OKRs in a pre-product market fit startup
That is by far the most popular Objective on our trial accounts. And, can you blame people. It is raison d’être for having a business. Yes, yes… make the world better place, impact – I know. But, it’s so much easier to make the world a better place when one is a billionaire.
A bit of context, first
Let’s backup a moment and recap what OKRs bring to an organization:
Do what you’ve set to do. Don’t let the urgent get in the way of important.
Make sure everyone is pushing in the same direction.
Let everyone know what’s happening and how well (?) things are going.
Instill the culture of ownership and accountability.
In an essence, OKRs help you do better whatever it is that you are doing. OKRs are a multiplier. And without a base, it is irrelevant how big your multiplier is.
Scaleups – the poster child of OKRs
Wikipedia defines scaleup company as a:
A scaleup (company) is a company who has an average annualized return of at least 20% in the past 3 years with at least 10 employees in the beginning of the period.
Essentially, scale up company is a company that found the product/market fit. It found the formula and now it has to do more of it, it has to do it better and it has to do it faster.
It is of no surprise then, that it is the scale up companies that adopt OKRs with most success. Increase revenue is a fine Objective, if one has a pipeline and a reasonable predictability in a sales process. Without a repeatable sales process, increase revenue is not an Objective – but rather a cry of desperation.
Grow! Grow you stupid revenue! Grow, goddamit!
So, what about pre-product market fit startups
OKRs are a framework for achieving Objectives. Now, the question is – do startups even have Objectives? Of course they do.
However, just as startups a very special type of business organizations, so are their objectives special.
I particularly like the Steve Blank’s definition of a startup:
A startup is a temporary organization designed to search for a repeatable and scalable business model.
So, now we can see how startups, indeed, are an organization – albeit a temporary one – as well as we can see that it has Objectives: Find the repeatable and scalable business model.
As OKRs help organization achieve its Objectives, they are applicable to pre-product market fit startups, but just as anything else about startups, the Objectives will be special.
Defining OKRs in a startup
Defining OKRs in a pre-product market fit startup is very much an exercise in deconstruction.
If you don’t have revenue, you ask yourself: Why is it that you don’t have revenue?
Perhaps, you don’t have opportunities in your pipeline. If that is the case, then ask yourself: Why is it that you don’t have opportunities?
If you don’t have opportunities, chances are that it is because you don’t have leads. The next question is: Why don’t you have leads?
Let’s assume that you have a product, but don’t have leads. Not an ideal place to be at, but it happens. At this point, you have found a good place to set your Objective: get leads.
Getting more leads is a good place to start, but as we all know – there may be many different reasons why you are not getting leads. Perhaps your product sucks. Maybe, your messaging is bad. Or, your target market is too big, too small, too lateral, too whatever…
If you have a good idea why you don’t have leads, than make your Objective to rectify that problem. For example, fix the product.
- Objective: Stabilize the product
- Key Result #1: Reduce the number of open bugs to 50
- Key Result #2: Reduce the number of critical bugs to 0
- Key Result #3: Implement 40 automated tests for most popular features
If you don’t know why you don’t have leads, and in my experience, this is quite common, make your Objective to figure out why you don’t have leads.
- Objective: Understand why you don’t have leads
- Key Result #1: Pitch your product to 10 people in your network
- Key Result #2: Create 20 different landing pages
- Key Result #3: Find 5 non-obvious competitors to your product
Obviously, the actual OKRs will always depend on your particular situation. However, as the saying goes – you eat an elephant one bite at a time. OKRs, in many ways, are a structured framework for a very old idea. Decide what you are going to do – define the desired outcome – execute – assess – repeat.
OKRs are not a magic pill that will make things happen. Just because you want something really, really bad – it doesn’t mean you will get it.
There are countless posts and interviews where Google alumni claim that OKRs made Google what it is today. But keep in mind, Google also had PageRank. OKRs may help you on your journey to build the next great thing, but they are just a method.
Wishing is not enough.
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