How to miss your numbers

Startups are smart people guessing the future. When you guess, you will be wrong. A lot. Sometimes your numbers will be high, sometimes…

Startups are smart people guessing the future. When you guess, you will be wrong. A lot. Sometimes your numbers will be high, sometimes low, but it is certain that you will miss.

But, there is a right way to miss (and it is not to exceed your projections, although that makes misses easier to talk about for sure).

The right way to miss requires knowing what you believe about the root causes of the miss and what you are going to do as a leader to fix the problem. A forecast is just a prediction of the affect a specific action will have on a specific business measurement/metric in a certain time period.

When you miss, there are three states of the world

1. Wrong on timing: You are doing the right thing but the effect is taking longer than you thought to move the metrics. Be patient. You are on the fastest route to your destination accounting for normal traffic. You need to keep doing what you are doing.

2. Wrong on impact: Your activity is not delivering the effect you believed it would — the metrics are not moving enough relative to the effort/resources you are putting into this activity. Hit the brakes and follow an alternative route. You need to stop this activity and pursue plan B.

3. Wrong on strategy: Your activity is not moving the metrics and it is unclear what you should do next. Pull over and look at the map. You need more time to figure this out and a new hypothesis to test.

The art is knowing your situation and leading through the miss.