This April, one of the greatest venture capitalists in history, John Doerr, released an autobiography (of sorts) entitled Measure What Matters, which reveals to the world many of his renowned venture capital secrets.
A partner at the legendary tech investment firm Kleiner Perkins Caufield & Byers, John Doerr is seen as a Svengali in the industry, having created an incredible trail of success throughout his career. Known for his Midas touch, he originally picked Google, Amazon and Symantec for early success.
A billionaire several times over, he has continued that run with his unique strategy. In fact, Doerr is so wealthy from this strategy that he is the 105th richest person in the United States and the 303rd richest person in the world.
So, what’s his secret?
Setting goals is key. It’s not brain science. It’s about creating clear benchmarks and using tracking tools to monitor their progress. They are called OKRs (Objectives and Key Results), and if they are good enough for the Bill & Melinda Gates Foundation, Bono’s ONE campaign and Google, then it’s surely good enough for you.
You can use OKRs to carve a path to success by collaboratively choosing goals to orientate your company. OKRs can create a pathway for measuring and verifying where the company is heading and its health.
In 1988, when John first sat down with the founders of Google, Sergey Brin and Larry Page, he knew that the pair lacked management experience; but to make up for that, he employed strategic goals from very early on, which included a 10x expansion plan. Having seen them employ this early on to good effect, Doerr made an investment of almost £12 million for a 12 percent stake in the company. And, as they say, the rest is history.
In the book, he recounts sitting around a ping-pong table in Susan Wojcicki’s (the CEO of YouTube) garage to explain what an OKR was.
This story has repeated itself throughout John Doerr’s career, which has seen many companies rise to the occasion with this winning strategy.
But when their customer base explodes, many companies do face major obstacles (like scaling their technical infrastructure, for example). Look at leading technology companies like Salesforce, who are dealing with 1.3 billion transactions per day, or the U.S.-based PokerStars, who are handling up to 20,000 hands at one time—that’s a lot of server power to deal with.
When it comes to issues like this, John has been actively trying to eradicate the “fuzzy thinking” approach. When a manager says, “It will take care of itself,” you should be worried. As John Doerr so succinctly puts it, OKRs are “a vaccine against fuzzy execution.”
Doerr goes on to explain that OKRs should be kept to a minimum, so as to avoid overloading the company’s trajectory. For most companies, there should be around 3-5 per quarter.
And the strategy of OKRs is scientifically verifiable. Studies show that when you set goals and send their progress to a friend, you are 43% more likely to achieve those goals.
What’s great about this book is that you can also use it for your own personal success. Setting goals in business is one thing, but setting OKRs for your own career path can also be remarkably valuable.
Featured Photo by Tech Crunch // CC by 2.0