A start-up entrepreneur who is hunting for followers, likes, and popularity, but can’t achieve profitability, is falling victim to his or her own ego. In this Tough Things First podcast, Ray Zinn offers a realistic view of this pre-profit folly.
Rob Artigo: Well, we have another great question from a San Jose State University student, part of the ZinnStarter program. This student asks, “What early metrics matter most before revenue starts?”
Ray Zinn: Well, having a good team is a metric. Having a good culture, meaning that you have the how do you want your company to look and be perceived by not only your customers, but by your suppliers, by your employees. So having that is a good metric. And then if you’re a people person. Are you a good leader? Are people willing to follow you or do you have to drive them? Are you going to be a hard-nosed boss, or are you going to be one that’s a loving, kind and persuasive boss? Lastly, make sure you have the resources to actually bring your idea, your concept to reality.
Rob Artigo: Do you think people get bogged down and really obsessed with vanity metrics like website traffic or social media followers before they even have a single paying customer?
Ray Zinn: Yeah, I think they do. They think that’s a good measure. That wasn’t available when I started Micrel back in 1978 because we didn’t have that capability. But I think now that determines whether or not we think we’re successful is by our followers. And of course, a good leader has lots of good followers, but why are they following you? You should understand that. Looking at the reason why they follow you and make sure it’s for a positive reason, not just negative.
Rob Artigo: You bring up a really good point is that back in the day when you started Micrel, it didn’t exist. I mean, the likes you got were the people who called you on the phone. That was the feedback you got was, did somebody shake your hand? Did somebody say hi? Did they walk up to you when you were in public somewhere and introduce themselves and be like, okay, so that’s the recognition you get. Now it’s people really do focus on that even in their personal lives so much to the point of it being a fault and not a good metric in terms of being determining whether or not you should keep on doing whatever it is you’re doing in your startup.
Ray Zinn: Well, and if they’re follow on orders. In other words, are your customers continually coming back? That’s another way you can measure your success as a company.
Rob Artigo: And we’re talking obviously here about pre-profitability, pre-income. Some people not even having a single dollar coming in the door yet from a customer, and we’re talking about how many likes you get on social media or who’s following your videos that you’re posting on whatever platform is out there. And it seems like there are metrics that people deliberately ignore, and they focus on that kind of stuff and they deliberately ignore some things. What do you think? Are they metrics that people sometimes go out of their way not to address pre-profitability?
Ray Zinn: Well, not they got a big head. I mean, if you think your idea is the greatest since Swiss cheese, it probably isn’t. And so you got to be humble. Humble means you’re teachable and you’re caring and you’re kind and you can tell that just by how people respond to you. So the most important thing is have a good following of people who really love and respect you.
Rob Artigo: If you’re trying to get your program on track and you’re a pre-revenue founder of a company, is there anything that you can start doing right now that might make a difference in that process of addressing the proper metrics?
Ray Zinn: Yeah. Talk to your friends. If you’re wanting some honest input, ask your friends about certain things. Ask them the questions that like we’re talking about today. Get their input. See what they think about you as a leader and whether or not they think you have the drive and initiative to see the company to fruition.
Rob Artigo: We’ve done a whole series of podcasts here with questions from San Jose State students who are part of the ZinnStarter Program. And obviously those questions have really played well in this series of podcasts. So we are going to hopefully get more of those, but we’re also inviting our other listeners to chime in, give us their questions as well. We can make a whole podcast around a question. We’ll even drop you a thanks here on the podcast. So please do that, right, Ray?
Ray Zinn: Exactly, please. If you have questions like these students have, feel free to drop them into the comments.
Rob Artigo: We’ve heard some incredibly practical advice here on The Tough Things First Podcast today. The early days are the hardest days, and getting these metrics right dramatically increases your odds of success. Thanks for listening to The Tough Things First Podcast. If you are in the pre-revenue stage, start tracking the right metrics this week. Drop your biggest early stage challenges in the comments, subscribe. Share this episode, and we’ll see you next time where we always do the tough things first here on The Tough Things First Podcast. Right, Ray?
Ray Zinn: Exactly. Thanks for sharing.
