👀 How to Set Laser-Focus KPIs (as you Grow)...

2 core KPIs to guide your growing startup: Discover a simplified approach to setting and maintaining key performance indicators inspired by industry giants like Facebook and Google, ensuring strategic alignment and effective growth management.

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It’s easy to set and track core KPIs when you start – maybe it's just you and a few founding members. Simple. But keeping that laser focus gets hard when you grow and stuff gets complicated…

No worries, the good guys over at Midstage Institute developed the concept of retaining only 2 core metrics, no matter how large your business (inspired by Jim Collins’s book Good to Great).

And they make a compelling case using 2 examples from a few years ago:

• Facebook has 2 company-wide metrics:
  • Active users
  • Engagement time
• Google also has 2 across the entire company:
  • Active users
  • Clicks

Why? Well, that’s how they make money. Facebook sells advertising based on exposure, so the more people on their platform for longer, the more they can make. Google also sells ads but they get paid more on the click. So the more people click, the better.

Reverse-Engineer it like so

1. Identify your Growth Metric

This is what amplifies your revenue. In Facebook and Google’s case (all ads-based social media actually), active users because they need network effect. In free-to-paid and freemium, for example, this might be the total number of new free users, etc.

2. Pinpoint your Economic Metric

This is the single action that generates revenue – when that free user subs (the upsell) or a user clicks etc. This can usually be tied directly to a monetary value.

3. Use it to scale

What’s cool about this method is that you can use it to simplify KPIs as you grow. Each metric has millions of sub-metrics underneath it that all contribute to making it happen. So you can tie almost any employee’s action to the core metrics.

What’s more: It helps align your team’s focus and can even help you make critical growth decisions – if you can’t tie a new role’s performance directly to your 2 core metrics, maybe you shouldn’t be hiring (paying) a person to do that job.

How do you measure and ensure performance in a growing team? Hit reply and let us know…

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