How to Set KPIs and Prioritize Your Time

As a startup founder, nobody tells you how to spend your time. You might have heard that you need to turn over every rock and optimize every metric to build a successful startup. While this is true to some extent, you still have to choose how you're going to spend your time each day.

Your main goal is simple: get to product-market fit as quickly as possible. When you're moving fast, it's crucial to work on the right things. You need to run fast in the right direction.

The Problem with Feeling Busy

It's very easy to feel busy and productive without actually moving your business forward. Here are some common examples of things that make you feel productive but don't matter:

• Optimizing paperwork tasks (good enough is often all you need)
• Perfectionism on features nobody is using
• Premature optimization (building for scale you don't need yet)
• Choosing intellectually hard problems over building what your users want

Some companies, in their early days, were trying to pick a legal firm to work with. Sure, they needed a lawyer and had to choose a good one. There were so many to interview, and many wanted to take them out to lunch or drinks, or have them visit their offices. This felt flattering and glamorous. They felt so busy.

But at the end of the day, they hadn't even launched.

Choose a good lawyer? Yes. But do it quickly and move on. This is not impacting your KPIs.

Why Speed and Direction Matter

When you're doing a startup, time is at a premium. The faster you get to market, the sooner you earn money and can reinvest it in your business. You become less dependent on outside capital, or if you want to keep raising, you'll have more leverage to raise money on better terms.

Taking more time to get to market means you burn more money. Moving slowly means competitors have more time to copy you and catch up. Time spent without making real progress also has an emotional and mental cost and can raise red flags externally in fundraising and hiring.

So don't waste time on things that don't matter.

How to Prioritize Your Time

There are two ways to think about prioritization. One is how you spend your time on your startup versus other things in your life. I can't tell you how to make this decision—it's very personal and depends on what else is going on in your life.

But I have two important points: speed matters, and it's crucial to align with your co-founder on expectations.

When we discuss prioritization, we mean how you spend the time you've allocated to working on your startup. Let's make sure you're doing the most impactful things with your valuable time.

Setting the Right KPI Goals

The reason setting the right KPI goals is critical is that it reminds you of the urgency of growing fast. Early growth compounds, and tracking goals weekly reminds you of this.

At YC, they talk a lot about the early days of Airbnb where the founding team wrote their weekly KPI goals on their bathroom mirror. They were facing that reality multiple times a day.

Step 1: Identify Your Top KPIs

If you've launched, your primary KPI should be revenue growth. If you don't want to make revenue growth your primary KPI, you need to really push yourself on why. A non-revenue KPI is rarely the right one.

If you're pre-launch, your KPIs in the short term might be weeks until launch or number of conversations with users. But once you do launch, quickly shift your KPIs to revenue growth.

Step 2: Set Weekly Goals

Decide what your KPI goal is for this week. For example, 10 more paying customers by next week. Make sure this ladders up to any longer-term goals you have.

Step 3: Identify Your Biggest Bottleneck

You also need to identify your biggest bottleneck or problem in moving your top KPI.

Here's an example from a YC company called SuprDaily, a daily grocery subscription service in India that sold to Swiggy in 2018. SuprDaily faced a scenario early on when they launched V1 of their product. There were a ton of things to optimize—this was an operationally complex business with mobile apps, ops tooling, inventory management, and messy on-the-ground logistics.

Their north star was growth, and they were able to see clearly that their bottleneck was the conversion of users who actually got pretty far down the sign-up flow and then churned. So they asked themselves: why are high-intent users not converting?

By focusing on this question, they realized that high-intent users were dropping out because a lot of users wanted a specific milk brand that SuprDaily didn't carry. It wasn't a UX friction issue or an app issue. So they onboarded that milk brand rather than beautifying their sign-up screen.

Once they solved this, they started looking at how to convert users that were maybe farther up the funnel. By the time those users got farther down the funnel to the highest intent phase, they now had that top milk brand on the app.

By onboarding this new brand, SuprDaily was able to increase their conversion rate by 50%.

A Simple System to Move Your KPIs

Here's a framework to prioritize aggressively to optimize for your KPI goal:

1. Write down any ideas that you might have to hit your goals. Don't start working on them right away—it's really easy to chase shiny new things.

2. Rank by probability of success and then sub-rank with respect to complexity or how long it's going to take you to do this task.

3. Pick only a couple of things to try.

4. If your KPI isn't moving, be really honest about why. Ask why several times until you feel like you can actually understand the real reason.

5. Do honest retros on your weekly initiatives. Are you predicting impact and complexity well? Did you complete all the tasks you were expecting to complete in the sprint?

6. Move fast. Learn and then do something differently the next time if what you did didn't work. The definition of insanity is doing the same thing over and over and expecting different results.

Don't let indecision slow you down. Just pick a path and keep moving. Ideally, you're going to be growing fast. If not, talk to a lot of users fast. Churn through your bad ideas fast so you can get to working on the right good ideas as fast as possible.

What Should and Shouldn't Be on Your Task List

Here are some things that should be on your task list:

• Talking to users and responding to customer support messages
• Building features you know your customers will pay for
• Getting users to pay for what you've built

When you're spending time talking to your customers, there is a direct path to revenue growth. The only way you know what your customers want is by talking to them all the time, and the only way to grow is by building something people want.

Here are some things that should probably not be on your list (a.k.a. fake progress):

• Investor "coffees" - Don't do this if you're not actively fundraising
• Conferences - Other than a few select industries, this generally won't move your needle at an early stage
• Arbitrary technical milestones - Spending time optimizing technical benchmarks, launching an Android app unless you're hearing clearly from your users that this is a burning pain point

This fake progress list isn't anything to be ashamed about. Smart people put these things on their list all the time. These are all tasks that can make you feel good, boost your ego, provide metrics you can brag about on LinkedIn. They might make your mom proud or your ex-girlfriend jealous.

But what they don't do is get you closer to product-market fit.

Common Mental Traps

Here are some common tricks your brain plays on you when you're trying to prioritize:

1. Checking Things Off a List Feels Good

Many people are drawn to low-leverage tasks because they provide a sense of accomplishment. They allow you to check things off your list, and it's so tangible at a time when your startup's future is uncertain.

Don't fall into this trap. Examples include spending too much time optimizing paperwork, incorporation, equity, taking meetings with potential investors, advisors, partners, or building cool hard features that you don't know people want yet.

2. Fooling Yourself into Thinking Something Is Working

Sometimes you can fool yourself into thinking something is working when it's really not. Be honest with yourself. It doesn't feel good to admit to yourself, your teammates, your investors, or your mom that things aren't going well, but you're not doing yourself any favors by not diagnosing problems early and often.

Slow growth can be deceptive. It's easy to mistake slow growth for product-market fit.

3. Perfectionism and Indecision

When nothing seems to be working, it's really easy to make every decision feel like it's going to make or break your company. In reality, most decisions don't matter, and for the ones that do, it's okay to decide wrong first and then fix it later.

Just keep moving. The best-case scenario is making the right decision quickly every time. This is completely impossible. I recommend the second-best option: make pretty good decisions quickly, and if they turn out to be wrong, fail, learn, and switch to what's working quickly.

4. Mitigating Downside Instead of Chasing Upside

Downside protection is straightforward and satisfying. Fixing little problems is very easy, but rarely where the innovation happens. Chasing upside requires risk-taking, creativity, a lot of false starts.

Get in as many iterations as you can. For example, we hear a lot of ops teams talking about getting themselves out of spreadsheets. At this stage, spreadsheets are fine until they're not. If they're working, stick with them.

Instead, spend your time finding out what your users need in order to use your product every day instead of once a week. That's the upside chasing we're talking about.

5. Working on Secondary Problems Instead of the Existential One

You may tell yourself, "Hey, my 150 users are asking for one-click ordering, let me go build it." You only have 150 users. Maybe you've only had 150 users for the past three months, and they're starting to churn, and no one new is signing up. That's your biggest problem. Go solve that.

Choosing the Right KPIs

Remember, we can't afford to waste time running fast in the wrong direction.

Primary KPIs

Your primary KPI is the main metric you use to measure whether your business is on track. For the vast majority of startups, your primary KPI should be growth, and ideally revenue growth. This indicates that you've built something people want and you're on track to building a huge business.

There are a few exceptions. A marketplace business might choose signups or GMV as their primary KPI, or an early enterprise business with a long sales cycle might choose letters of intent.

Secondary KPIs

Secondary KPIs are things that need to be tracked moving in the right direction to make sure you're not cheating on your primary KPI. Here are some examples:

• Retention and churn - These contribute to your revenue growth
• Unit economics - Make sure you're making money on each user and not giving away free money and calling it growth
• Customer acquisition cost - Depending on your stage, you may not need to optimize this right now, just have a sense for your payback period

Keep this list small and relevant. Three to five secondary KPIs is reasonable.

Vanity Metrics

It's very easy to fall into the trap of prioritizing these metrics. They feel good and provide external validation. Just ask yourself: is this directly on my path to revenue growth?

What Good Growth Looks Like

To illustrate what a laser focus on growth looks like, here's a side-by-side comparison of DoorDash on demo day and Rickshaw, which was also a delivery platform.

Both companies had a laser focus on order volume as a top-line metric. This allowed for clear, focused execution and resulted in strong and very similar early traction.

However, post demo day, the paths diverged. Rickshaw had trouble fundraising despite comparable early traction to DoorDash. This caused them to make a decision out of fear. Instead of continuing to have a clear focus on top-line growth as DoorDash did, they tried to optimize for both growth and unit economics. They tried to hedge, and this was very dangerous.

This split focus put them in a weird no-man's land of slow growth, which can kill startups. The main message is to choose your primary KPIs and don't try to get smart and optimize for two or more hard things at once.

Setting Targets

Assuming growth is your primary KPI, how much growth is enough? This depends on your business and your stage, but in Paul Graham's classic essay about growth, he notes that for a company going through YC, 5-7% week-over-week growth is good, and 10% week-over-week growth is exceptional.

Small changes in weekly or monthly growth rate really compound and make a difference in the long run. Early growth is better than late growth.

Factors That Impact Growth Rate

• Latent demand might boost early growth. Some early users will be willing to put up with an inferior product experience because you're solving an urgent need, but that growth rate might be tougher to sustain later.

• Sales cycle length for enterprise businesses might be long. This should go up and down over time, but it might impact early KPI and goal setting.

• Organic vs. paid user acquisition - Early on, organic is ideal. You should know where to find your first few passionate users and talk to them directly.

• Retention and engagement - You have to do both. Both will impact your revenue growth, so get a sense for which one's going to have more impact first.

Setting Targets: Top-Down and Bottom-Up

There are two approaches, and you should do both:

Top-Down Approach

Set a goal or milestone that you need to reach sometime in the future. For example, $5,000 in MRR by the end of June. Back into that weekly growth rate that you need to achieve to reach that longer-term goal.

Set a target and obsess over it. Compounding matters, so getting an early start helps a lot.

Bottom-Up Approach

Ask yourself what you think is realistic for you to get done in the next week, then project out from there.

As a thought exercise, ask yourself: what could we achieve with unlimited funding? A lot of people think that funding is a bottleneck, so let's remove that. What could we do in the next week with unlimited money or resources? Then ask yourself: what creative ways can we still achieve that even with limited funding?

Set your goal between top-down and bottom-up. Either is actually fine. I recommend periodically doing both to see whether what you're doing is realistic, achievable, and ambitious at the same time.

Non-Revenue KPIs That May Be Tempting

CAC to LTV Ratio

You might hear these buzzwords together. These are generally concerns for later in your business, post product-market fit. For now, we recommend you only worry about payback period. Ideally, your payback period is zero—zero dollars spent on CAC, so customers are profitable on day one.

If you do need to spend on CAC, get a sense for how quickly users pay back that CAC and whether you're reliably hitting it.

Free Sign-ups or Daily Active Users

Paying customers will have very different expectations for a product than free customers will. If you plan to charge for your product eventually, don't mess around getting feedback from free customers. It'll likely be the wrong feedback.

Get paid from day one, or at least don't count those users as part of your growth.

The main exception here is marketplaces or products that have a strong network effect and need volume in order to have utility. Uber is a great example. Without enough drivers on the platform, the user experience wasn't good enough for riders to pay a premium for.

Exceptions to Revenue KPIs

Hardware companies, biotech companies, and enterprise businesses with a long sales cycle can be more challenging to measure growth. In these cases, something like letters of intent, contracts, maybe even technical milestones might be reasonable metrics.

But please keep yourself honest and make sure that these are actually indicators of actual progress and growth, and audit them frequently.

Summary

Prioritization means working on the things most likely to impact your top KPIs. It's critical that you choose the right KPIs and then are honest with yourself about which tasks are most likely to move those KPIs.

You'll never get to everything on your task list. Use KPIs to prioritize your work, and only work on the biggest blocker to your primary KPI. Be honest with yourself and fail fast.

The key insight is that speed matters, but direction matters more. Focus on what moves your business forward, not what makes you feel busy.

Notes

[1] Thanks to Y Combinator for many of the frameworks and mental models referenced here. Their essays, talks, and office hours have helped shape how early-stage founders think about speed, KPIs, and product-market fit.

[2] The SuprDaily example is drawn from a YC founder talk where they shared their learning about high-intent users and bottlenecks. The takeaway: focus on real user friction, not assumptions.

[3] Paul Graham's benchmark for startup growth — 5–7% per week is good, 10% is exceptional — comes from his essay Startup = Growth. It's a great north star for founders early on.

[4] "Doing things that don't scale" is a classic lesson from PG. Early success often looks unscalable — replying to every user manually, hand-holding onboarding — but it's where insight and traction come from.