4 Things Founders Should Focus On To Multiply Business Growth
Several years ago, I made the decision to start on my entrepreneurship journey. Since then, I've built startups to sell enterprise contracts to companies like T-Mobile and Verizon, worked with founders funded by investors like a16z and gone through intensive accelerator programs like Y Combinator.
Between the joys of sleepless nights, stress of fundraising and 3 a.m. customer support requests, I've picked up a number of key insights along the way that will help you succeed in your business:
1) Measure Output, Not Hours
"There are no silver bullets for this, only lead bullets." - Ben Horowitz, Co-founder of a16z
As with any company, time is money. But, how much progress is enough?
One of the major things founders are unaware of when starting a company is just how much can be accomplished in one day. Many founders I’ve talked to have started out with the mindset that 5 highly tailored sales reach outs a day is a good day. In reality, if your conversion rate is 10%, this means you’ll close 2 new customers each week with potential enterprise deals usually taking several months or years to close. In most cases, this is too slow to be interesting and these businesses fail due to lack of growth and revenue.
To give you an idea of the level of grit expected from founders, on any given day, I was doing between 100–200 sales reach outs per day and 20–40 prospect calls per week, while building our product in the evenings and answering (European) customer chat requests at 3 a.m..
2) Validate Riskiest Assumptions First
Many founders I've talked to have avoided showing their product to prospective customers. These founders spent months or years building their first product and polishing code that was eventually thrown away because their customers didn’t need the product built.
Start each day by asking yourself, "what’s the riskiest assumption I’m making?"
For Airbnb, this was: “Can I get a complete stranger to rent out my air mattress for a single night?”. Then, build the minimum viable product (i.e. MVP) to test this assumption. In the case of Magic, this was a single webpage with a number people could text. The major benefit is, if the assumption is wrong, then you will have saved yourself a lot of time, energy and resources which you can use to validate other ideas. And if your assumptions are correct, you can confidently double down on your business idea.
If you’re looking to quickly turn your idea into reality, try out one of the free 10 to 12-week startup programs like Startup School or Y Combinator. My experience was, within 4 months from coming up with our initial idea at Y Combinator, our team had posts on publications like CNBC, thousands of users, and enterprise contracts to deploy apps to over 3,000 devices at wireless stores nationwide.
3) Focus on Customers
“Innovation is saying no to 1,000 things.” - Steve Jobs
There will always be a growing number of tasks that constantly need your attention. It’s easy to get overwhelmed nonstop but prioritization is key.
Focus your attention only on the most urgent, important and valuable tasks first and, if a task is taking too long to finish, ask yourself if it’s absolutely necessary to complete the task now or if there’s a quicker way to complete the task. Unless you’re working on something that lives depend on (e.g. a defibrillator or a bank), it’s almost always better to launch something 80% complete and polishing it with customer feedback rather than never releasing a feature.
At the end of each day, don’t ask yourself how busy you were, or how many hours you worked; instead, ask yourself, what did I do today to help the business metrics I care about?
4) Avoid Vanity Metrics
"Vanity metrics: good for feeling awesome, bad for action." - Eric Ries, author of The Lean Startup
Most founders are optimists by default. We believe that if we just do “this one thing” or “that other thing” everything will turn out all right. In reality, it’s not that easy. In order to balance your optimism, you must measure the right metric and your progress against your goals.
What is the one metric that you care about above all else? All other metrics can be derived from this one metric and measuring the wrong metric will almost certainly spell disaster for your business. I’ve seen founders incorrectly focus on vanity metrics like site visitors, views, clicks, shares, number of prospects and more. Think about “how does this metric contribute to my business growth?” If your goal is to be the product leader in an emerging market, your goal will be something like “over 50% of developers choose my product over any other option”.
Focus all of your attention on the one metric that matters the most (e.g. Lives Saved, Revenue, DAU (Daily Active Users)) then measure and hold yourself accountable each week.
- Measure Output, Not Hours
- Validate Riskiest Assumptions First
- Focus on Customers
- Avoid Vanity Metrics
As I start to advise more and more founders, I’ve been noticing trends in the areas they need to focus on. Some founders work 16+ hours each day but end up no better off than their status at the start of the day. It's critical to inject a little bit of strategy into your work to make sure you're heading in the right direction. Focus on your output, rather than the hours worked or the checkboxes ticked.
How have you moved the needle for your business today?