The first 18 months are a critical period for any startup. It’s important to set clear goals and to constantly monitor success. But when you are building a product or service there’s one crucial factor that matters more than anything else: relevance. Do people want what you are offering? A few ways to find out:
– Constantly investigate traction. For example, if you a consumer service with an app, look at whether people downloading it. If they do download it, are they using it and for how long? If you are building a service for the enterprise, are you on track to release a product? Do you have early customers giving you input?
– Monitor the straightforward and the subtle. The obvious measures of success are getting the product out on time, increasing revenue and preserving cash. But there are also more nuanced things to look at, such as user engagement. At eBay we had a “weather report” that measured complaints from customer support, emails, and bulletin boards. (This was before the days of Twitter and Facebook.) The system gave a score of 1 to 10, and if we saw a 7 or higher, we knew the community was in bad spot. That information influenced how we engaged with the users and what new features we introduced, and when.
– Measure for where you are now. Today, with social technologies, it’s easier than ever to monitor and measure how the community is responding to your company and products. Keep in mind however, that when you get started the response you get back might be weak because there will not be millions using your product. Remember to plan to grow, but only deploy and spend for scale when you know you have a hit on your hands.
– Decide what’s important. I absolutely believe in developing metrics on the key things that matter, such as revenue, cash on hand, customer adoption and product delivery. Many of these are best developed and measured with formal methodologies like Key Performance Indicators or Success Indicators (KPIs or KSIs) and Objectives and Key Results (OKRs).
– It’s not about the information you discover, it’s what you do with it. As every general knows, no battle plan withstands the first engagement of the troops. As every coach knows, the winning plays from practice don’t always end up the same way in the game. And as every entrepreneur knows, all the agreed upon plans fall apart as soon as there’s user engagement. Revenue might grow faster than you anticipated, or it might not be anywhere near where you thought it should be. A product may be out on time, or it might get stuck in beta for extended months. Don’t get bogged down on what didn’t happen, but use that information to determine what to do next.
– Keep communicating and keep learning. Check in with the team regularly and communicate how you are doing on a daily and weekly basis. Check in on a monthly basis with the board. There is no end to this process. It’s a constant journey—and a constant evolution.