Setting performance goals is a key part of startup success that allows you to focus on the most important problems facing your company and account for their resolution. Here’s a simple framework to set company goals from idea stage through to ~$150k/year annual run rate.
Types of Goals
What: Set goals around customer growth, engagement, revenue, hiring, and fundraising. Early on, most startups should not be setting goals around partnerships or non-pressing legal items, such as patents.
Why: If you set and consistently hit your growth and engagement goals, the growth will compound and you will build a large, valuable business. Unfortunately, no matter how much time early stage startups spend on partnerships they almost never bring the promised distribution.
Set Goals Every 2 weeks
What: Set goals with a deadline of every 2 weeks. Break down bigger tasks, so they fit within this cadence.
Why: Deadlines tend to improve progress as you and your team will push hard to finish the upcoming task. If you set goals on a timeline longer than 2 weeks, it’s easy for the tasks to get off track before they’re addressed. Setting goals every week is acceptable for the earliest stages but once you have customers live, it’s easy for a small crisis to ruin your chances of hitting that week’s goals.
Specific, Numeric, Achievable
What: Create goals that are specific, contain a numeric metric, and have a realistically achievable outcome. A reasonable starting point is to set your upcoming 2-week goal for a 10% improvement on your previous 2-week progress.
Examples:
Bad Goal: Increase Retention — Not specific or numeric.
Good Goal: Increase Daily Active Users to 150 by Feb 7 — Specific metric with a numeric goal.
Bad Goal: Launch App Redesign Publicly — Not specific, might be unachievable in 2 weeks.
Good Goal: Release V1.3 to 10 beta testers by Feb 14 — Specific version launch to a small test group.
Why: Specific goals remove any doubt of whether or not a goal has been achieved, and this clarity reduces the friction around accountability. Numeric goals make it easier to track your progress towards a goal and change your approach earlier, if needed. Last, if a goal is genuinely achievable it can motivate the team to work hard for its achievement; implausible goals can quickly become demotivating as the reality of failure emerges.
Exactly One Owner
What: Each goal must have exactly one owner, with no shared ownership. If this causes internal team friction, you can alternate owners. While the owner is solely responsible for the goal’s completion, the team should be prepared to help.
Why: Accountability for a goal’s completion or failure can be difficult when there are multiple owners, which results in the owners blaming each other for the miss. In addition, most people join a startup to have more ownership of their work and will find this situation personally rewarding.
Setting clear goals on a regular schedule will help your startup make more progress on the most important problems. Discipline on goal setting isn’t always easy but it will make you and your team more effective.
This article is part of a series on Startup Growth.
How to Understand your Customers Before Launch
Your First Product Should Be Terrible
A Simple Framework for Goal Setting
Bad Ways to Set Startup Goals
Hit Goals or Your Startup Will Die
How to Get 10% Weekly Growth
Finding the Right Price for Early Customers
Which Pricing Model is Best for Your Startup?
When Should Startups Pursue Partners?
Early Traits of a $100M Company
Sterling Road invests in pre-seed B2B startups based in North America. Full process here: sterlingroad.com/process.
You can reach me here: ash@sterlingroad.com
Thanks to Kaego Rust for their help on this article.
Photo by Joshua Earle
