x.ai’s CEO on How to Run Your Startup on One KPI
x.ai is an artificial intelligence company that makes scheduling meetings easier. In fact, with x.ai, scheduling isn’t just easier, it’s completely painless. x.ai users simply copy their AI assistant (Amy or Andrew) on scheduling-related conversations, and the assistant takes on the job of finding and confirming a time and location with meeting participants and then sends out a calendar invitation.
x.ai aims to make a very complicated and painful process simple, so when it comes to measuring the company’s success, it makes sense that Dennis R. Mortensen, x.ai’s Founder and CEO, would put in place simple success metrics. In fact, x.ai has just one KPI — schedule more meetings.
“I am personally a huge fan of running any startup on one KPI,” says Mortensen. “I think that’s the difference between a startup and a business. The idea of a startup is just so fragile that the default outcome is almost always that you don’t make it. To ensure success, you need to make sure that everybody is running in the same direction. And the more aligned you are, the more likely it is that you will have a good outcome.”
But, just communicating that KPI to your team isn’t enough. You need to make sure that every single person on your team has real-time access to how you’re measuring against that metric.
“Put that one KPI on a big-ass plasma TV in the middle of every room.”
“Make sure to put that one KPI on a big-ass plasma TV in the middle of every room your team members operate in,” says Mortensen. “Our employees should know what we’re hunting, where we are today, where our next target is and should be able to assume where we’ll be tomorrow. Everyone at the company should be able to somewhat predict when we’ll hit that next target.”
If measuring your company’s success based on one KPI sounds simple, finding that one KPI can be extremely challenging.
“Finding some KPI that you can use to track success all the way from hiring new employees on up to presenting at your board meeting is the truly hard part,” says Mortensen. “The KPI has to be something that encompasses where we’re headed as a startup. We have to ask ourselves if this one metric is something we can raise capital on, if it’s something we can run the company on. For instance, is this one KPI going to enable us to make sure that our data science team is moving forward or that our engineering team is pushing what they’re supposed to to production?”
“Measuring your success on one KPI isn’t the hard part, it’s finding that one all-encompassing KPI, that’s the real challenge.”
“If you’re able to invest enough time and energy into finding that one perfect KPI, it really provides clarity and focus beyond anything else by which you can possibly be measuring your success. Once you find that KPI you can truly run on it for years,” says Mortensen.
So, what happens when the company grows from a startup into a full-fledged business? “There will come an inflection point where we need to introduce proper business-specific KPIs and unique reporting initiatives. But, for now, anybody you speak to around the company will have a relationship to our one KPI. Everyone at x.ai knows exactly what the next target number is and where we’re headed,” says Mortensen.
But, how do you come up with that one perfect KPI? Mortensen says to use a checklist to make sure you don’t just end up with yet another metric. It should truly be a key performance indicator. Here’s the list he goes uses:
- It should echo organizational goals
- It should provide context
- It should create meaning on all levels of the organization
- It should be based on legitimate highly measurable data
- It should be easy to understand
- It should lead to ACTION!
In order to really set up a KPI that will work for your company for the long-haul, you have to speak to those involved. “If that data scientist can’t see how his job matters in relation to this one KPI, and you can’t articulate why or how it’s related, then the KPI you chose isn’t a good one,” says Mortensen.
And getting to that one perfect KPI might take months, but Mortensen says it’s been well worth it. “There’s not a board meeting, an all-hands or a late night where I don’t see some message on Slack referencing our KPI. The team truly embodies this one success metrics, which has enabled us to run faster than we ever thought possible.”