Brad's Books and Organizations

Books

Books

Organizations

Organizations

Hi, I’m Brad Feld, a managing director at the Foundry Group who lives in Boulder, Colorado. I invest in software and Internet companies around the US, run marathons and read a lot.

« swipe left for tags/categories

swipe right to go back »

Battlestar Galactica KPI

Comments (20)

Often One Number Is All That MattersAs Amy and I get to the end of Season 2 of Battlestar Galactica, I’m noticing more and more management and leadership lessons. Oh – and it’s awesome SciFi.

In my experience, it’s a challenge for CEOs and management teams to get focused on a small set of numbers that drive behavior. I talked about this in my post Three Magic Numbers. I regularly suggest that you should only have three numbers that you focus on daily – that reflect “what is going on right now in the business.”

You should be able to discern what is going on from the daily trend of these numbers. Sure – you’ll look at plenty of other numbers, but these are the three you focus on every day. You don’t need fancy tech for this – just a white board.

If you are a BSG fan, you’ll recall the white board behind President Roslin’s desk. It has one number on it. The number of survivors alive at that moment. This number started showing up in the opening credits some time in Season 2, and after a few episodes I noticed it changing each time in the credits, often based on what had happened in the previous episode.

This is BSG’s KPI. The number of humans alive. Right now.

When I reflect on this KPI, I realize it drives all the behavior on BSG. The easy behavior to focus on is keeping the number from decreasing. But as Gauis eloquently states late in Season 2, if the trend line continues, based on a complex regression analysis he’s done, the human species will be extinct in 18 years. Soon after, Admiral Adama reminds Roslin that the number generally just goes down, and that Roslin had said early on that if the human species is to survive, the colony needs to start “making babies.”

This is an obvious set up for a much more complex social issue – that of pro-life vs. pro-choice. But obvious set up aside, Adama is focusing on the KPI and reminding Roslin that the goal is for it go up, as well as not go down. It turns out there is a lot of richness in the number.

In my world, as companies grow, I notice a proliferation of KPIs being tracked. On a periodic basis, I encourage CEOs to keep paying attention to all the numbers, but surface – on a daily basis – the three magic numbers that drive their business.

Do you know your three magic numbers?

  • http://blog.kwiqly.com/ James Ferguson @kWIQly

    What Irony

    We deliver a tool that generates KPIs for energy waste causes and that allows a best predictor or eigenvector of the KPis to be identified for any portfolio of buildings.

    This tells what matters most, how much each thing matters and how confident you can be that the KPis represent the causes of total waste, So it is like a tool that tells you the top N for a small domain space but does it well.

    The irony is that as a startup we have very few effective business metrics and they evolve too fast.

    Being B2B we need a very small number of clients to provide “insanely great” service to. But given that our prospective clients are typically Global Titans we have very little way of developing patterns of behaviour as each is a “law unto themself” (and why shouldn’t they be if we want to feed at their table).

    Absent patterns, and with giant clumps of business opportunity it becomes hard to metrics and thus define patterns or norms, and without these it is very hard to define KPIs

    So for us the numbers are not what matter but the facts
    a) What will they pay for and when
    b) What is blocking progress on each deal
    c) How should we focus development.

    The rest can go hang – but a KPI need not be numeric !

    PS we just got asked for an API so by your definition unless we want to suck http://www.feld.com/wp/archives/2008/05/no-api-you-suck.html we better get our asses in gear. But API use could become a very important and very measurable KPI, because not only is it commercial, but it brings in network effects.

    • http://www.feld.com bfeld

      I’ve never found the qualitative / subjective KPIs to be that effective in a startup / fast growing company. It’s the same thing that causes MBOs to suck – they drive behavior, but there’s always a lot of interpretation as to the specific behavior being driven and whether or not it’s being effective.

      While I think the qualitative measures and analysis can be useful in certain situations, they don’t fit within my three magic number framework.

      • http://blog.kwiqly.com/ James Ferguson @kWIQly

        Agreed – and I hope we an get there.
        Meanwhile –
        Do you have a view on how to define KPI when sales metrics are inevitably very “lumpy” – I think we have to define more predictable slow varýing proxies like engagement, user counts (your answer above to Douglas on Daily Active Users makes sense to me), but are there other meaningful thoughts you have ?

        • http://www.feld.com bfeld

          Break down the sales process into small pieces. Look for measurable components. Measure them and throw away the ones that aren’t clearly demonstrating forward or backward progress.

          • http://blog.kwiqly.com/ James Ferguson @kWIQly

            Excellent – thanks.
            To rephrase think in terms of definitive steps on sales “ladders” rather than more statistical sales funnel analysis

  • http://www.dougjq.com/ Douglas Quattrochi

    I finished BSG a couple of months ago and was disconsolate at the realization that not only was the series done for me, but I was probably one of the last people in the world to be watching it: there was no one left to talk to about it. Let me know when you catch up. =)

    As for my three numbers, I think it’s real tough to do at a startup, where there’s so much uncertainty. Eric Ries talks about vanity metrics being bad, but I think for one of my nascent projects, which is super-niche, the challenge is getting the word out. So there I’d pick new unique visitors and favorable mentions as the only two right now. Is that bad?

    • http://www.feld.com bfeld

      I discover new people to talk BSG with every day – the joy of an awesome series!

      I suggest you translate “unique visitors” into “daily active users” (DAUs) – this is a much more precise and powerful number. Make sure you define DAU correctly – the user has to actually “use” your software – not just hit the landing page.

    • http://cimasmetablog.tumblr.com Cima

      Hey @douglasquattrochi:disqus ! I hope this message doesn’t sound overly “pushy” to you. If you want to talk more about Battlestar Galactica, you can join the Google+ community. It’s a smart, inclusive community of fans.

      As for the post by @bfeld:disqus , it’s a very good observation by Brad Feld. I wonder what the KPI or “magic numbers” would have been for the Cylons’ plan. I think by season 2, it would be apparent that some of the Cylons had different ideas for how the plan should have been implemented, and thus, their KPI goals would have also changed. I guess, their main goals would have actually changed by then. Makes you wonder if thinking about your competitor’s KPI would make you change your own goals and strategies.

  • http://byJess.net/ Jess Bachman

    Well to continue the analogy with another sci-fi series, Falling Skies (since I have seen BSG), current survivors would be an apt KPI for the struggling New United States in Charleston, however in one episode, one faction wants to hunker down and play it safe, and another faction wants to take the offensive to the aliens, knowing that they will never be truly safe until they are defeated. So playing it safe might be better for the KPI in the short term, but there are big and risky initiatives to tackle for the long term KPI. Decisions, decisions.

    • http://www.feld.com bfeld

      Indeed! Excellent example of the tension around a KPI.

  • Avi Brown

    This is exactly what I needed to read this morning! Not only do I absolutely fracking LOVE the new BSG, but I’m up against a unique challenge as a startup CEO where I actually need to do some magic number shrinking. I know this sounds counterintuitive, but it actually makes sense at this moment because it’s in support of the crystallization of the vision that I founded the company on. I’m not talking about a full pivot so much as a whittling down to the core opportunity underlying the initial vision. Sometimes this requires saying no to business opportunities that actually undermine company vision and goals. It’s not easy! I guess the BSG metaphor would be if Adama had to sacrifice some of his population magic number to turn the end result of the regression analysis on its head.

    • Nikki Braziel

      Wow, Avi. I love your last sentence. That’s kind of how I feel looking at my numbers. I guess the BSG equivalent would be “lose humans now to make more humans later.” It’s awkward. But I suppose that’s what happens in battle, right?

  • Ryan Smith

    Alistair Croll and Ben Yoskovitz’s book “Lean Analytics: Use Data to Build a Better Startup Faster” is a great resource for helping startups identify their One-Metric-That-Matters (OMTM) or their 2-3 KPIs that are really important to driving growth. I highly recommend people check it out.

    On a separate note Brad I love when people use analogies to fictional worlds to support real-world lessons. Narrative is a great way to support innovative thinking. Alan Cohen writes, “Reading fiction helps by removing the denial that drains our imaginations. The ability to shift your thinking beyond simply accepting the conventional wisdom is frequently a key success factor in building an innovative company.” Here is a short Medium post I wrote about why fiction/narrative is important for companies but also why the best stories happen to entrepreneurs that can tell them, if anyone is interested: https://medium.com/on-startups/dd18de280244

  • http://influitive.com/ Abdallah Al-Hakim

    Love the fact that you are continuing to write about BSG. It is an awesome show. My three numbers as a marketer at the moment are number of leads qualified, qualified lead that turn to opportunities and opportunities that won. We have a target number for this quarter and it drives our campaigns and other marketing related activities.

  • Brooke Treseder

    I am such a huge fan of BSG that after reading your last blog post, I might go back and re-watch the whole series. Love the show and it is so much more than SciFi. I try to explain to non BSG fans how deep the show is regarding race, discrimination and religious intolerance but you just don’t get it until you watch it!

    Regarding KPIs, I have found as a Salesforce administrator that one of the best tools for tracking sales KPIs is app from Insight Squared.

    They offer a free sales funnel app on the AppExchange that quickly displays the length in days for each sales stage, the win rate for moving from one sales stage to another and the total close rate. All which are very important KPIs for sales.

    Anyone interested can check out the app here: https://appexchange.salesforce.com/listingDetail?listingId=a0N3000000B3hU1EAJ

  • Marc Albanese

    Great way to twist BSG with startups. My wife and I went through the series in the winter. After watching a show, recommend the online review: links via http://thunderpeel2001.blogspot.com/2010/02/battlestar-galactica-viewing-order.html. Not as important in the first two season but things get somewhat complicated in season 3 and on. Btw, no magic number just yet – still trying to complete the demo.

  • Avi Brown
  • Brett Schklar

    Fracking great analogy

  • http://twinenginelabs.com/ KeithHanson

    Ryan pointed this post out to me and, after reading it, we’ve decided to implement it in our own company :) We rolled it out this week, explained how the business works and how that number is affected. Comparing the goal to actual felt like a wet blanket (shouldn’t it feel that way when you’re actively improving? :D), but now I’m seeing our team rally around the number and try and creatively figure out ways to bring that number up.

    We’d been debating for a good while about being even more transparent than before, and this post kicked us into gear to make it happen.

    Thanks for the inspiration!

  • Nikki Braziel

    I’ve left the email version of this post in my inbox for a week now, because sci-fi/business analogies brighten my day. I’m always in the market for Star Trek analogies as well…

    But, seriously: thank you! What a strong, visual way to remember both how simple and poignant KPIs can be. I went back and read the Three Magic Numbers post and also appreciate the opportunity to dialogue with my co-founder about what numbers we should be looking at every day.

    Being a product company, daily website visits, daily website orders, and daily wholesale orders are important. Being a late seed-stage company preparing for a Series A round, there’s the “money in the bank” number…

    But what about the days when the numbers aren’t inspiring? What internal barometer do you use to butress your decision to “stay the course”? Especially early in a company’s life? How much stock do you place in qualitative data? Customer reviews? Thanks!

Build something great with me