Artificially constraining your company to one goal creates velocity and creativity

The odds have always been against startups; the vast majority fail. It’s a high-risk endeavor with no one-size-fits-all formula for success. There are many success factors outside a founder’s control, but you can control the specific behaviors and actions you take to achieve goals in the face of adversity.

Relentlessly resourceful

Paul Graham boiled the number one trait that defines a startup founder down to two words: relentlessly resourceful. He writes, “If you want to know whether you’re the right sort of person to start a startup, ask yourself whether you’re relentlessly resourceful.”

Being relentlessly resourceful sounds simple enough, but anyone can say they are something. What does that quality look like in practice?

Resourcefulness: Using constraints as a creative mechanism for achieving goals.
Relentlessness: When one attempt fails, you try another. And another. And another.

The founders of Airbnb proved to be relentlessly resourceful when they started building cereal boxes in their living room to fund their fledgling bed and breakfast idea. Graduates of the Rhode Island School of Design, the pair used their skills to focus on the “breakfast” side of their business after they struggled to rent out air mattresses in strangers’ apartments. They created novelty cereal boxes to commemorate the 2008 presidential elections, sold out of the cereal boxes and landed in the national news as a result. Before this point, the company was in massive debt and struggling to stay afloat. It’s a point where many might quit. But being relentlessly resourceful means not giving up and finding a way forward against all odds.

Every startup faces constraints, some are real, and some are artificially manufactured. Airbnb didn’t have venture funding when it first started, and the monetary constraint they were facing was very real. For funded startups, the luxury of runway can become their Achilles’ heel if founders aren’t relentlessly focused on a single goal and making quick and consistent progress toward achieving it.

Having multiple goals slows you down

Nuance can bring decision-making to a standstill. Many companies have multiple “North Star” metrics—sometimes as many as there are departments. How do you decide on the right path when you don’t know which metric you’re optimizing for? As soon as you say, “Well, it’s this, but also that,” there’s suddenly no objective way to decide what to do. Every option has tradeoffs, and you’re shooting for multiple markers of success which may conflict with each other in the short term. In this situation, decisions become political instead of objective.

The goal as a constraint

Introducing constraints helps you focus and make quick decisions. Ideally, you should set one ambitious goal and achieve 20% growth on that goal every two weeks. Consistently achieving 20% growth on a single goal every two weeks will demonstrate significant progress as growth compounds over time.

Constraining to a single North Star goal is unexpectedly liberating. By shrinking the scope on the one hand, you throw the door wide open with the other. Giving people one thing to rally around and removing distractions creates the ideal environment for unleashing creativity. If you have many goals, you’ll probably focus on best practices only for attaining each of those. Now if you have one goal, you’ve got dozens, even hundreds of ways to get there.

The second-order effect of reducing to a single company goal is it’s much easier for people to rally around. Whatever size your company is, everyone is now on the same team and working towards the same thing. That’s why it’s so important to be decisive and own your decisions. Founders should avoid justifying their decisions by falling back on “the board” or “investors” wanting something. If you’re not prepared to be accountable for that decision, that’s a sign you shouldn’t do it. It’s deflating for the team. If you don’t believe in it, why would they?

Time as a constraint

A CEO can speed up development by an order of magnitude. The natural pace of things is just slower if nobody is hopping up and down at the top to go faster. There’s almost no limit to how slowly things can move—think of Parkinson’s Law. So how do you create velocity?

Ruthlessly cut scope to small iterations that can ship and have an effect in just two weeks. This is critical to creating a culture of shipping. If you only have two weeks to achieve something, there’s no time to waste. There’s a really tight feedback loop when you have just one goal—one metric to hit—and a short time in which to do it. Suddenly you need to be hyper-focused and decisive. It’s hard to create that kind of bias for action without a constraint.

Relentless = willing to try anything

Some of your tactics will be scrappy. They might not be flashy or admirable. Airbnb’s early growth can largely be attributed to its founders relentlessly emailing people listing their rooms for lodging on Craigslist. LinkedIn scraped my address book and started emailing everyone without my consent.

You don’t need to do unethical things, but they don’t have to be pretty, either. Maybe there’s a big market competitor that lost the trust of everyone, and you have to pick a fight with them, blog post after blog post after blog post. That might not feel the best, but it will get you the new users you signed up for. As long as you don’t have product market fit, you need tons of ideas, and you need to run them all and see what works. Run them all, but evaluate them all.

This approach doesn’t scale for the long term, but doing things that don’t scale is part of startup life. It’s the opposite mentality of “build it, and they will come.” It takes a lot of manual effort to build the momentum needed to take off. Founders must dig in the dirt themselves—write the blog posts, participate in the community forums, cold call your LinkedIn network, and ask your friends and family to sign up their friends. Figure out how to be your company’s first marketer, salesperson, and customer success team. Putting in the manual labor upfront will set up the growth trajectory needed to expand the business.

The evolution of the north star metric

Don’t reinvent the wheel when choosing a north star metric. There are four common metrics most companies pay close attention to, and a natural evolution for moving from one metric to the next. The four typical metrics are attention, active users, revenue, and profit or net present value.

Focus on gaining attention first. If no one knows about your company, you aren’t going to start generating revenue magically. Generate early awareness through content marketing and community building and measure website traffic. The average visitor-to-lead conversion rate for SaaS businesses is about 7%. If you spend six months growing website traffic by 20% week over week, you can convert at a much higher rate with less effort. Open core companies should also consider community contributions to the open-source code. Companies that can incrementally grow community contributions can develop their product faster and benefit from contributors organically sharing the project within their personal networks.

Once you hit your attention goal, focus on active users. Showing 20% growth of active users every two weeks proves that your product has real traction. It’s OK if most active users are free users in the beginning. Keep focusing on growing that number while you add more paid features to the product. When it’s time to focus on revenue and moving users from a free to paid tier, the hard work of getting people into the product is already done. Focusing on profit will come later as the company has matured.

Constraints facilitate creativity and velocity

It’s natural to want to solve all the problems at once when faced with a long list of unknowns. But like an untethered creative brainstorm, you’ll quickly circle around without clear direction. If all options are on the table, no option gets the attention it needs. By artificially constraining yourself to a single goal and committing to making fast, incremental progress, everyone’s creative focus is aimed in the same direction. Relentless progress on one goal sets the momentum for the next.