You cannot measure a startup's success and work on it simultaneously. Here is why.
The phenomenon of uncertainty
Most founders are not aware of the success of their startup. Measuring success is complicated by itself but particularly in environments where success chaotically depends on the current progress. That means that the initial vector is strong and has a dominating influence on the potential outcome. Since the founders work on what they regard to be the most pressing problem, they are constantly working on future progress and hence on the current success.
Consequently, the answer to how it is going is often "great" or "awesome". More often than not, this is a lie by itself but, in general, also devoid of information. The truth is, no founder can know in the moment of action if the current development is advantageous.
Recap on startup success
As we have discovered earlier, a startup is an entrepreneurial organisation defined by growth as the key metric. By its very nature, growth is a forward indicator. That indicator looks towards the future and is only accurately measurable in hindsight. The forecast of future growth itself depends on two dimensions. 1. Growth on current prospects and 2. Growth in future prospects. This definition is important since stopping all sales and marketing efforts will still result in growth by inbound leads, leads at the end of the funnel and upsells/churn. Basically, this part of growth roots in the company's current position.
The other part of growth is looking forward. Since prospecting, sales and development take time, it feeds off the dynamic we brought in six months ago that pays off now. Basically, this part of growth roots in momentum. If we stop increasing or conserving momentum, it will die down and reduce growth in the future.
The startup uncertainty principle
That analogy provides us with the metaphor of position and momentum that make up startup success. We could now link it to the Heisenberg uncertainty principle and call it a day. Not all metaphors make sense, though, in particular when we apply physical concepts based on phonetics to some completely unrelated topic (as so many authors painstakingly do with concepts from quantum mechanics to management and psychology). Back to our topic: You can measure position, and you can measure momentum. You can measure both at the (quasi) same time, and to a degree of accuracy, you can define. What you cannot do, though, is measure it when inside the startup.
For the position, there is a feedback effect. The moment you measure your success, you impact your success. Positively, you will prioritise those actions that cater to your definition of success. Negatively, because you will take time out of your work on growing to measure. The overwhelming factor, though, is subjectiveness. The measurement of success for the position must come from outside the organisation, so you cannot optimise towards an artificial metric. Also, momentum tries to measure something that happens in the future. The view towards your future will be highly subjective and thus lack objectivity.
Your best shot at measuring success
The uncertainty principle that you cannot measure success accurately in your startup is not as problematic as it seems. For one, you know how to measure it; any measurement is better than no one. If your stakeholders and prospective stakeholders, particularly investors and lenders, believe your setup, you are already halfway there. The scenario that requires a more accurate measurement of success marks the basis for hard strategic decisions.
Examples are Pivot or perceiver, carry on or close, make or buy. If you need an exact measurement of success, you must create distance. This distancing can be done by creating space yourself through resilience, elongated offsite or other techniques. Or, even simpler, ask an entrepreneur in your network or a board member to measure your success critically. The resulting metric should be painfully honest and accurate and might provide insights and intelligence you lacked otherwise. By looking past, the horizon, you will gain a tool for setting up your company for long-term success.
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