Month 1: Decide on Your Flight-Path
By Nicole Sorochan
As Avinash Kaushik often says:
a metric is only valuable if it is actionable
The purpose of this chapter is to help your company decide on a realistic goal to reach in seven months and then help you decide on the metrics that will help build momentum, keep your team motivated, and help you improve and adjust as you progress on your journey.
Are you aiming for the space station, the moon, mars or a nearby galaxy?
Too many SaaS companies set ambiguous targets such as ‘1 million users’, ‘2% of a unique addressable market’ or ‘as many customers as we can get’.
Not only are these objectives obscure; they aren’t grounded in reality.
Your sales and marketing targets teams are set up to fail from the start.
You will task your team with unrealistic sales expectations and set false expectations for investors.
Plus, without small continual victories along the way, you will demoralize your team.
You have to know precisely where you are going if you want to find the shortest path there.
Set your flight plan
Keep it simple and measurable.
If you have 3,000 users right now, a handful of big name customers, and a small team, don’t aim to ‘explode and reach the moon’. It’s cool if that happens, but you need to build specific, targeted actions into successful outcomes.
Here is a sample 7-month outcome.
Now, before you laugh at the simplicity of the metrics below, be honest. Wouldn’t you be happy if you had all of the things below working for your business?
First, pick one big vanity goal
Vanity metrics are evil of course. But they can also be big motivators and help clarify the big goal.
If you are completing small milestones like the ones below, you will be building long-term, steady growth.
But you still need a big goal in the horizon that helps your team keep moving.
This big goal will organize your culture, show you what work is required ahead, and inspire your team to become their best.
How to select big goals that fuel progress
Jim Collins calls big goals BHAGs and we believe that having these large goals is essential to growing your SaaS company.
As Collins explains,
One way to drive progress is through BHAGs (short for Big Hairy Audacious Goals). With his first dime store in 1945, Sam Walton set the BHAG to “make my little Newport store the best, most profitable in Arkansas within five years.” As the company grew, Walton set BHAG after BHAG, including the still-in-place goal to become a $125-billion company by the year 2000. The point is not to find the “right” BHAGs but to create BHAGs so clear, compelling, and imaginative that they fuel progress.”
Example of a big goal in the SaaS space
Moz uses large goals to fuel their growth. For example, their recent goal is to get one million subscribers by May 29th, 2018.
Currently, they only have 21,616 subscribers. They have big dreams and big plans. But, if you know Moz, this is more than a pipe dream and they have the funds and intelligence to do it.
Don’t shoot for the moon right away
While you want a big goal, you need to have the discipline and ability to break that big goal into smaller steps. If Moz told their team to get one million subscribers and then just dove into code for the next five years, they wouldn’t make it.
You need smaller goals and metrics to measure your progress.
You don’t reach big goals by ignoring the hard work and accountability that happens in the middle of the journey.
Sample big goals
So, your big master plan might be to grow to a five million dollar company in five years.
But for the next seven months, we want you to focus on a big goal that is measurable and achievable. Think big, but be realistic.
A few sample goals will help to motivate your team:
- Grow from 3,000 to 5,000 paying users in 7 months
- Hit $100k in monthly revenue in 7 months
- Cut churn rates by 30% in 7 months.
Even if you don’t hit this goal, you’ll still be much further along for trying.
Remember, this vanity metric is a guiding light. Its purpose is to motivate you and to help define what success looks like.