Stop Measuring the Wrong Things in Your Startup
A couple of years ago a triathlon training company (Elevate Utah) wanted to see if they could transform an “Average Joe” into a winning triathlete in his age division. Elevate wanted to prove that with the right training, nutrition, and equipment anyone could win. The test subject was an Entrepreneur who was slightly overweight, had never cycled competitively, and was somewhat afraid of the water because of a traumatic near-drowning experience as a child. That guinea pig was me. Keep in mind, they were not trying to see if they could get me to ‘participate’ in a triathlon or even ‘compete’ in a triathlon. Their hypothesis was that they could get me to ‘win’ after a single year of training. It was a daunting task for me, especially the swim. I learned quickly I wasn’t a good swimmer but a phenomenal sinker. I can sink like nobody's business.
I agreed to be the test-subject. This meant that I woke up six days a week between 4:00–4:30 a.m. to train for 1.5–2 hours and double that on the weekend. Progress was slow at first, but finally, I started making headway toward the goal. Also, I happily found that I could swim without drowning. I was really excited about overcoming this fear. Months into the training I started signing up for triathlons. Gradually, I was beginning to advance in the rankings towards the winner's circle. After doing several sprint triathlons I decided to race in my first Olympic distance triathlon. I chose the Spudman in Idaho, mostly because the swim portion was in the Snake River, meaning the aquatic portion could be fairly fast without much effort.
My goals for each of the individual disciplines were: First, I wanted to emerge from the water in the middle of the pack; second, I wanted to maintain a speed of at least 18 mph on the bike; and finally, I wanted to pass at least 100 people on the run.
With the rest of my start group, I entered the Snake River with anxious excitement. We swam to the middle of the river and the gun went off. Swimming downstream was fantastic. It felt like I had propellers on my ankles. I caught the river’s current perfectly around the bend and launched toward the finish line. Coming out of the water right in the middle of the pack was a huge improvement from when I started my training. As always, I dizzily climbed out of the water (because of swimmer’s ear) and found my bike in the transition corrals.
I changed quickly out of my wetsuit and jumped on my bike. The bike portion went well for the first 10–12 miles but was a little rough the last half because I hadn’t prepared for the distance. I knew I was losing power when people started passing me near the end of the ride. I thought, “It’s ok because the run is my strongest event and I will crush it.”
The transition from Bike to Run went smoothly. I put on my trusty Altra Running shoes and headed out on the course. The run started with a little uphill section and I was already passing people. The course leveled out and I started passing even more. With my goal of passing 100 people, I was counting each “kill” as I zipped by. Before I was even halfway through the race the count exceeded 100 people. With more than half of the run left, I decided to increase the goal from 100 to 200. I was thinking, “I am crushing my goal. I think I can double it.” More thoughts traveled through my brain as I listened to the steady rhythm of my feet on the road: “This is amazing. It really isn’t even as hard as I thought it would be. I wonder why it’s not harder?” I continued counting silently, “110, 120, 130, uh-oh a large group of people, quick, count fast, 155, 175, 190, 200, 210, etc… Because I reached my initial goal and even surpassed the much larger secondary goal, I decided to stop counting with a mile left to go.
I turned down the grassy hill toward the big inflatable arch at the finish line feeling like I had crushed the run and had made up a lot of distance from the swim and bike. When the finisher medal was placed around my neck I felt a great measure of satisfaction and confidence, both with my run and the race overall. After making my way through the finishers corral I found the results stand.
I looked at my splits for each discipline and realized that although I had passed over 200 people in the run, I had actually run a much slower pace than I normally run, especially in a race. My pace was so slow, in fact, it was less than a normal workout. No wonder it felt so easy. I HAD MEASURED THE WRONG THING. I was counting a metric that didn’t, nor couldn’t, get me to the winner’s circle. I had measured something that really did not matter — I had counted people instead of speed. In order to win, there was just one piece of data that I needed to focus on — my mile pace. Instead of passing hundreds of people, (at a slow pace), I needed to run a low 7:00/mile pace or faster regardless of how many people I passed. Spending mental effort counting people distracted me and not once did I look at my pace because I was so caught up in the excitement of counting “kills.” You can imagine how deflated I felt when I realized my goal was inconsequential and actually gave me a false sense of confidence which worked against the real objective.
Needless to say, it took several more triathlons before I stood atop the winner’s podium.
So, how does this apply to business? Often times we start measuring things that have little to no effect on achieving the BIG goal.
Let’s take a look at some of the common mistakes in three areas of business — marketing, sales, and strategy.
Marketing
There are so many items that can be measured in marketing that I’ve decided to make this article a multipart series. Look for part two coming in a few days — “Measuring the Right Things in Marketing.”
Let’s take a look at just one Marketing scenario — The Number of Followers on Social Media.
This is a great example because many companies are chasing this rabbit incessantly without moving the needle for the company. Getting as many social media followers as possible is a great goal as long as the followers are engaged and converting to dollars. Just like my race, counting people felt good and it gave me a false sense of accomplishment. Getting another 10,000 followers is fantastic because now you have the communications channel to reach another 10k people and share your message…if….BIG IF…those people are engaged in a meaningful way. Having 500k followers that never respond to a Tweet or Instagram post is the same as having 0 followers. You want to connect not just contact. You need to engage not just gather. There are several people and companies that do this really well. One example is the world’s youngest billionaire — Kylie Jenner. She tweets or throws an Instagram post about a limited time release of a product in her Kylie Cosmetics line and it sells out online in less than 1 minute. This is measuring the right thing. Stop measuring how many followers you have and start measuring the number of sales your social media following produces. I had the opportunity to visit the DELL Social Media Command Center a few years back, and at the time they were accurately attributing over $50MM in sales to Twitter alone. This is the right metric.
Look for part two of this series where we’ll dive into greater detail and share more examples of measuring the right things in Marketing.
Sales
Many companies look at contacts, leads, and names in a database as key metrics in sales. I have heard from many young companies how excited they are about a lead they just put into Salesforce. The excitement comes because the lead has a big name like Walmart or Amazon or some other large company. During my time at FranklinCovey, I had the chance to work with an amazing sales executive — Shawn Moon. When I asked him who the number one salesperson was and what that person was doing he pointed me toward Gretchen Gill. Gretchen is and was on a mission to “Create The Ultimate Competitive Advantage Through The Development of Your Organization’s Greatest Asset — Your People.” I flew to the East Coast to meet her and asked what she was doing that was so special. She shared her normal work day with me. She was only a couple of years into the tenure at FranklinCovey. Gretchen would spend 3–4 hours meeting with clients and potential clients, and then she would spend the remainder of the day filling the pipeline through phone calls. Keep in mind this is a multi-million dollar salesperson — on the phone for hours each day. This was not what I expected. After analyzing the entire sales force, Shawn helped me see that one of the most important metrics to sales success was how many phone calls were made in a day which result in meetings.
Watch for part three of this series for more detail and examples of measuring the right things in Sales.
Strategy
Highest Value Activity
Determine which of your activities will be the highest value for the company overall. Don’t get this confused with an ROI performance metric. This can be an activity with an immediate ROI or an activity that won’t produce an ROI until much later. Let me share an example with you. One of my coaching clients had a software company that facilitated laborers, construction companies and contractors with billing and appointments, etc. They had grown incrementally for years. One of their top concerns listed was that their software and apps weren’t up to the same level as their competitors. They were pouring money into development. They were incessant about keeping up with the latest trends and features of their biggest competitor. When we looked at their goals it became clear that revenue growth was at the top of their list, yet they were pouring all their resources into development. I asked one simple question, “What if you stopped developing?” After the initial shock wore off the very wise/humble CEO thought about it and said, “We could have a viable product for over a year and a half before it becomes outdated.” The next question changed the thinking of the company completely: “What if you spent the money you had earmarked for future development on sales instead?” The last several years this company was literally the definition of bootstrapping. Every extra penny went right back into development. I suggested they look at sales as the Highest Value Activity and use the proceeds from the additional sales to fund additional development…if needed. The key is getting the sales first, and once a profitable margin is attained, funnel the money back to development. This turned out to be the largest growth activity in the company’s history. They went from small incremental Year-over-Year growth to doubling revenue in one year’s time. The company they were always trying to keep up with ended up buying them because of their rapid revenue growth.
When you, the Entrepreneur, set your sole focus on the BIG GOAL, the one that can transform your startup, and remove all of the small distracting goals you will achieve incredible things and the company will be able to experience massive growth.
