How can business leaders use OKRs, CFRs, and goal setting to drive their business forward?
Objectives and Key Results and CFRs (conversation, feedback, recognition) are part of a goal setting system that John Doerr adapted from Intel that high performing organizations use to exceed expectations and thrive.
Lisa Shufro, Chief Storyteller at WhatMatters.com will share insights about how founders at any stage can use these tools to drive their business forward. As Executive Editor at Measure What Matters, and as co-founder of thesupercurious, Lisa has catalyzed change from the world’s most prestigious stages. She is best known for programs that creatively link science, technology, and business innovations with humanities, arts and culture.
Watch the full session: https://bit.ly/3bYOY98
Blog post: https://bit.ly/2PGQBkQ
Have feedback? Connect with Scott Case on LinkedIn
Visit foundersfocus.com to join the live video sessions, watch past sessions, and see what topics are up next.
Scott Case 0:00
Welcome to Founders Focus, a podcast made for founders by founders. I'm Scott Case, CEO and co founder of Upside, and I created Founders Focus to help share free resources and actionable advice. Together, we're building a community for business leaders, entrepreneurs and founders to come together to tackle today's challenges. This podcast is powered by my awesome team at Upside. Please visit foundersfocus.com to join the live video sessions or to catch up on past topics.
Scott Case 0:28
I'm excited to introduce our co-host and my friend, Lisa Shufro, who is the Chief Storyteller at WhatMatters.com. Lisa has had an extraordinary series of adventures in her life. And so I'm going to let her tell us a little bit about herself now and then we'll dive into her journey, and then we're gonna dig into talking about objectives and key results. So Lisa, tell us your story.
Lisa Shufro 0:56
Maybe I'll start with today first, which is that, as you noted I'm the Chief Storyteller of WhatMatters, which is a fancy way of calling me Editor-in-Chief, for the movement that is surrounding the book, Measure What Matters, written by John Doerr, who is the chairman of Kleiner Perkins, and a well known venture capitalist. When he wrote the book, he began bringing it to people, and the response was tell us more stories, tell us more stories. And that is how they came to me and asked me to help tell more stories about entrepreneurship, about leadership in businesses big and small, pretty much based on work that I got to do leading the editorial team for TED MED, and a few other big brands, with Jon Ellenthal, and I think I'm guessing this is rayhaan, that I've also done lovely work with. And since I am the founder of my own company, the super curious, it didn't take me long to convince myself to do it. In terms of backing up from there, Tony Shea was actually my last boss, he recruited me to the downtown project from Ted Med. The purview of that was around his vision of co-learning, which is one of three major pillars of the downtown project. And they had a pretty abrupt change in direction about a year and a half after I got there. And I was kind of faced with the question of, do I want a j-o-b?. And if so, doing what? And I noticed that even though I didn't have a steady paycheck for the first time in my life, when I looked at my wallet it was covered in post it notes with ideas for programs that I wasn't commissioned to create. And so the idea was born – could I get paid to curate conferences? Conferences that didn't exist yet. And, as it turned out my product market fit phase was in recognizing that everyone has suffered a bad conference, a conference that was boring, and that there was actually a gigantic market for making conferences less boring. So I had a couple of years where my only goal was to keep the roof over my head. At one point, I progressed to calculating how many weeks I had until I had to get a job in a coffee shop. And I'm really grateful that I stuck with it, as I hope your community will too. And I advise a lot of brands now on how to create meaningful content on four different continents and currently expanding the team. So just stick with it.
Scott Case 3:41
That's awesome. I want to stay on your journey for a few minutes. Because we'll come to one of your current projects with What Matters. But you started as a solopreneur. We have a number of people here who are starting things for the first time and it's a combination of at times a lifestyle business where it's just like you said, keep a roof over your head. How has your ambitions shifted over time? You started with Hey, I see this opportunity. You're at a different stage now where you're growing a team. Talk about that hinge moment where you went from doing this all yourself to I've actually got to build a company which includes more than just yourself.
Lisa Shufro 4:30
I think the nature of curation, luckily, is team oriented because no one person can anticipate what an entire audience is going to is going to want to hear and you should never have one person making all the decisions about a program from my point of view. So the notion of working as a team has been inherent to my approach, even when I was employed, but I think the shift is that over time going from a network of freelancers to formalizing partnerships that feel feel like they've been very stable, they've been very productive, but to begin to share financial relationships with them is a whole new step. So actually my main co-founder and I have been going through a very detailed process under the guidance of a really wonderful small business lawyer, who's written a book called The Entrepreneurs Prenup, where you basically ask each other some very tough questions like if I die or get divorced, am I in business with your spouse or your ex? And having to think as far as one can anticipate ahead of time in order to make what has been organic, but essentially non committal, something where we both have skin in the game, that's been the biggest shift.
Scott Case 5:56
I really appreciate you bringing that up. I think that too many founders, even when you're hiring your first employee, aren't as transparent and sort of forthcoming about those realities, either because you're in them in a moment of enthusiasm, and you're sort of rushing into this great new adventure, or you're sort of afraid that somehow that might drive the person away. And so just what I found is being unbelievably clear about it is so helpful. And you are entering into a partnership that both has financial consequences, and then it has life consequences for everybody that's involved. So it's nor an easy task.
Scott Case 6:40
I want to stay in this zone for a moment. We had a question from one of our Founders Focus members here around that time, if you are willing to go through that painful moment again in your life of, Okay, I've got n number of weeks before I'm going to have to put this ball down gently and go do something else. What was that like for you? Or what were the attributes of that you had to contemplate? And did you change your behavior in that time that either bought you more time or put a different backup plan in place? Sort of talk a little bit about that, because a lot of people face that, in fact, I usually talk to entrepreneurs and say that you don't really know you're an entrepreneur until you're facing missing payroll, whether that payrolls for yourself, or for somebody else. That's when you know that you're in the soup here. So talk a little bit about that?
Lisa Shufro 7:39
Well, I think I'll start off by quoting some life advice from Jon Ellenthal many, many years ago, where he quite accurately called me an idealist pain in the ass. And he was very accurate about it, I was. And I think that that's a double edged sword. It gave me the kind of entrepreneurial gumption to kind of stick to what I believed was correct, even when lots of people were telling me it wasn't practical. But in terms of sticking with what I was pursuing, because when I started being an independent conference curator, that was not a thing, most people started their own conferences or they got hired into a brand. And the notion that I could be helpful to multiple brands in making their conferences richer and more meaningful was a weird thing. And so there is definitely some of that idealist pain in the ass that helped me decide that no, I think as long as I have a series of safety nets that I can break through, so I was like, you know, in the worst case scenario, do I want to get a j-o-b and the answer was clearly no. And I even had that tested one, one day I got invited to go to the MTV VMA awards, and it was a pretty prestigious red carpet kind of gig, and I was feeling really excited and proud about the networks that I was starting to build. And then, because I didn't have a steady gig at that point, it was shortly after leaving the downtown project. I was staying with friends, because I just wasn't sure where the next paycheck was going to come from or how long it was going to take, and I was determined not to get that j-o-b. And I ended up sleeping on the bottom bunk of a five year old's bunk bed with Thomas the Tank Engine sheets the day after the VMAs. And the next morning, I went to the rental car I was living out of at that point, when I wasn't staying with friends and pulled my clothes out, I was like, yeah, this is the life I want. I didn't want to rent my brain to somebody where I couldn't think about the content that I thought needed to be out there. So that change in behavior was actually more about, in my case, turning up the volume and really believing that there was value in what I was seeking, even if I didn't have the words for it, and being willing to suffer fumbling with it, again, lessons that I learned from the excellent mentorship of people like yourself and mostlyJon Ellenthal, and I think even Ray Han is on here. But it was that same kind of people who really opened up the gates and said, keep going, keep going. So your network and your mindset – I think were the two biggest skills that helped me make that transition.
Scott Case 10:33
That's awesome. The idea that you can have consistency, and persistence we talk a lot about, but having the conviction to sort of say there is something here, even if you haven't put your finger on it yet, and just kind of continuing to bang on that. And then accepting that you're good with the circumstances that others might look at and say, Wait, you're living out of a rental car like how is that a good idea?
Lisa Shufro 10:59
It made my mom really scared.
Scott Case 11:02
Yeah, well, it is scary. And our parents and our loved ones, one of the things that makes it hard and the reason we have places like Founders Focus is it's hard for a lot of people who aren't entrepreneurs or who have their own interest in our wellbeing to actually understand that like, yeah, like I could understand living in my rental car, like that doesn't personally that doesn't surprise me at all. I'm like, Yeah, I live in a cardboard box but things are great, I've got so much great opportunity ahead of me. And like for a lot of people like Wait, what you're doing huh? So good for you for sticking with it. And also recognizing that you were okay in the situation that you were in, which that's not always the case. And if you find yourself as an entrepreneur, where you can't stomach that and it's not the thing that you want to be doing, then that's the time to reconsider. Well, thank you for sharing that. It's always fun to hear people's founder stories.
Scott Case 11:58
I want to shift gears here to well, OKRs, objectives and key results. And in particular, I think that as entrepreneurs, we tend to start at times by seeing a problem in the world and chasing down our way of getting to a solution. And that can work for a little while, but eventually you need to put some structure in place, whether it's for yourself or oftentimes when you have a broader team. And many people have heard of objectives and key results well before John Doerr published the book, many of us were stealing them from Google, and then prior to that, even Intel, but can you just give us a top level overview of what objectives and key results are and why they're valuable? And then we'll sort of dive in and unpack them a little.
Lisa Shufro 12:53
Yes, and I think I really liked the way you framed it in terms of the founding of a lot of movements and a lot of product development and a lot of great businesses is around solving a problem. I think, for John, who was really lucky to work for Andy Grove as his first job while he was still in college, not many of us get that opportunity, but he really learned about leading a company in a very stressful time. And I think what's stuck with him, or I think it's significant that the first thing he chose to write a book about and the only thing he's chosen to write a book about so far, is about leadership. So OKRs is the most effective tool John Doerr has ever encountered as a tool for leaders to set the right goals for the right reasons. And anyone who's known me for any length of time knows that I wouldn't lightly give myself over to an acronym like OKRs, objectives and key results, or death by acronym because we have so many of them in the business world.
Lisa Shufro 13:56
But it's really a way I found real value in what is the tool that we use to ensure that your strategy aligns with your true mission and values, first of all. And then second of all, how do you implement with excellence at scale? So how do you turn strategy into execution? For John, that answer is many components, one of which is a foundational skill, setting the right OKRs. Most organizations, they have goals, you can ask them, why do you set goals today? How do you communicate with them? How do you resolve conflicts that come up? Very often, there's misalignment, I want to do more sales, but we have to depend on technical and engineering capabilities that aren't built yet. And there's tension. So where do those things get resolved within your organization? How do you know you're working on the same problem at the same time? And so OKRs are John's answer to giving teams that succeed what he calls five superpowers. Focus, alignment, commitment, tracking so that you know how you're making progress, and when you're good at those four that allows a team to stretch for goals that are seemingly out of reach of such a small team.
Lisa Shufro 15:13
So it's a lightweight practice, quick, easy when you're good at it, for articulating what success looks like, the objective, and how it will be measured, the key results, some teams call them measurable goals. And the notion is there's kind of three innovations over other acronyms out there in the goal setting space. One is that they are not just top down, there's a process to let bottom up filter into what we're going to accomplish and how we're going to measure success, so that you're less likely to get stuck in the messy middle, that we all know organizationally. The second is that they're transparent, like MBOs are usually between you and your report, but the notion that we are collectively committed to the goals. And then the third is they must be measurable. So the book is really just a collection of stories of organizations that have taken this to heart and shown how when you have all of those things working in a system, these teams can deliver improbable results.
Scott Case 16:16
So let's take an example. And as our Chief Storyteller here, can you give an example of either a specific company that you're aware of that set an objective and then what the key results were, or we can use an abstraction, but I think the core around it, not only those five elements, but it allows everybody to have the same basic picture in their head about what we're trying to do. And talk a little bit about both an example of what an objective and key results are, and what's good about that? And then maybe a little bit on the timeline of how often do you refresh those? How do you know when you've when you've reached them? Just give a little bit of background there?
Lisa Shufro 17:04
Sure, sure. So the anatomy of an OKR is actually quite simple. It's learning how to write a good OKR that takes the time and requires the iteration. But the anatomy is quite simple. There's a what statement, which indicates what is the direction that we want to go in. Probably one of the best known objectives out there is about climate change, let's get carbon emissions to zero by 2050. And then there are measurements of success along the way, such as, in order to get to zero carbon emissions by 2050, we need to be halfway there by 2030. Now, that's acute example of a key result. If we are not halfway there by 2030, we know that we're off track. And we have to adjust. So from that, I'm just taking that as a top level goal because everyone's familiar with climate change, whether you believe it or not, that it's not just zero carbon emissions, there has to be a set of benchmarks, and the five or six that matter the most that tell us. So, for example, in order to get there halfway by 2030, we have to go from 55 billion tons annually, and we have to get to half of that by 2030 and zero of that by 2050. Now, how do we do that in 20 years, or nine years? We have to reduce our emissions by 10% every year going from zero today, or actually, dumping more than that in. So that gives you immediately a baseline that you can't do this by just switching your cafeteria over from burgers to vegetarian, you have to actually use breakthrough thinking. And so we know how much is done by the grid, we know how much carbon is generated by transportation, we know how much is buildings, we know how much is industrial activities, such as farming. And so you can set measurable goals for each one of those that says if we fix the grid, if we fix transportation, if we fix buildings, if we fix industrial activities in these six areas, we will get to zero emissions by 2050. So how do we convert 100% of the grid? You can see that there's a cascading of the what, get to zero carbon emissions, and the how, what's the benchmark that tells us that we're on track or off track?
Lisa Shufro 19:29
There are definitely like hundreds of examples on our website as well, that speak to challenges that I think are specific to small businesses and entrepreneurs, like how do I use OKRs for product market fit? You know, how do I do it for adjusting to the pandemic or to an existential crisis, like a competitor? How do I switch from building, which is what most founders do, to becoming the architect and letting my team take some of the work that resides in my head? How do I make sure that that's an efficient transfer so that I can scale? How do you deal with scope creep or mission creep? How do you deal with focus? You know, there's a difference between good ideas and good ideas for right now. These are the kinds of challenges that OKRs can really help solve. I'm happy to go through examples on any of those. But I think that those are ones that are very specific to entrepreneurs and founders, which I know, is a particular concern in this forum.
Scott Case 20:35
I'm going to open it up to the chat, if you are working on something where you set some goals and you think you have a decent set of what the goal is and what the measurable result is, post it in the chat and maybe Lisa, and I can workshop it with you a little.
Scott Case 20:50
The thing that I think is important. And I also have found OKRs to be particularly valuable for other reasons that you've said, and we use them at Upside, is getting started with them. And being okay that they're going to be imperfect, you often don't notice how poorly you have set the key results. Usually people get the objectives because they tend to be thinking in those terms, but the key results, you look at them after, whether it's a week or two weeks or a month, and you say Oh shit, I don't actually know how to measure that or what we're measuring actually isn't the thing that's most important. But if you don't actually start the process of setting an objective and setting some key results, and then bringing yourself and your team along to actually measuring them and evaluating them, you'll sort of never get to a place where you get good at it. And it is a very useful framework.
Scott Case 21:47
So I'm curious, Lisa, when you think about not just the measurable part of a key result, are there some tips and tricks to evaluating a key result at the time that you're preparing it? Are there some things to look for that make some better and more well crafted than others?
Lisa Shufro 22:06
Yeah. So I think the most common thing that we see is what I call the Goldilocks objective, which is it's either too wordy, it's two lines long, no one's going to be able to repeat it, or it's too vague. So we have a great example, I'll send a link to you, where the very first OKR, even on our own team, was deliver excellence. And that's too vague, right? Or it's a goal that's going to take five years, we get a lot of world peace. And really an OKR should define your day to day decision making for the next 90 days within a one year period. So I'd say the Goldilocks syndrome of too long, too short, too slow, too fast, too vague or too prescriptive, right? Telling the person what to do instead of what's the outcome that we need, I'm not going to tell you how to do it, you're responsible for telling me each week whether we're making any progress or not, whether we're making the expected progress or whether there's something we should double down on.
Lisa Shufro 23:08
So I think that's the number one thing – is how does the objective and the measurable goals outcomes, rather than a to do list? How do they work together? Are they the three to five most important things? Or are they a laundry list of your activities? Are they measurable? And those are the most common ones? Are there too many priorities? Are you trying to capture everything you're doing? Or are you trying to say these are the three to five things we need to double down on and you need to be excellent at these three things and everything else as good as you can be at it. And to your point, Scott, the set it and forget it kind of method – where you set it, but there's no mechanism for having conversations about it, it doesn't affect your day to day decision making.
Scott Case 23:57
That's it. Let's come back to that. Because I think that both communicating up front and then having a regular cadence to check yourself against them is important.
Scott Case 24:06
So we have one brave soul here who wants to workshop something with us. So here's the thing, they've launched an MVP, a web based MVP, and they're working on a mobile app if I've interpreted this correctly. And their current objective is to get a few clients, say 30 or so, to use it before we launch the app. So no pressure, how would you craft an objective and a key result around that?
Lisa Shufro 24:32
Well, your objective is not to get 100 customers, your objective is to get 100 customers who are going to sustain engagement with you. So what are the three things that will tell you that enough people are signing up and enough people are enjoying it? You know, what do you need to capture in order to find more of the people in that test cohort who are going to be the customers you're going to build around.
Lisa Shufro 25:00
So I'll give you an example like superhuman, the email client that gives you super fast email. And they made a very deliberate decision in their product market fit phase to not go after everyone who wants a better experience than Gmail. They decided to specifically go after people who were so overwhelmed by email that they were willing to pay $30 a month for it and couldn't live without the service. So they could have a much larger customer base if they just went for everyone who was willing to pay $30 for more than three months, but what they really wanted was people who were like, I can't live without superhuman. Now I'm one of those people, so I can tell you that I would be devastated if superhuman didn't exist anymore. So what is it that made me stick with them past the first 30 days, which was a very vulnerable window, they spend an hour onboarding, you cannot use the system until you've spent an hour with them one to one, using the service with them so that they can show you all the tricks and do it with you and for you for some time. Now, it's a huge investment. But their OKRs told them – find those and build products only for those who would score us eight out of 10 or higher, even though there's probably a much larger market below seven. So they figured out what to measure was customer delight. And what services do we need to build for this small cohort of amazed people? Is that helpful?
Scott Case 26:41
I think that the key is not just any client. I don't want 30 clients, I want 30 clients with certain attributes. And you might use key results to measure each of those attributes in the beginning. Andrei also brought up that one of the goals is to get feedback. Getting feedback is very different than getting clients, and that's different than getting traction. So deciding which of those do you really need. Most of the time when we're an MVP, it's really, I want clients that will give me feedback, they might actually be your clients that are that are the long term, they might not even be your long term customers, they just might be people who are willing to give you the feedback that you need to make sure that the thing basically works the way you expect it to, even if they're not there. But that's a very different thing. Then I had a conversation recently with someone, and they were trying to figure out their exact pricing before they had figured out whether anybody was willing to pay anything for it, and my feedback was it doesn't matter. Just get them to agree to pay something. Forget whether it could be $100 a month or $30 a month or $1 a month, did they want to trade money for whatever it is you have, if that's your expectation of a model. So it's important to be super clear with what it is that you're defining because otherwise you'll end up in the wrong place. And that's the tragedy of it. Because now you work really hard on something and you find yourself a month or three months or something later. Lisa,I don't know if you have an example of being sent down the wrong path?
Lisa Shufro 28:08
Oh, yeah, yeah, we have one who actually adhered to their OKRs. I can't reveal the company's name. But they were a service that was beloved by their customers. And they were religious about executing their OKRs incredibly well, but they went out of business because they bet on the wrong business model. So you have to be sensitive to the environment on the outside. So they were missing a very serious metric in other words.
Lisa Shufro 28:37
But I guess I want to bounce off what you were saying, Scott, about that precision. And I think what happens a lot of the times with companies is that they set these gigantic O's, so I'll take example Upsolve, which is a tech not for profit that helps people file for bankruptcy online, because they can't afford a bankruptcy lawyer. I mean, the cruelty is you're bankrupt, and you have to hire a lawyer, right? So what they've done is create a service where you can file most of the paperwork for yourself. There's a small number of people whose cases can't be resolved in a standard way, and they get referred to to others. So their audacious goal is to rid the US of all bankruptcy debt, which is a billion dollars a year. And their internal goal in their mind is they want to be an agency that resolves enough debt to be the same size and same size influence as a small government agency. So how do you get to a billion dollars in debt when you've got 12 engineers, that sounds impossible, but when they were looking at their conversion rates, when they were looking at their traffic rates, there's a great story about this, they realized, they broke it down using measurable goals and saying, what would tell us that we were on track? And it turned out there were two really important metrics. One was, what's the amount of review time it takes a lawyer to look at an application? Can we get it down from 10 minutes to five minutes, because then we can process a whole lot more. Versus doubling the traffic, right, they were really doubling the conversion, but then the other one that they really said was, wow when you look at how this adds up, that means four times the traffic that we do today, and suddenly, this hairy goal of a billion dollars in bankruptcy data year becomes, as Rohan puts it, not just doable, it becomes inevitable. So setting that metric and saying how would we make this possible going from a future state backwards, instead of from, well, how could we incrementally improve on what we're doing today? Sometimes it makes you look for a different metric. That metric on lawyer review time wasn't an obvious one.
Scott Case 31:02
Finding the metric that matters is important. And it's not always the case that it's obvious.
Scott Case 31:10
I want to pick up a few questions that have come in. So one – can OKRs be used to kind of help organize the team better, so that people aren't just sort of jumping after the hot potato of the day? Is there a way to kind of use that common set? And a lot of it has to do with resource alignment. But can you talk a little bit about with small teams how to use OKRs as a way of kind of helping everybody keep, you talked about focus, and bringing people back to what matters?
Lisa Shufro 31:44
Focus is the first superpower. So we think there are two things to help teams adopting OKRs. Keep in mind. The first is that OKRs are not supposed to track everything you're doing, that's project management, that's work plans, that's your everyday routine stuff. OKRs are supposed to represent the three things that for the next 90 days matter the most. And so we recommend that not only when you adopt OKRs and set them for the next 90 days that you automatically schedule at least one review in that 90 days for each team that sets its own OKRs. But ideally, every conversation that you have will be framed by those OKRs because it's so easy, particularly in a startup where everyone's wearing 100 different hats and maybe there's a lot of uncertainty either in the market around you or you're not even sure what your product market is or who your clients are, it's so easy to go by your gut on what is important. And those OKRs are your North Star that tell you not this star, this star, right. And it's so easy to from week to week decide that the meeting that came in or the email opportunity or the market shift should cause you to do this on top of everything else. And if you're like me, you can fill up your day with just the routine operations, the business as usual, and not make the long term progress that will really highly leveraged. So we start every meeting and we encourage every team that we work with and coach to start every meeting with your OKRs. It's a five minute check in, you go down and we say, are we on track? Are we off track?
Lisa Shufro 33:30
In fact, one organization new bank, we have a story coming out about them. They're a FinTech in Brazil growing huge and fast. They actually schedule meetings that are entirely Are we on track or not? You are not allowed to talk strategy, you are not allowed to do feedback, you're not allowed to do sidebars, it's just Are we on track or not? And they don't go through every team, you know that on, you know, March 15, you're up for your Are you on track or not meeting, and then it's in out, nobody gets hurt. So five minutes upfront, and that you'll find that the fact that you got sucked into 100 things this week that we're all important and you show up to the meeting and you're like, Oh god, I made no progress on OKR number three, right, it resets how you prioritize what happens in that meeting, and how you prioritize the rest of your day and the rest of your week, and then adds up it's going on a per base, you hit singles instead of a home run.
Scott Case 34:39
I think that there's a couple of things that frame into that. You talked about having each team or each individual have OKRs. And it can be just as effective to have the whole company focus on just a few objectives and key results, maybe three or four objectives and a handful of key results that you review as an entire company on a regular basis. And we instituted, somewhere along the pandemic, every week we have the entire company spend, it usually takes us about 10 minutes, and we literally go through, it's probably like 18 KRs total across all the different objectives, but it gives everybody a touch point to your point of the oh shit moment, there's often times where it's like, right now we're halfway through the quarter, if we haven't made progress on something, and sometimes these things are step function, so you may be building building building, and it doesn't kick in until the last couple of weeks, because you're maybe at the beginning of a project, but it's those touch points and the frequency is really important.
Scott Case 35:48
I want to touch on, we have about two or three minutes left, from an external view is there an advantage to using OKRs In your experience with communicating to investors or board members or external stakeholders in your business? And maybe you could give an example of that?
Lisa Shufro 36:15
Sure. And I think for the most part OKRs are considered an internal tool, right? It's really meant to help your team work together, instead of together apart. And so they really are meant to combat the I worked alone for the team to quote something Jon Ellenthal used to say, it is meant to combat that.
Lisa Shufro 36:39
So they are primarily a tool for internal use. That said, many organizations from possible health, which has teams in both Nepal and the United States, to nubank, to actually an investor named George Baboo, who started sweat equity. George Baboo, we have a story about each of them on the site. He writes OKRs for each investment company, because the discussion of how are we going to produce value is squishy. So some organizations use their OKRs to decide what they're going to update their board on, and it sort of simplifies that, because you can very clearly tell them where you're experiencing progress and where you're not. And others use them as a way of solidifying the relationship between the investor and the portfolio company, in the case of sweat equity, they agree to take an operating position within the organization in exchange for equity, and they decide how will you know, so the founder can actually fire the investor, and the investor can actually say, You're not delivering on on the commitment that we made together, so it solidifies it clarifies what success looks like. And these companies will often point to it as an example of knowing when we need to rally the forces differently. Avoiding the Oh, shit, moment.
Scott Case 38:17
Yeah, well, an look, it's also a way of, we find it helpful if everybody's aligned on what the objectives and key results are, then you also can use the same reporting mechanisms if you're reporting on a week to week basis, it becomes a very natural thing to drop into your investor update and everybody knows what's going on, even if they're not necessarily a part of the development of those OKRs. They give everybody a sense of progress being made and sort of where we are in this.
Scott Case 38:44
I'm going to take one last question. And then I'll let Lisa wrap things up. I'll take this one on your behalf because it's really about traction and less about OKRs. But any suggestions on getting through to those that want analytics and if you say you have 30 customers, that ought to give you a look. I'm going to just take that through an investor lens. Different investors are looking at companies at different stages. And so if you're talking to an investor who's expecting you to have 1000s of customers and growing 20% month over month, and you're not there yet, they're not the right investor for you. What you need to do is to find the investors that are at a stage where they're looking at what would typically be pre seed or seed stage investors who are looking for companies that are at that stage where you've only got a handful of customers, and you're still in a learning mode. And probably the most important thing and this is where OKRs can come into play is being clear about what you're learning and what you're going to prove with those 30 customers. It goes back to something Lisa said about the other example, which is who are the customers, what are you trying to achieve with them, and how will you know that that's working or not? Now you have some proof points, so you could say now we're ready for that level of investment.
Scott Case 39:34
And as always, you can always reach out to me and get one on one time. But I want to let Lisa have the last word here. What is your What Matters pro tip? What's the thing you want everyone here to think about or remember when it comes to measuring what matters?
Lisa Shufro 40:17
We were originally looking at the domain name, measure what matters, and it was John who said, no it’s what matters. So, OKRs are about impact, and yes, revenue is a very important metric, but it’s a metric for what it is that you want to do, so put it in context and try to make your OKRs about what impact it is that you want to have.
Scott Case 40:45
Excellent. Well, thank you, thank you, thank you. It’s always a pleasure to get to hang out with you, and someday we’ll be able to do that in person again.
Scott Case 40:51
Thanks for tuning in to this episode of Founders Focus. What did you think? You got any feedback for us? Got a topic that you'd like us to discuss or maybe a future co host? We'd love to hear from you. Just hit me up on LinkedIn at T Scott Case. And join us at foundersfocus.com to stay up to date with the latest episodes. And join us live every week at our Founders Focus sessions. Hope to see you there.