OKRs and KPIs for Early Stage Companies
What OKRs/KPIs are and Why They Matter
Most early-stage startups fail not because of lack of effort, but because they focus on the wrong things. OKRs are the simplest way I’ve seen to force focus. (Same goes with when I see teams begin to scale and hire for the first time – there’s no easier way to waste money than by onboarding employees who aren’t working on the right things for the company.)
One way to combat this that I’ve seen work many times is implementing a strong OKR framework. OKR stands for Objectives and Key Results. The first time I heard this acronym was when I worked at Google in 2012 – they used this system as a way to ensure all employees knew how their work was impacting the larger company goals, and also as a way to drive transparency and accountability when it came to knowing what your colleagues were working on. (“KPI”, or key performance indicator, is the metric you use to track the OKR. For example, “ARR” is a KPI.)
Together, these frameworks keep founders and their teams focused on what moves the business forward, rather than getting lost in tasks that don’t contribute to meaningful growth.
Important caveat: there is no one ‘correct’ way to drive an OKR / KPI framework within a company. The methods below are just what I’ve seen work well within companies I’ve worked in, as well as companies I’ve helped or in which I’m an investor.
How to write great OKRs
OKRs provide a structured way to set and track goals at the company, team, or individual level:
Objective: an ambitious goal that sets a clear direction. It should be challenging enough to push the team but not so unrealistic that it feels impossible.
Key Results: specific, measurable targets that indicate progress toward that goal. These should always be quantifiable, with clear metrics and timelines.
A well-structured OKR is clear, time-bound, and focused on outcomes rather than tasks. For example, a startup looking to improve user engagement might set the following OKR:
Objective: Improve user engagement on our product.
Key Result 1: Increase daily active users (DAU) from 1,000 to 2,000.
Key Result 2: Increase average session length by 25%.
Key Result 3: Reduce churn from 8% to 4%.
Avoid making key results a laundry list of tasks that your team needs to do. For example, avoid things like “add five new features” or more vague results like “improve UI design”. The examples above focus on usage and retention, which do a better job of making sure feature development and design improvements are tied to measurable outcomes.
TLDR on what to do:
✅ Objectives should be bold but realistic—they should inspire action while being achievable.
✅ Key Results should be quantifiable—use numbers. For example, instead of “Increase brand awareness”, say “grow % of new users from organic channels from 20% to 35%”
✅ OKRs should be revisited frequently—don’t set them and forget them.
TLDR on what to avoid:
❌ Too Many Goals: Most companies aim for ~3 objectives (with a corresponding 1-3 key results under each) per company, team or individual per cycle.
❌ Vague Objectives: Avoid “Be the best AI company”—make it specific.
❌ Task-Based Key Results: “Launch product” is not a good key result. It’s a fine objective, but there should be business-moving key results associated with that.
Implementing OKRs
The right OKR cadence depends on the stage and pace of the company.
Most large companies that implement OKRs will set them either on a quarterly basis, semi-annual (2x/year) basis, or annual basis. Early-stage startups, where priorities are constantly shifting and where growth is faster, often benefit from monthly or quarterly OKR cycles. Regular check-ins—whether weekly or bi-weekly—help keep goals top of mind and prevent teams from going off-course.
And when employees or founders are making a tough decision – it’s always good to look at the OKRs and think: will this meaningfully impact one of those?
There’s no need to overthink it or do anything fancy to set your OKRs – just a google doc/sheet is good enough in the early days (here’s an example template you can use). This is also a good place to assign each employee to show ownership, as well as to ensure everyone is working toward what matters most.
Avoiding vanity metrics
Not all metrics are meaningful. Many startups fall into the trap of tracking vanity metrics—numbers that look impressive on the surface but don’t actually indicate business progress. Common vanity metrics:
Number of leads generated without tracking lead quality or conversion to paying customers.
Pipeline size without considering sales velocity or deal win rate.
Website traffic without measuring conversion rates.
New users registered (instead of trial-to-paid conversion rate, or new users who onboard.)
Instead of measuring features shipped, track feature adoption rate or impact on user retention.
Aligning OKRs each quarter
If any KR is underperforming, the next OKR cycle should include objectives that address it. For example, if you notice churn is increasing (KPI: Monthly churn rate is 8%), set an OKR to address it:
Objective: Reduce churn by improving customer experience.
Key Result 1: Increase NPS from 30 to 50.
Key Result 2: Reduce churn from 8% to 4%.
Key Result 3: Increase retention rate from 40% to 60%.
Next Steps
Once you’ve identified your most important KPIs, write down where each of your important metrics is today. Then, chat with your investing partner (or even ask ChatGPT!) to get a sense of the "gold standard" for those metrics, keeping in mind things like your company’s size or customer profile. This will help you quickly spot where you're doing great and where you might need some work.
You don’t need perfect goals. You need aligned ones. The job of OKRs is to help you say ‘no’ to the wrong things, and ‘yes’ to the right ones.
