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When I was first starting out, my goal was to ship a product, get 500 daily active users, and hit 80% retention.
One year later, I rolled up to the YC interview with those stats, and they told me, “That’s the wrong way to think about goals. How much revenue do you have?”
Oops.
One month after receiving that feedback, I got 40 paying customers. That led to getting VC money, 10k MRR, and a kick ass team.
As an early stage founder, your goal should be to validate your startup idea. And the best way to do that is to get users to put their money where their mouth is 😀
A ton of members in my founder community — Chine, Yansen, Luigi, Vaibhv, Rishi, Nemo, etc. — all got in YC.
What was the one trait they shared? Having revenue.
Once you get traction, you’ll be able to get in YC, raise from top tier VCs, and attract any talent you want.
I find that when founders have lots to do, they CHOOSE easy and known over hard and unknown. I run a community of 180 founders from Stanford, YC, and more, and my biggest takeaway is that everyone says you should talk to users, get early paying customers but founders hardly ever follow the process. Technical founders put off marketing/sales, and instead, code an app. Business founders put off marketing/sales, and instead, make a pitch deck. Product founders who put off marketing/sales, and focus on product.
This practice makes you confront the reality of your business, so that you stop avoiding the hard thing, because it’s right in front of you.
I spoke with Ben Sand (x2 YC, member of FC), read Traction (method used by 80k companies), and developed this goal system I use to hit my weekly revenue goals.
Example:
Let’s suppose I’m trying to sell my new $200/mo emailing tool.
I’ll set my week’s goal to be to talk to 10 customers, and close one at $200 MRR
After the week ends, I sit down and reflect.
“HOLY SHIT! I actually closed a person. Next week, I’ll try to close two people!”
In the grid, I create a new column with today’s date (Sept 1), and set a new goal for the week.
A week later (Sept 7), I go over my results that week.
“FUCK I didn’t hit close 2 customers. Only closed 1.”
Because I didn’t hit my goal, I’ll write a paragraph explaining why, and what I’ll do differently next week. This prevents me from falling in the same trap over and over again.
”Here’s my reflection: POOP! I didn’t hit my goal. Right now I’m just Dm-ing people on Reddit. Looks like I need to try to do more methods this week. I’ll post in 2 facebook groups, Product Hunt, and 2 slack groups this time! Let’s get 15 users on the phone!!”
Over time, your goal grid should look something like this:
As you evolve, you can also more important weekly metrics to the grid. I started adding customer satisfaction & engagement in because if 100% of my customers have a 10/10 experience, then I can expect to get more referrals and grow faster.
Once you start making revenue, you’ll likely start hiring people. Write their name on the board. Now, they will be the ones checking in each week and being accountable for their number.
Example of mine (10k MRR):
I used to set ambitious goals and go hard for 3 days. A month later, I’d check my progress and be like, “What happened?” I found it SO HARD to look at the numbers because if things weren’t going well, a part of me felt like “I’m not good enough.”
I invented a practice that helps me relieve this trigger “I am not good enough” and force me to track my goals each week.
I make sure to block 90 minutes in my Google Calendar every Monday morning to update my board. Even though part of me hates it, here’s what helped me stick the practice. I tell myself:
Since I’ve used goal grid, I’ve increased MRR, experimented way more, hired new people… Now, I make this weekly meeting 10/10 importance. Meaning, the only reason for missing this is vacation or death. I haven’t missed a single week since :)
Set a revenue goal. (try $30 for consumer | $5k for enterprise)
I recommend using it for the first week, and seeing what happens. It has worked for me, and many other YC founders. YC makes everyone to set a revenue goal for their cohort.
Before, I set non-revenue goals, and it amounted to nothing substantial. I spent months hours getting waitlisted users, talking to users, and building website — basically everything except optimizing revenue. One year later, I realized no one would pay for what I was building.
Now, I set revenue goals. It has led to finding real pain points and value much more quickly than talking to random, non-paying users.
Optimize leading metrics (# articles written, # DMs sent, customer feedback score) to help you achieve your lagging metric: Revenue.
For example: If I’m at $1k MRR and all I do is write 1 article a week, maybe I can get to $10k MRR much faster if I optimize number of articles made per week.
At this point, you’ll be able to raise from YC 🙂
Most people applying have $0 revenue.
The bottom columns “$ money in” and “$ money out” tells if you’re spending more than you’re making.
If you’re optimizing profitability:
A good ratio (money in : money out) is 3:1
A great one is 5:1!
Imagine getting $5 for every $1 you spend. Sounds good to me :D
If you’re optimizing growth:
Use this metric to calculate how much runway you have left
Generally 18 months is a good amount of runway
I’m running a community to help founders build businesses that get into YC. We’ll teach you how to talk to users and get them to pay you. Then we’ll help you prep your pitch for VCs and intro you to them :D
Many of our founders raised $1M+ or got in YC after joining. Recently Chine, Vaibhav, and others got in YC W23 after joining (They all had revenue). Also Orri raised $2M, Calum raised $800k, and Shirley got her first few angel checks closed. They’re all heavily involved within the community 😀
Check it out https://founderscafe.io
If you want to download the Goal Grid, feel free to grab it here: https://founderscafe.io/resources/goal-grid
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