The 40/40 Startup

Three Metrics-Driven Steps to Build a Successful Business

I remember cracking the bright blue, hardcover, first edition copy of The Lean Startup by Eric Reis in 2012. That was my gateway drug into so much: startup, entrepreneurship, building and selling a company, and ultimately a career in product management in San Francisco.

I’ve learned a lot in the past 8 years and while the fundamental insights and principles of that book (and many others!) are still relevant, I’ve found that as an educator when I’m trying to teach product management and startup the framing of “MVP” and “Validated Learning” inspire people but also sort of confuse them. I see a lot of maximal viable products and a lot of guessing and checking instead of careful thinking and deliberate action.

I’ve come up with my own new way of talking about how to build a startup that is

  1. Easy to remember
  2. Entirely data- and metrics-driven
  3. Based on best practices I’ve learned straight from startup leaders in SF

I call it “The 40/40 Startup”

A 3 Step Method

  1. Interview 40 people
  2. Meet the Rule of 40
  3. Get your NPS above 40

That’s it!

Let’s look at each one in more detail.

Interview 40 People

Meet the Rule of 40

To measure product market fit, survey the users of your version 1.0 of your product. Here’s the key question to ask:

How would you feel if this product or service were gone tomorrow?

A. Very Dissatisfied
B. Somewhat Dissatisfied
C. Neither Satisfied or Dissatisfied
D. N/A

You’ve achieved product market fit if 40% of your respondents choose “A. Very Dissatisfied”.

Now its time to focus on growth.

Get Your NPS Above 40

Once you have a NPS above 40 you are essentially in the money.

BONUS: Rule of 40 (Financial Version)

Educator, Founder, Engineer. Interested in Evidence Based Education and Solving BIG Problems.