Define the Critical Metric

By editor on January 28, 2018 — 1 min read

You have to be able to define the critical metric that defines the core product value of the business.

Revenue is a lagging indicator that reflects the magnitude of the product-market fit.

In our case, in our precision medicine company, this company called Syapse, we literally talk about lives saved. The reason is because we have this massive longitudinal trial at Intermountain. We found that if you used our platform at the point of care around cancer genomics, you had 75% of all patients at Intermountain — this is one of the best hospitals in the world — getting the wrong drug or dosage. You had a 10%-15% absolute right-off-the-bat reduction of cost. If you were a metastatic stage three cancer patient, you lived twice as long.

The minute I saw that, I said, “Great. That’s our metric from now on.”

Every board meeting starts with how many lives saved. That’s it. Fuck the revenue, that happens as a byproduct. (6:40)

Posted in: Entrepreneurship

Editor's Note

These are Chamath Palihapitiya's words. They are probably some of the best thoughts on VC, business, and life, but were scattered around the Internet. They live now in this archive.