How to decide what to prioritize — a simple rule for startup CEOs

Edited excerpt from From 0 to $1.2M RunRate (and profitability!) in just 5 quarters. 9 lessons learned in creating an impossible company by Armando Biondi:

The problem with “what matters” is that it changes all the time, every day, often several times per day. So how do you decide what matters most? We use two fairly simple algorithms:

Does this contribute to hitting our month-over-month growth goal?

If/when the answer is “yes” to several things, the following question is:

Which one requires the lowest effort and the shortest time to generate the biggest impact with the highest chance of success?

(1) These rules help you prioritize projects and can also be used for resource allocation. Are these resources helping me hit my month-over-month growth targets? If I reduced resources here, would it impact my growth rate over the next x months?
(2) The follow up question actually contains 4 criteria (lowest effort, shortest time, biggest impact, highest chance of success). Which do you prioritize? You could weight the factors, and chose the project with the highest weighted outcome, or rank the factors and use lower priority factors only in the event of a tie.
(3) In Seeking Alpha, we prioritize the project with the highest chance of success, not the project with the highest probability-weighted outcome. This is because we want to optimize for speed of learning, and you learn only from successes, not failures.
(4) Re. “Does this contribute to our month-over-month growth goal?” — see Growth rate in revenue or active users is the paramount startup metric and The three steps to building a great company, and why most startups fail on the first step.

4 thoughts on “How to decide what to prioritize — a simple rule for startup CEOs

  1. Doesn’t this limit one’s ability to plan more than a month out? To me the CEO has to often prioritize things that are non-obvious priorities to the rest of the team in order to set the stage for the future.

    • That’s a good question. My gut feeling is that as CEO you know you need to generate growth for, say, the next 6 months, so there are some things you’ll do because without them you won’t be able to generate that future growth. The question then is: how do you prioritize those projects versus more immediate projects? And there the rule says: prioritize whatever generates the most immediate growth.

  2. Someone emailed me the following question:
    Re this quote: “you learn only from successes, not failures.” Do you truly believe that? Big fan of Edison’s quote: “I have not failed. I’ve just found 10,000 ways that don’t work.” 🙂

    My answer:
    This might surprise you — but yes, in my experience you only learn from what works, not what doesn’t work. There are a limitless number of reasons something might fails, so ruling things out still doesn’t help you figure out how to make something successful. See: (I’ve added the link to the notes on the post).

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