At Rocket Science our video game company was struggling. Hubris, bad CEO decisions (mine) and a fundamental lack of understanding that we were in a “hits-based” entertainment business not in a Silicon Valley technology company were slowly killing us.
It is critically important for the founders of a company to intimately understand the company’s Key Performance Indicators (“KPIs”). Founders cannot hope to grow a company in any meaningful way without an almost obsessive focus on its KPIs. Why? Because KPIs, if constructed correctly, give management and potential investors a cold, analytical snapshot of the state of the company, untainted by emotion or rhetoric. This focus must not be limited to the KPIs themselves, for they are merely measurements of outcomes. We look for founders to have an understanding of what levers can be pulled and what tweaks can be made to improve the business, which will then be reflected in its KPIs. So the focus should not be on the KPIs themselves, but the meaning behind them and knowing what impacts each one.
