The Say/Do Founder Hack: Your company’s health in a simple ratio

Working in the startup industry, you are always on the clock, always in a race against time. In this world a strong bias toward action seems to pay off and doing things fast is often better than improving what you will do with further discussion. In my experience working in startups and now as an investor and board member working with startups, you can tell how your company is doing by tracking how much of what you say you are going to do actually gets done. This is the Say/Do ratio.

1 or less is healthy. You say you will do something and it gets done, often leading to other things getting done that you did not plan, but become obvious as you are executing.

1 to 1.5 is worrisome. In the lower end of this range it implies that you either have the perfect strategy and have thought of everything and the world is playing out exactly as you planned (doubtful), or your teams are following a plan on paper and lack the freedom or creativity to extend. In the higher end of this range your plan was too ambitious or you are failing to execute or both.

1.5 or higher is trouble. As the ratio approaches 2, you have real execution and management problems.

Both start-ups I worked at were competing in markets full of big companies trying to kill us. At both of these companies we had plans that evolved along with our view of the world and what we knew about our competition and our customers.

At my video game company, other game publishers like EA and Activision were happy to let us take the risk required to validate (or dis-prove) the fitness gaming market. But, they told me, if it worked they would buy us cheap or just steamroll us from behind. At AND 1, as we started to scale into percentage points of the basketball market, we got a copy of an internal sales presentation from NIKE that described how they were going to kill us in 3 slides:

slide 1: Our 5 best selling shoes and our logo as seen through a rifle scope -crosshairs etc.

slide 2: Mushroom cloud

slide 3: The 5 shoes NIKE was offering to retailers to replace us

In both cases, we planned our strategy, set goals and did what we said we were going to do. In both cases we moved fast and acted decisively. Not sure if our strategies were the best, but our actions were good enough to at least buy time. This was valuable because as a startup we could to do more with that time than the big companies could. We listened to the consumer more. We iterated the product more. We focused on surviving more.We said more. We did even more than that.

During intense times, our Say/Do ratio dropped well below 1. We delivered more than we thought possible, faster than we planned and consumers loved it more than we imagined.

I say this is what the startup industry is all about and this is what startups do.