Memo to 2015 Startups: Careful With Year One K.P.I.s

So, you're set to launch a business in 2015. Or perhaps you launched a business in recent months. Chances are, you're trying to decide which KPIs (Key Performance Indicators) to track most closely. Here's the twist: Regardless of the KPIs you choose definitely keep the following warning in mind...

Treat your KPIs and your business like a marathon -- rather than a sprint. A key example: When Amy Katz and I co-launched a business in 2008, we worked just about every weekend and every holiday.

  • The upside: We were incredibly responsive to customers and readers 24x7. 
  • The downside: We established KPI outcomes (web traffic, bookings, etc.) that were difficult to beat over the long haul (though we did).

Let me give you a basic example. During Year One of our business, we kept content and sales programs flowing during the Christmas and New Year holiday seasons. The effort gave us great momentum as we headed into Year Two.

But as we pressed on into Year Three and beyond, we started to think more like long-term business builders rather than first-year entrepreneurs. Suddenly, we began to see that it was incredibly difficult to step away from our business during holidays or for a traditional vacation -- because we'd fall short of our KPIs during those "we're off" windows.

Your goal for year one: Even as you work crazy hours to get your business off the ground, consider the business performance milestones you're setting every week. Then, look ahead to Year Two, Year Three and beyond. And consider: How are you going to grow and automate your business in the years ahead so that your KPI dashboard looks healthy and green for the long haul, rather than red and struggling all over.

Remember: At some point you are going to exit your business -- whether it's through an executive management transition, retirement, company sale, or another type of ownership change. The value of your business is tied to those KPIs -- which better show healthy movement up and to the right -- at least in terms of revenues, EBITDA and net income.

That health requires long-term vision. Sometimes we forget about that marathon approach as we sprint toward Year One deadlines and goals each and every day -- including holidays.

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