The secret powers of boring non-vanity metrics!

‘Distance is the journey. Displacement is the result.’ - Jaclyn Moriarty

Running a startup is hard work - there are always a lot of priorities to juggle between and not enough time, resources or people. There are customers, suppliers, team, investors and many other stakeholders to manage, plus every process is in such infancy that it consumes a lot of bandwidth to manoeuvre. In the midst of all this, it sometimes becomes natural to assume that all the hours put in must be leading to progress. But like we know from physics, distance ≠ displacement.

Having had the fortune of meeting hundreds of businesses from their inception and observing the ones which eventually broke out and became successful, a clear pattern recognition comes to mind:

• Companies that maintain a solid KPI (Key Performance Indicators) sheet
• Companies that are too caught in other priorities to get this in place

While companies in the first bucket don’t have guaranteed success, we’ve seen their success rate to be much higher than average and rarely seen companies in the latter bucket break out. Such high correlation makes one assume some causation between maintaining a good KPI sheet and success.

Here are the few benefits we’ve observed in companies with good KPIs in place:

• Numbers don’t lie - Early stage businesses are always balancing between maintaining a positive external perception while working round the clock to grow. In the midst of all this, a good KPI sheet provides factual grounding on how the business is really doing vs the story we’re telling everyone.
• Strong feedback loop - In our personal lives, we’ve seen feedback loops work really well in keeping things on track. Whether it's the speedometer of a car or the weighing scale for someone trying to lose weight, constant numeric feedback acts as a clear signal of progress or lack thereof and tells us where to course correct.
• Aligns everyone in the team - A well created KPI sheet brings alignment across the organisation on what the focus area should be, what to work on and equally importantly, what’s already working and we can conserve the additional energy being spent on it.

Here is a KPI sheet format which we’ve broadly seen work across many types of businesses:

It may seem like a very simple thing to put in place, and it indeed is. In spite of that, we’re surprised to find the number of businesses where this gets pushed out to a much later time than it should. The reason is that in the set of ‘Urgent’ vs ‘Important’ priorities, it mostly ends up finding itself in the ‘Important but Not Urgent' bucket and hence never gets prioritised. The time spent in creating a KPI sheet seems wasted because it isn’t directly adding value to the company / customers or suppliers, which is why it requires second order thinking to be able to see the value of it.

We’ve seen tremendous benefits in businesses that put this in place early on, and review it at least once a month (ideally weekly) with their leadership team. The truly exceptional founding teams share the same KPI sheet with their leadership team, investors as well as advisors on a monthly basis as a great way to raise accountability as well as invite healthy dialogue. Some notable examples here are the Urban Company founders Abhiraj Singh Bhal , Varun Khaitan , Raghav Chandra and Mamaearth founders Varun Alagh and Ghazal Alagh . This is one of the many practices that we at Titan Capital help businesses institutionalise from early on in their journey.

Once again, building a business is hard work but a solid set of KPIs help provide the constant feedback loop businesses need in order to self improve. Happy business building!