean.

Most of the major technical breakthroughs result from lots and lots of experiments. They explore an area or technology with a lot of unknowns, including “unknown unknowns”. That’s why they’re surprising for everyone outside the founding team. Here’s a breakdown of roughly the number of experiment trials required to create a certain type of invention, based on patent filings.

numbers of experiments needed to achieve a breakthrough product

While this looks only at technology, the same principle is true in the case of proving the business model and finding a growth engine. By focussing only on tactics, you end up using exactly the same tactics as everyone else. So if everyone is reading the same 3-4 sources for ideas and trying exactly the same tactics at the same time, the tactics tend to quickly become useless. This the law of shitty clickthroughs happening–one growth hack a time. It’s so difficult and yet so vital to differentiate, if you are using exactly the same tactics as everyone else in your industry. Growth or business level experiments, and lots of them, are the only way to really discover an effective way of growing a startup.

Also, if you aren’t running any experiments, you are only delaying “learning moments”. And if you do ultimately fail for one reason or another, it’s because you’ve delayed so many “learning moments” for so long, that reality comes crashing down on you. And usually this results in the Dunning Kruger effect. You are just clueless, and being confident in what you’re doing only makes it harder to discover you are actually clueless. It’s also a different way of looking at cycle time, which is an important indicator for people like Sam Altman of YCombinator.

3. Back to basics with customer empathy

Many of the pivots required by the crisis require a change of customer type. Or at minimum a focus on a particular niche that currently have a lot going on. Like hospitals. Or Supply chains. Or Agriculture and food.

In that context, do you really understand your audience as well as they do themselves? Do you know their needs? Wants? What they dream about at night? Who they’re influenced by? What questions they have? What media they consume? What they typically do? What obstacles they struggle with?

Do you as the founding team empathize with the customers? Do you gather and systematize data on what they say and how they behave (as an indicator of subconscious needs)? Do you have a system for doing so, like Adrian Howard’s iterative personas and/or a hero canvas?

If you really have this covered, it will help you build something people want. It will help you do channel testing to discover how to reach them cost effectively. It will resolve many types of conflict among your own team, if you agree to formulate a test, and then gather data to prove which approach, option, or decision is right.

Your entire business model depends on it.

Most frequently, either founders aren’t aware of how important this is, or if they are, they only use this if they think it will further their own agenda (for example improving the user experience, regardless of the wider business context).

4. Goal setting and delegation

Probably another really big one is lame goal setting as a founding team, which impacts your ability to ship anything, particularly at the early stages. Knowing what you want to accomplish and giving your team deadlines. This is kind of related to:

succumbing to distractions (bight and shiny object syndrome)
indefinitely being stuck in learning mode
inability to delegate work.

Drifting along indefinitely is not good. And this is often left implicit, avoiding difficult discussions, and ultimately festering and resulting in things like cofounders leaving, etc.

If you really want to build a startup, at some point, you need to finish stuff as well as just learn. Which means you always need target completion dates, or at least timeboxes. In the early stages, these will tend to be very tactical and short term, because you are learning and you don’t want to commit to a “five year plan” if you don’t have any reason to do so, like revenue or traction.

Even if it means have a clear goal of what you want to accomplish in the next 2 week sprint and what that matters, that will help a lot. And also having everyone on your team agree that this is your goal, and how you will track it (so that it is objectively observable).

Admittedly, at first your only goal is to learn. But shifting slowly into execution mode, is inevitable as you start proving parts of your business model.

Most of the internal problems that I see with early stage startup founders boils down to variations of one of these four factors.

Key Takeaways

The 4 key areas to achieve a successful pivot during the lockdown are:

Number of pitches or contact points with new customers
Number of experiments you are running
Revisiting your customer segments and re-establishing empathy
Setting clear goals you and your team can work towards

<< Help Yo' Friends

It all started innocently enough.

As I’ve been working remotely for a few years, I felt I hadn’t been taking much advantage of it. So when my mom invited me to Cancun with my daughter who’s in preschool, I figured “why not?” As long as my team had everything they needed and were clear on priorities, I could go. Moreover, I could just work from abroad. The only real difference was my time-zone availability. Beyond that, nothing changed for them.

For me, it just meant getting up for 6 am meetings. But being much closer to the equator helped rationalize this. Particularly since I already had a team member in Columbia, even closer to the equator with 6 am sunrise, 6 pm sunset.

While there were a few news reports about Corona virus in Wuhan province in China, there didn’t seem to be much to be concerned about. My wife bought a box of face masks for our flight just in case. My daughter was excited about the face masks, at least initially. Kind of like Halloween.

You can probably guess where this is going.

At the airport, when we were walking around with our face masks, people gave us somewhat awkward looks. Although we weren’t the only ones, we were one of a handful of people with masks. Both in Warsaw and later in Zurich.

When we got to Cancun, the world went #CovidCrazy. Suddenly, borders started closing, starting with the Polish one (for everyone except citizens) but we still had to get there in order to cross the border. We almost boarded our return flight but decided not to, as there would be two changeovers and a bus ride across the German-Polish border, with hours of backlog. Not ideal for travelling with a lot of luggage and a preschooler.

Then to get back to Poland, all of the connecting flights became impractical, because those countries shut down their borders. Even though we’d only be changing flights, we’d have to cross the border at the airport to pick up and drop off our luggage while changing airlines.

Finally, it looks like the Polish government looks like it may organize direct flights via the national carrier back to Warsaw. But still waiting on confirmation for this. Without it, we’ll be in Mexico until the international lock down resolves itself. Or more accurately, in self-quarantine so that we can travel at a moment’s notice.

We live in volatile times. It’s funny how I recently penned a few posts about proactivity, while remaining flexible and not locking into a rigid plan, as the optimal strategy. Clearly this is a mindset which helps now.

Like a number of friends with split up families with dependents around the globe, both kids and seniors, the realities of the advice that comes out of mathematical models are a bit more complicated than it would have been for me as a single or even childless young couple. Kids can spread the disease but not have much symptoms. Grandparents face the risk of death due to lack of absolute numbers of ventilators. All that said, I am happy that I am quarantined among family and able to take care of them and myself. I’m hopeful that this situation will play itself out eventually.

There must eventually be some kind of way to restart flights using some type of nearly automated pre-certification of health/lack of Covid-19. The Chinese have some kind of device that measure body temperature from a few meters away. We just need to start thinking through what we can change in order to continue containing the virus, while giving people some ability to remain mobile.

Also, there have been a number of efforts among makers to come up with technical solutions to the expected shortfall of ventilator masks, like that of my friend Sal: https://diyventilators.com/. If you are interesting in helping out, join the chat at that site and say hi.