How to Set KPIs and Goals

Cheung defines KPIs as quantitative measures of business health and recommends one primary metric to focus decisions. It should show customer value, reflect recurring or enduring value, lag behind delivered value, and respond quickly enough to guide action. Revenue, especially monthly recurring revenue, is usually the strongest choice; active users can fit businesses that need scale or network effects before monetizing.

For active users, define what counts as a user instead of counting signups as meaningful use. In marketplaces, choose a measure that reflects value for both sides: nights booked for Airbnb or weekly trips for Uber. Cheung suggests three to five secondary metrics, such as retention alongside user growth, to give a broader view without creating analysis paralysis.

Cheung recommends setting a weekly growth rate for the primary metric so teams can get frequent feedback and turn larger goals into manageable steps. She cites 5% to 7% week-over-week as a good YC growth rate and 10% as exceptional, while emphasizing that goals should reflect the product, market, current scale, and sales cycle. She advises focusing on organic growth early and setting exponential rather than linear goals.

Track the goal each week, make the growth target visible, and rank ideas by their likely impact on next week's result. Missing a target once or twice can be useful if the team identifies the obstacle; if the cause is unclear, Cheung advises talking to more users. Repeated misses may signal that the team needs to rethink its approach or idea.