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1/ Goals vs. Metrics: How big companies fail
Goals are a desired outcome. Metrics are how we measure progress ( https://avichal.com/2017/07/06/metrics/)
Delightful products & happy customers are good goals.
Revenue is a metric to measure progress. Revenue is not a goal!
Goals are a desired outcome. Metrics are how we measure progress ( https://avichal.com/2017/07/06/metrics/)
Delightful products & happy customers are good goals.
Revenue is a metric to measure progress. Revenue is not a goal!
2/ Startups are good at goals, bad at metrics.
They start to solve a problem (the goal). They make decisions intuitively b/c they are close to their customers.
But metrics are necessary for rational tradeoffs. To hire and scale, startups must get better at metrics.
They start to solve a problem (the goal). They make decisions intuitively b/c they are close to their customers.
But metrics are necessary for rational tradeoffs. To hire and scale, startups must get better at metrics.
3/ Most companies become *too focused* on metrics as they scale. They mistakenly treat metrics as the goal.
They start to ask, "Should we even do X if it doesn't move this metric?"
Companies then start to do unnatural things to move metrics at the expense of the goal.
They start to ask, "Should we even do X if it doesn't move this metric?"
Companies then start to do unnatural things to move metrics at the expense of the goal.
4/ No metric is perfect. So companies use metrics that are easy to track and easy to move.
But how do you measure and improve "trust," "beauty," or "fun?"
It is easy to trade off these intuitively good things for revenue b/c revenue is easy to track and move.
But how do you measure and improve "trust," "beauty," or "fun?"
It is easy to trade off these intuitively good things for revenue b/c revenue is easy to track and move.
5/ This creates new HR challenges:
How do you reward designers for making a product fun? Or engineers for investing in user trust?
The best builders have intuitions well-aligned with goals.
As a company makes decisions based on metrics instead of goals, the goal-oriented leave.
How do you reward designers for making a product fun? Or engineers for investing in user trust?
The best builders have intuitions well-aligned with goals.
As a company makes decisions based on metrics instead of goals, the goal-oriented leave.
6/ These creative, long-term, goal oriented builders (aka entrepreneurs) are driven out.
Some start companies. Others join startups.
They all crave the freedom to make tradeoffs that are hard to measure, may not move metrics, but are intuitively correct.
Some start companies. Others join startups.
They all crave the freedom to make tradeoffs that are hard to measure, may not move metrics, but are intuitively correct.
7/ Startups fill the void in the market of opportunities that big companies struggle to measure.
More startups = more fun, beautiful, and useful products that big companies will never create.
This is one reason of many we need 1000x more startups.
More startups = more fun, beautiful, and useful products that big companies will never create.
This is one reason of many we need 1000x more startups.
8/ As a corollary, if an incumbent can put metrics against your product or market, they are more able to compete with you.
Many startup successes come simply from the incumbent's inability to puts its existing metrics framework around the startup's product or market.
Many startup successes come simply from the incumbent's inability to puts its existing metrics framework around the startup's product or market.
9/ 1 out of a 1000 startups who build more fun, beautiful, and useful things will create something so valuable that billions of people will use it.
This 1 in a 1000 company starts to scale, realizes they need metrics...and the cycle begins again.
This 1 in a 1000 company starts to scale, realizes they need metrics...and the cycle begins again.
