Results vs. Activities

One of the problems I see in many startups is the confusion between activities and results. Entrepreneurs by their nature are high energy, enthusiastic, and action oriented. The problem is in distinguishing between results: which are measurable achievements that add value to the venture, from successfully beta testing a new feature and sending it out as an update, to an activity, which might be a business development exec having six phone discussions in a day with potential partners, but not getting any meetings.

The Social Innovation Forum does a great job of tackling this problem with their companies. The strongly emphasize  the distinction between outputs (which I would call activities) and outcomes (which I call results).

Output might be that an environmental education group served 3,000 students a year. An outcome would be that those kids went home and convinced their parents to conduct a total of 2,500 home energy audits that year.

SIF does a great job of helping entrepreneurs measure and monitor their activities (outputs) AND results (outcomes) and clearly understand the difference between the two.

When it comes to social benefit entrepreneurship or for profit entrepreneurship, investors invest in results, not activities.

Make sure your entire organization understands this. In Silicon Valley and elsewhere the KPI (Key Performance Indicator) is a tool used to keep startups focused on performance that moves the company forward and creates value. I believe this methodology was developed by Tom Perkins of the VC firm Kleiner Perkins. You can Google KPI to learn more about it. Wikipedia has a helpful introductory article that’a a good start.

Author: Mentorphile

Mentor, coach, and advisor to entrepreneurs, small businesses, and non-profit organizations. General manager with significant experience in both for-profit and non-profit organizations. Focus on media and information. On founding team of four venture-backed companies. Currently Chairman of Popsleuth, Inc., maker of the Endorfyn app for keeping fans updated on new stuff from their favorite artists.

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