Key Performance Indicators = a set of quantative metrics that indicate how wealthy your business is doing

<ol><li>Represents delivery of real value?</li><li>Captures recurring value?</li><li>Lagging indicator?</li><li>Usable for feedback?</li></ol>

Primary Metric

Users that pays for your product are more serious giving feedback than the free users

Feedback from free vs pay users

Your product should add value to all users. Examples:<ol><li>airbnb - nights booked</li><li>uber - weekly trips</li></ol> should be a value for all types of users, the one who serve and the one who ask for a service

Pick a value across all users

Examples:<ol><li>retention</li><li>email conversion</li><li>payback period</li><li>referral rate</li><li>contribution margin</li><li>etc</li></ol>

Secondary Metrics

It’s a good idea to set a primary metric before launching. It will help to know the target.

What if I haven’t launched yet?

In early stage, like 3months in.<ul><li>Weekly 5-10%</li><li>Monthly 20-50%</li><li>Yearly 12.6x-142x</li></ul>

Best startups growth rate

set goal -&gt; draw a graph for next 10 days -&gt; print it and put everywhere very important.

Tracking Progress

YC Partner Adora Cheung covers the importance of defining and tracking KPIs to understand how effectively your startup is reaching your goals. You can find the lecture slides and transcript here: https://www.startupschool.org/videos/64 It's not too late to sign up! Register now through August 4th at https://www.startupschool.org/.

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YC Partner Adora Cheung covers the importance of defining and tracking KPIs to understand how effectively your startup is reaching your goals.  

Transcript and lecture slides here: https://www.ycombinator.com/library/6j-how-to-set-kpis-and-goals-sus-2019

This lecture is part of YC's Startup School, a free online program and global community of founders. Register and join the community at https://www.startupschool.org/

Timestamps
00:00 What is a Key Performance Indicator (KPI)?
00:39 Why do KPIs matter?
1:33 What are the right KPIs to set?
1:46 Setting your primary metric
2:22 What are the characteristics of a good primary metric?
5:32 The two best primary metrics
6:50 When should you consider active users as a metric?
9:20 KPIs for bio and hardtech businesses
11:15 Secondary metrics
12:56 The best KPI for an unlaunched company
13:55 Setting metric-based goals
15:20 How fast should I grow?
17:15 What does success look like for you?
17:40 Guidelines for defining a goal
19:45 How to pick a goal
20:44 Tracking Progress
21:18 Leveraging your primary goal
22:27 Using the Startup School weekly update

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Adora Cheung - How to Set KPIs and Goals

KPI