Michael Seibel - How to set your KPI?

YC startups typically select one of four primary Key Performance Indicators (KPIs) to define business success:

• Revenue (monthly, recurring, or annual).
• Usage metrics (DAUs, WAUs, or MAUs) for advertising or social platforms.
• Enterprise engagement milestones (LOIs, free/paid pilots, or signed contracts).
• Technical milestones (positive experimental data or specific manufacturing accomplishments) for science or moonshot companies.

Founders should prioritize one of these standard top-level KPIs to ensure comparability with investors and similar companies, rather than creating unique or creative primary metrics.

While the top KPI must be standardized, secondary metrics should be customized to the specific business model:

• Successful companies structure metrics as a pyramid with one primary metric supported by three to four secondary metrics.
• Secondary metrics should directly influence the top KPI and serve as the weekly focus for feature brainstorming and optimization.

Airbnb serves as a specific case study where revenue was the primary KPI, supported by the following contributing secondary metrics:

• Total inventory volume (critical for scalability).
• Average inventory price (influences conversion willingness).
• Host responsiveness time (impacts booking completion).
• Search functionality speed and performance.

Founders are advised to avoid the difficulty of brainstorming how to move the primary KPI directly and instead focus operational efforts on optimizing the underlying secondary metrics that drive that top-line number.