Aug 1, 2019 · 23m · y-combinator
Adora Cheung - How to Set KPIs and Goals · Y Combinator
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In this Y Combinator lecture, Adora Cheung provides early-stage startup founders with a practical framework for defining Key Performance Indicators (KPIs) and establishing weekly growth targets. She details how selecting a primary metric, supported by targeted secondary metrics and disciplined weekly tracking, drives rapid iteration and long-term business success.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. How this is scored →
The partners as informed peer 0.0 Guest teaching 6.7 Guest disagreement 1.2 The partners pushing back 0.0
speaking balance: gold is the partners, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 18:55 Condemning early paid marketing
Adora forcefully dismisses paid user acquisition for early-stage startups, calling it 'cheating growth' that masks real product problems.
Hardest push from the partners ▶ 9:17 No host pushback presentThe presentation is a solo lecture format without host interventions, resulting in zero host pushback.
Biggest teaching moment ▶ 6:05 Dismantling the free feedback illusionAdora directly educates founders on why free users give misleading feedback compared to paying customers, urging founders to demand payment immediately.
The partners hold their own ▶ 9:17 No host expertise demonstrationThere is no host involvement or rebuttal during this solo instructional lecture.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | The partners as informed peer | Guest teaching | Guest disagreement | The partners pushing back | Why |
|---|---|---|---|---|---|---|
| Why Tracking KPIs Matters | 0 | 7 | 1 | 0 | Adora Cheung delivers a solo lecture breaking down why tracking a single primary KPI matters and dismantles vanity metrics like email signups or monthly active users (MAU). Host scores are zero because this is a solo lecture format without host intervention. | |
| Revenue vs. Active Users and Special Cases | 0 | 7 | 1 | 0 | Adora explains the difference between revenue and active user metrics, cautioning founders against the trap of offering products for free without validating willingness to pay. She details how marketplaces like Airbnb and Uber define primary metrics and addresses exceptions like biotech. | |
| Selecting Complementary Secondary Metrics | 0 | 6 | 1 | 0 | Adora advises founders against relying solely on a single 'North Star' metric without secondary metrics like retention, warning against analysis paralysis while tracking three to five complementary indicators. | |
| Defining Weekly Growth Rate Goals | 0 | 7 | 1 | 0 | Adora details benchmarks for weekly growth rates drawing from Paul Graham's essays and YC batch data, showing how 5-10% weekly growth compounds dramatically over time compared to 1% growth. | |
| Guidelines and Considerations for Growth Goals | 0 | 7 | 2 | 0 | Adora outlines principles for goal setting, specifically warning against using paid marketing early on which she categorizes as cheating growth rather than validating product demand. | |
| Tracking Progress and Handling Real-World Growth | 0 | 6 | 1 | 0 | Adora concludes by providing tactical advice on visualizing growth trajectories and utilizing weekly targets to diagnose underlying startup issues. |
Statements from this episode (12)
Adora Cheung: Tracking one primary metric outweighs juggling multiple variables
“If there's a way to get 90% of the job done with just one variable, that's better than having a bunch of variables that gets, Let's say, 91% of the job done. In this case, the job to get done is quickly determining how well your startup is doing.”
Adora Cheung: Revenue is always the best primary metric for startups
“Revenue is always the best metric. I pay you a hundred dollars to use your product, your software. I must at least value that a hundred dollars. Active users, ah, using the product once a week, or, ah, once a day, we call that weekly active user or daily activ…”
Adora Cheung: Monthly active users is a poor early-stage startup metric
“A lot of people pick MAU, monthly active user but this is, but this is usually not a great metric because it takes time to understand the impact of movement especially in a startup this early as in your startup. And so many things can happen within a month. An…”
Adora Cheung: Free user feedback is a trap for early-stage startups
“That's a trap because free users will give you different types of feedback The users who are actually paying you. Paid users are just more serious about the product and hopefully will be more serious about giving you feedback.”
Adora Cheung: Marketplaces must measure metrics where both sides receive value
“Well, you pick a value that actually represents them both getting value. So in Airbnb's case, it would be nights booked, right?”
Adora Cheung: The 'north star metric' concept misleads early-stage founders
“People have referred to the primary metric as a north star metric, and I actually don't like the term north star because it kind of people have interpreted it as something you just focus on this one metric and then ignore everything else.”
Adora Cheung: No single metric tells 100% of a startup's story
“There's no metric that actually tells a story that tells a hundred percent of the story, maybe 90%, but not a hundred percent. And so sometimes founders fool themselves by literally only tracking their primary metric and nothing else.”
Adora Cheung: Top YC Demo Day startups grow 5% to 10% weekly
“So I actually went back and I looked at the good startups who pitched in recent YC demo days. So these, if you think about these startups, they were three months prior, they were all in the phase that you are probably in today. And it turns out the growth rate…”
Adora Cheung: 1% weekly growth means a startup lacks billion-dollar potential
“If you only manage one percent weekly growth, it's a sign you haven't figured out things yet. It doesn't mean that you have a horrible business. You can run a great small profitable business growing one percent week over week, but it's not a good sign that you…”
Adora Cheung: Good enterprise startups compress sales cycles from months to days
“Like good enterprise startups that time to sale goes from months to hopefully days if not hours.”