The 40/40 Startup

  1. Easy to remember
  2. Entirely data- and metrics-driven
  3. Based on best practices I’ve learned straight from startup leaders in SF

A 3 Step Method

The method is insanely simple, but it brings more clarity, I believe to how to be a Y-Combinator-level successful startup. Here are the steps:

  1. Interview 40 people
  2. Meet the Rule of 40
  3. Get your NPS above 40

Interview 40 People

User interviewing is extremely important and until you’ve interviewed about 3 dozen people you still won’t have clear enough empathy for your users’ challenges and problems to create (and communicate!) a solution for them. These interviews must be conducted as classical user interviews beginning with warm up questions, open ended questions, and only pointed questions at the end once you’ve understood a person’s perspective and situation.

Meet the Rule of 40

The Rule of 40 has two meanings. One is a financial term, the other is a measurement of product market fit. For now we’ll just need the product market fit measurement.

Get Your NPS Above 40

Now that you have product market fit because a hard core of your users don’t want it to go away, its time to focus on growth. To measure your potential for your product to grow, use the handy-dandy NPS metric — Net Promoter Score. You’re looking for, you guessed it, a score of 40 or above.

BONUS: Rule of 40 (Financial Version)

Bonus! After you have an NPS of 40, you could try to meet another Rule of 40 — a measurement of the health of a Saas business. This Rule of 40 says that a business is healthy if your growth rate plus profit is ≥ 40%.

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Braus

Braus

Educator, Founder, Engineer. Interested in Evidence Based Education and Solving BIG Problems.