Prioritization tells you how to spend time each day, how to organize your team, and what not to do.
Probably most of the tasks on your todo-list won't move your business.

You should choose the right Key Performance Indicator and then be honest with yourself to prioritize tasks helping you to reach your KPI.

Examples of bad tasks:

• Optimizing paperwork
• Unnecessary perfectionism
• Premature optimization
• Not building what your users want (choosing interesting problems instead of important)

  It's easy to run fast in the wrong direction. You must run fast AND in the right direction.

Ways of prioritization

Time on your project vs time on your personal life

1. Personal choice, hard to give advices
2. You should still be fast
3. Align with your co-founders and discuss how much time everyone is ready to invest

Setting KPIs

Step 1. Identify top KPIs

If you launched — it's Revenue. Non-Revenue KPI is probably the wrong one.
In the short term it can be weeks until launch / chats with the users, but then you must switch.

Decide what's your KPI for this week

If you have a goal for the week (like 10 more paying customers) it should align with your longer-term goal.
The reason setting the right KPI goals is critical is that it reminds you of urgency of growing fast. Tracking goals weekly reminds you of it.

Write your weekly goals on your mirror and face them multiple times a day.

Step 2. Identify the biggest bottleneck

There are probably tons of things to be optimized. But you must solve the problem stopping you from growing your main KPI.

Framework to aggressively prioritize your goals

1. Write down your ideas
   1. Rank them and choose a few
2. If your KPI is not moving — be honest about why it's not moving
3. Do honest retros; learn and adjust the course
   1. If it's not working — do something different
   2. If it's working — double it
4. Move fast

Things that should be on your todo-list

• Talking to users, responding to customer support messages
• Building features you know your customers will pay for
• Getting users to pay for what you've built

Things that should NOT be on your todo-list

• Investors coffee
• Conferences
• Arbitrary technical milestones

Common mental traps

• Checking things off a list makes you feel good — these tasks will make you feel good, they'll boost your ego, they'll let you avoid negative feelings, but it's fake progress.
• It's easy to convince yourself something is working when it is not.
• Perfectionism and indecision. Fast decisions are important. Most decisions don't matter and the ones that do are fine to be wrong at first.
• Mitigating downside (rather than chasing upside) can feel falsely urgent. It won't move you much. If you're working spreadsheets — do it, it doesn't matter.
• Working on secondary problem instead of the existential one. If users are asking for faster flow but you have 50 users — your problem is not the slow flow but the number of users.

Choosing the right KPI

Primary Metric

• The metric that unequivocally tells you if your business is working.
• It must be your growth and Revenue growth.

Secondary Metrics

• Things that need to be tracked to make sure your'e not cheating gaming about your primary metric
• Keep the list small. 3-5 metrics

Examples

• Retention / Churn
• Unit economics
• Customer Acquisition Cost and Payback period

Vanity Metrics

• Amount raised
• Team size
• Office space
• Press hits
• Celebrity endorsements
• Instagram likes

Setting Targets

From Paul Graham:

• 5-7% Week-over-week Growth = good
• 10% Week-over-week Growth = exceptional
  Early growth matters: growth rates compounds — start growing as early as possible

Factors to consider

• Latent demand may boost the early growth (but can be hard to sustain)
• Length of sales cycle
• Organic vs paid User acquisition, don't leak money too early
• Retention / Engagement — focus on bringing new users
  E.g. replace the number of sign-ups with number of orders (first is easy to boost with payments).

Approaches to set KPIs

Top-down

1. Pick a milestone/date in the future that you want/need to hit
2. Work backwards from this for bi-weekly goals

Bottom-up

1. Decide what is realistic to get done in the next week
2. Work from this to set a realistic milestone

Which one to choose?

Both are actually fine, trying both helps.

Non-Revenue KPIs

This might be tempting but usually not right.

• Customer Acquisition Cost/Lifetime Value of a Client — only worry about the Payback period, ideally it should be 0 (customers are paying from day-1).
• Free signups/Daily Active Users — don't rely on feedback from free users, don't count them towards your goals. The only exception if your product requires Network Effect.