3 Principles of Setting Startup Goals
From the earliest days of your startup, you should be setting goals. Goals keep your team focused on the most important tasks and speed up progress. Usually, you’ll begin with short-term tasks, e.g., incorporate in Delaware, but quickly graduate to complex projects, e.g., release iPhone app v3 by October 1st. Setting the “correct” goals is surprisingly difficult as you have so many competing priorities at a startup. However, there are some basic principles to keep your goals meaningful and drive your company forward:
What: Start with a simple, core metric for your startup. Usually, this would be a revenue or usage number, e.g., monthly recurring revenue or daily active users. It’s also helpful to have up to 3 supporting metrics tracking your offering’s customer acquisition, engagement, and churn.
Why: Using metrics makes tracking your startup’s progress much easier, allowing you to measure your rate of growth by quickly comparing dates. If you orient your startup’s goals around a core metric and mention it regularly in team discussions, everyone at the company will begin to prioritize it.
What: Set short-term deadlines for long-term goals, e.g., if you plan to launch an iPhone app in 6 weeks, you may want the screen designs ready within 2 weeks. If you’re unable to hit your near-term deadlines, you should adjust the longer-term goals accordingly.
Why: While everyone will have to work hard at a startup, people tend to push themselves to hit mutually agreed-upon deadlines. Making use of near-term deadlines, ideally in one to two week sprints, allows you to adjust long-term goals based on reality and gives you time to iterate on a project’s challenges before it’s too late.
What: Assign exactly 1 person to act as the owner for each goal. This doesn’t mean that 1 person has to complete the goal by themselves; instead, they are responsible for the planning and execution of the goal. The goal owner will need time to make a plan and request resources to complete their goal. Most of the time, you won’t be able to provide all the requested resources, but always try to help as much as possible. It may be tempting to set 2 or 3 owners for a goal. However, you should instead rotate ownership across the team to maintain 1 ultimate owner per goal.
Why: Having 1 owner ensures accountability. If you have more than 1 owner, and a goal is not completed, multiple owners can blame each other. When 1 person owns a goal, they know they will receive recognition for its completion, which is motivating.
Setting goals is an essential part of a startup’s early success, and getting it right is hard. Using these 3 principles, you can give yourself the best chance of keeping your team focused and growing fast.
Thanks to Kaego Rust for their help with this article.
Sterling Road invests up to $250k in pre-seed B2B startups based in the USA, Canada and UK.
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