A Co-Founder(in)* asked me: so, how do you know you’re making progress with your Startup?

What are your success metrics? How do you know they are the right ones?

An image that makes me feel I’m making progress, A.K.A, “Getting out of the Building”.

I knew this moment was going to come. And I stumbled.

The #1 question that I just love asking every Entrepreneur during my mentoring journeys finally was asked right back to me.

So, it’s been more than a month since you launched this thing:

How do you make sure you’re making progress with your startup? How do you know you’re focusing on doing the right things to do every day?

Take that Luis. Right in your face!

To be honest, it’s a tough question. Whoever I asked this before, I’m sorry if you were not really prepared for it or I came across with an obnoxious tone.

The truth is: this is also a really good question to ask every entrepreneur on a regular basis.

This question came over a phone call so I think it passed unnoticed that I had a hard time articulating my answer. If I would have been in front of this person, my body language would have told exactly the opposite.

After the call, I immediately opened up my computer and evaluated where do I stand today. I couldn’t recall at the moment when was the last time I checked…

What did I check?

You might have listened different perspectives about creating goals in an early-stage startup and might have several opinions about the proper timing to include goal-setting systems. Most of the time I feel from people a negative sentiment around setting and writing goals but…

I have a different opinion about it.

The one and only thing that Startups need, as I’m experiencing now, is to pay attention to what’s important, adds the most value and creates impact. One way of doing this is with goals, therefore:

I believe goals keep us focused.

Goals have helped me create a better version of myself, personally and professionally, and I think they are useful for any organization searching for a systematic approach to measure progress, keep teams focused, enabling alignment and building trust. Those are some of the reasons why we are embedding goals from the beginning of this journey at a-change.

Here is how it looks like for us:

The way we measure progress at a-change => Objectives & Key Results (OKRs).

But why are we doing this now?

After seeing and experiencing the struggle of many Entrepreneurs to keep focus and teams aligned, I decided to follow what Rick Klau (Partner at GV) said when asked “when is the right timing to use OKRs at a Startup?” He mentions:

“Easy answer: as soon as possible.
The sooner this is part of the DNA of the company, the sooner this is accepted and part of the normal rhythm that the company gets in, the better off you’ll be”.

OKRs is our concise, easy and simple system to measure the direction where we are heading to and if we are getting closer or not to that destination.

There are only three important topics for us now:

1) Customer Discovery

Since we launched, this is the most important activity and where we spend most of our time, around 75% of it. This means validating as fast as possible our initial business model assumptions and creating a set of experiments to test each hypothesis. To do this, we spent most of our time talking to Founders and Startup members to test reactions to each hypothesis, gain insights from their feedback and adjust the business model accordingly. Our goal is then:

OKR #1: walk on customers’ shoes and truly connect with their main problems and needs.

1. Interview 60 Founders and 30 Service providers.
2. Design 10 experiments during Q2 to test the Problem.
3. Design 5 experiments during Q2 to test the Solution.

Only by doing this and moving myself away from my tiny office next to my kitchen I’ve been able to reach more than 20 Founders so far and truly engage and listen in depth about their problems and needs. Even better than that, they share with me solutions for what could already solve their problems and advise me how I can test the way the business model can generate revenue.

It’s important to note that this OKR is not about colleting feedback from prospective customer or running lots of focus groups, rather using Customer Discovery as a tool to find customers and a market for our vision. Our approach, as explained by Startups’ Guru Steve Blank, follows the loop:

Hypotheses/Experiment/Test/Insight loop for Testing a Problem using Customer Discovery.

Reply to the Co-Founder(in)*:

I measure progress by moving as fast as possible in the loop above. The speed has to assure that I’d be able to talk to almost 100 people and validate my business model assumptions so I can go from Customer Discovery to Customer Validation, first two steps of the Customer Development process.

2) Finance (A.K.A cash run-away and the chance to keep playing)

We are bootstrapping and I think this is more straight forward to be measured. For kickstaring this entreprenerial venture, I put aside 12,000 EUR from my savings to take this business off the ground without external support and there are only two things I measure here:

How is the cash burn rate?
How many months’ worth of cash left in the bank?

Cash burn rate ≈ 1388 EUR/month; Money left in the bank = 4,64 months.

The only way to continue with this Startup is to measure how much money and months are left and if I want to continue this, I must start generating some cash inflow from Q3 this year.

Reply to the Co-Founder(in)*:

I measure progress by knowing how much money I have left until I validate my Business Model. If I don’t run out money, I get to keep playing. If I run out of money, we know what would happen… (Would your offer me a job then? ;) ! )

Marketing

Finally, we want to start growing our audience and find the right Entrepreneur in need of our services. Therefore, it is important for us to continuously communicate our value proposition and how we are discovering problems using Customer Development and experimenting. Therefore, it important for us to share our learning and keep our audience engaged on a regular basis, especially when we truly validate that we have found Problem/Solution Fit.

Reply to the Co-Founder(in)*:

We want to grow our audience of Entrepreneurs who want to build a business driven by innovation and benefiting from our guidance and service. Reaching an audience of 5000 unique visitors in our website and keep them engage would help us know that we are doing a good work and we are moving forward.

All in all, is this the proper way to measure progress?

We are honestly testing this. Nevertheless, I’m pretty sure that the longer any person or organization wait to have a system around measuring goals and progress, the longer they are going to have habits formed about how things are done and the more inertia you are going to have to overcome those habits. Even if it feels a little artificial, if you are a company of 4, the discipline this system brings is immeasurable.

Dear Co-Founder(in)*:

I truly appreciate the question you did. It helped me make a STOP, reflect on what I’m doing, corroborate if it still makes sense and iterate accordingly.

Thanks for asking! I hope you do it again! :)

And you dear reader, how do you measure progress at your Startup?

Do you have a challenge doing this? Please let us know at a-change!

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As you might have realized until this point, I’ve always quoted Co-Founder(in)*:

I wrote Co-Founderin since this is the female word for a “Female Founder” in the German Language. Nowadays only 15.6% of the Europe’s startup founders are women. But there are enough examples that things are changing. This is one just simple of them taken from a conversation with a Female Founder.

Let’s keep those numbers moving up and empower our Female Founders to shake the Startup world!