Baselines and Touchstones.
Boost VC tracks a metric - How many companies raise more than $1m after our money, every 6 months. We don’t think it indicates success, but it points us in the right direction. It would be like having a compass that generally said “You are kind of going North.” It gives us a pulse on the venture market, and our portfolio.
Baselines are important, it gives you a clear indication of direction and progress.
It surprises me how few baselines we have in our daily lives to give us an indication of success. The only baseline I know of for raising children: Are they alive? And then… are they happy/healthy? There is no metric that shows “15 smile/frown ratio this week.”
For Doctors, you check with them once every year, and get blood work done — and they are supposed to know everything about your year because of that one event? They weigh you, check your height, take your blood, and then nothing for the rest of the year. Doctors are proactive in a 15 minute meeting through out the year, the rest of the time they have to be reactive - which is the problem with the healthcare system. The baseline for your health is an annual check up - which, personally, I can’t believe gives you any insight into my health.
For education, the baseline is the GPA. I don’t think the GPA represents whether or not you understand things - It represents whether or not you understand your teacher. But at scale, it’s hard to track a baseline metric for every kid on the planet or in the country. My problem with education is that on paper, I had a great education: Andover, UCLA - I learned, but I’m not sure any class ever taught me to understand.
For enterprise startups, generally growing at 10% revenue MoM is a solid baseline to see if you are growing fast. For Consumer startups a general baseline would be 30% growth MoM, or around 10% WoW.
Now that we track a metric at Boost VC, I couldn’t live any other way. Baselines are a key indicator of what your incentives are, and how you will accomplish your goal. All your tactics to accomplish the goals should be pointed at the baseline of “What is important/ What is a good touchstone to track that?”.
As we are headed into a fear based market. It’s going to be important that companies and teams understand their Touchstone/Baselines. It’s going to be important for a more persistent health check on the companies and it will help focus on the direction of the company in order to build healthy companies.
Metrics reveal what people, businesses, society, etc. value. A good metric is like a compass: it allows you to veer off course but never lose sight of the destination.
But you're right; many key metrics are either non-existent or outdated. Take a high GPA: it shows a person is good at school, but says very little about their education.
As for touchstones, I'm a big believer in checklists. Companies have key metrics and milestones, as should individuals. Identify what you're seeking in your own life ("baseline") and develop activities ("touchstones") you can check off daily.
I have an Evernote with my a daily checklist:
"Baseline" = be a reliable and balanced human being
- Read (learn something)
- Spend time outside
- Eat healthy foods
- Social (stay connected)
Identify the "final picture", then spend the rest of your life developing the film. A great company is great insofar as it continues to pursue greatness in the day-to-day. Same with people; we are perpetual works-in-progress, and metrics and touchstones help illuminate the path we pursue.