Goals are effective because goals are for learning. Learning intensifies when there is a goal because goals make you focus on your efforts. Additionally, goals make it so that you can leverage the powerful psychological benefit of goal setting to hack your own brain.
A goal should not be thought of as make-or-break demand, but rather a hypothesis:
If [variable], then [result], because [rationale].
For example, if our goal were to “get 100 new free trial users per month,” the hypothesis would read something like this:
If we create 15 high quality blog posts each month, we will generate 100 new free trial users per month, because I think we can generate 2,000 new leads and maintain a 5% new lead to free trial conversion rate.
If this was a goal of ours at LeadBoxer, and we were to hit this example goal, that would be great. We would now know that we would need to make more blog posts because writing blog posts is a great use of our time. However, if we don’t hit the goal, we still have a brilliant starting place to learn and iterate on our strategy from. When things don’t work out, we should be asking questions like: Are blog posts the wrong format (variable)? Did we overestimate how many leads we would get (result)? Or was the problem with our ability to convert those leads into free trials (rationale)?
When your company is in the stage of trying to figure its business out, the information you learn from accomplishing and failing at goes is immensely valuable.
Why do goals often not succeed?
Goals typically go wrong when they aren’t clear enough. When a goal isn’t defined well (or is even too defined), it becomes impossible to succeed. Setting goals that are clearly impossible (or highly unlikely to succeed) are dangerous for a company because they set teams up for failure.
Setting too many goals.
Setting too many goals is also very dangerous for a company. Too many goals lead to what is referred to as “false hope syndrome.” This will mean goal after goal is missed, and this will destroy both motivation and focus of the team building a company.
Setting goals that are impossible.
Company leaders often set goals that are clearly impossible to reach. This is one of the most dangerous things that a company leader can do because it’s demoralizing. A great leader creates a team of high-achievers. If these team of high-achieves is forced to chase impossible goals, it can be devastating. Leaders need to be focused on building a culture of success; so creating smaller goals that are actually attainable is a key ingredient for building a business.
Steering clear of vanity metrics is incredibly important. Defining success and failure from metrics that don’t matter will lead to failure. Vanity metrics are metrics that don’t truly explain the health of a company. For example, the number of free trials doesn’t really matter for a company. Free trial numbers just say people are signing up, but don’t signify if real traction is being built.
Vanity metrics are things like free trials, registered users, downloads, and pageviews. These numbers don’t typically correlate to the metrics that really matter.
Metrics that actually matter include: active users, engagement, the cost of getting new customers, and ultimately revenue and profits. The real data that matters are the numbers that help you understand if there’s repeat usage of your product and if you’re able to retain users.
How to create and use goals like a growth hacker.
The best way to avoid common goal mistakes is to remember that goals are not definitive make-or-break numbers, but wonderful learning opportunities.
Here’s how goal setting should work:
- Form hypothesis
- Select KPI
- Set goal
- Track progress
- Talk about what happened and iterate
This structure helps guide a company away from “set-in-stone” goals. It helps make goals more enjoyable, realistic, and beneficial for a company. It’s how you set a company up for success.