Why mid-term goals matter

After advising early-stage companies for a few years, I’ve realized that there’s a wide variance in how founders approach goal-setting early on. It’s not a given that a founder will set the right goals or set goals at all. I’ve seen enough to know that not setting goals does more harm than good.

Just about every company has short-term goals (where they expect to be in 1 year) and very long-term goals (where they expect to be in 7 years). Fewer companies have goals in between.

The problem is, the time between year 1 and 7 tends to be where the rubber meets the road. This is when your assumptions around scaling, unit economics, defensibility, etc. are put to the test.

For example, you might be running a successful scooter sharing marketplace in your small town. Confident that competitors will focus on big cities, you decide to raise capital with the goal of growing to 3 other small markets before raising more money (year 1 goal). After sizing the market, you’ve concluded that if you expand to 10,000 small towns, you’ll build a venture scale business (year 7 goal).

While investors might only be funding you for 1 year, many are likely to make a decision about investing based on what they think will happen between year 1 and 7. Although you may not be 100% positive on what’s going to happen, you should at least have a hypothesis about what milestones lie in between those years and the strategies you’ll use to achieve those milestones. IMO, the easiest way to present this hypothesis externally is via a set of goals.

Of course, there’s a lot of uncertainty as you forecast past one year, but having a viewpoint is better than saying “ we’re going to CRUSH IT in our next three markets and then ¯\_(ツ)_/¯.” If you don’t start out with a hypothesis then you’re left to make one up as you go along — or worse, someone else will make one up for you.