🚦 3-2-1 Traction — the drivers of momentum, key SaaS benchmarks, and my dumb mistake

Also in this issue: the utility of diversity, and how successful companies create unbeatable focus.

Aug 14, 2023

Hey friend 👋

I took a little time off from writing this newsletter so that I could become a dad, but I’m back, baby!

Hopefully, you missed my presence in your inbox. 😅

For those who are about to ask… my kid is Liam Edward Miller, he was born 11 days late at 6lbs 12oz, 52cm long, with a fire-red mohawk. But he’s 2 months old now, and with terrifying muscle strength.

Here is the obligatory photo from this weekend, if babies are your bag:

photo of Liam doing tummy time on my bed, with his head lifted high

But enough of the dad brag — you’re here for startups. Let’s go. 👇

three ideas from me

one: diversity wins, baby!

This is going to be a short one, because what more need be said?

But I’ll say it anyway: diverse founding teams have been repeatedly shown to outperform homogenous teams.

And I’ll say it again: diversity not just a cultural value — those with a greater representation of gender, ethnicity, background, and more, just fare better in the marketplace.

And yet… only around 17% of startup founders are women, and minority representation remains depressingly low.

So take a moment to look around at your team and ask: are you sabotaging yourself?

two: when in doubt, opt for momentum.

Entrepreneurship is hard, and we’re often faced with difficult choices with no clear right answers.

(psst… there aren’t any right answers anyway)

This leads founders into a trough of ambiguity: decision fatigue, analysis paralysis, the groan zone. We spend time trying to determine the right action, and thus take no action at all.

But momentum wins — every time. Make quick, tough choices. Move fast and break things. Charge forward. Onwards and upwards.

Be decisive, responsive, and adaptable. Relentlessly focus on immediate impact.

Because inaction is how startups die.

three: I made a dumb mistake.

It’s the most common startup mistake, by far:

Throw an experiment out into the world to “see what happens.”

But an experiment is a controlled test of an hypothesis. If you have no hypothesis, you’re not running an experiment. You’re just faffing around.

Insert me and my own little face-plant: before I went on my newsletter “paternity leave”, I asked you for feedback in the form of a simple survey.

I didn’t define a benchmark; I just asked questions about things I wanted to know.

Good news? 85% of the reviews were 5 stars, and nearly 60% said they shared my newsletter with someone else. I mean… aw, shucks, guys. 😊

But anything more complicated was impossible to interpret. For example, I wanted to learn if the 3-2-1 format was working, so I asked how disappointed you’d be if I stopped: 57% of you would be at least somewhat disappointed to see my original ideas go away, while only 29% felt similarly about the curated links.

So… now what? Is that good? I dunno. 🤷‍♂️

Instead, I should have made an hypothesis and commitment: what percent of my readers getting value out of curated links is sufficient to warrant the effort? Pick a number, run the experiment, get validated learning, make a decision.

Or, if you prefer — learn, build, measure.

But I didn’t. And now I have ambiguity and motivated reasoning. So, obviously, I’m big, and it’s the newsletters that got small.

Anyway, before you do anything, define what success looks like. And we all make mistakes.

II. two ideas from others

How the World’s Best Companies Build Unbeatable Focus ↗

Many leaders intuitively feel it’s crucial to keep expensive resources, like staff or machinery, constantly occupied to ensure efficiency.

This is often wrong. The top-performing companies prioritise projects instead of resources, accepting the potential decline in individual efficiency because they recognise the immense cost of halted work.

In other words, they change their focus.

Top 7 metrics for SaaS success ↗

Until a startup becomes successful, most financial metrics are functionally zero. At the very beginning, they’re literally zero. So we use “innovation accounting” to benchmark the metrics most likely to lead to success in the future — as opposed to directly measuring the success itself.

When you’re in the very early stages, this can simply be qualitative assessments of conversations with customers. But, as you begin to acquire customers, you’re likely measuring some subset of the pirate metrics.

But! As you begin to scale, you need a more robust set of metrics that predict your future success. If you’re in SaaS, it would be a great boon to noodle these 7 key numbers.

III. one question for you

What is one thing you can remove or delegate to boost your momentum this week?

Traction Thinking

Discussion about this post