Traction

I’ll admit that this post is going to be a bit more tactical than usual. But if you’re a founder, or run any sort of business — I guarantee you this will be the most impactful thing you read all week. I’m going to share exactly how we operate beehiiv today, and the step-by-step process we took to get here.

After launching beehiiv in November 2021, we grew revenue 20%+ month-over-month for the first 16 months or so.

On the surface that sounds pretty damn good. But should we have been growing faster? It’s hard to tell because we were flying completely blind — we had no goals, no KPIs, no anything. It’s totally possible that we were underperforming and should have been achieving much more.

At the time, we were all just so heads down shipping new features, putting out fires, and attempting to onboard any new user we possibly could. At the end of the month we’d assess our revenue, acknowledge that we grew a good bit, and then do it all over again.

Then about a year ago, I decided to take a page from the playbook we used at Morning Brew.

Back when I was running product and engineering at Morning Brew, I was fortunate enough to sit on the leadership team as an unproven 24 year old. One day Austin Rief, one of the co-founders, came in and gave the leadership team what I now consider to be the modern day bible for business — Traction.

We followed that book to a T, and Austin ran those meetings like a drill sergeant. It gave us a framework to operate with, real goals to strive towards, and passed accountability down to everyone in the organization.

I’d go as far to say that it was entirely transformational for the business. Fast forward a few years and Morning Brew was acquired by Business Insider for $75M in 2020.

So back to beehiiv.

Despite our early success, I realized I had absolutely no idea what we were building towards. Our goals were randomly assigned and totally arbitrary, we weren’t tracking the right metrics, and there was no framework in place to hold ourselves accountable. So I sent a copy of Traction to my leadership team and kicked off the process.

What exactly is Traction?

It’s a book. But it’s also a framework known as EOS, or Entrepreneurial Operating System.

There’s a whole industry of firms and experts that will sell you on software and consulting gigs to “implement” this framework for your business. Honestly I think most of that is total bullshit — you can just read the book and implement it yourself. And if you can’t manage to do that, you probably shouldn’t be running a business in the first place.

But despite the Entrepreneurial Operating System being the lamest name imaginable, the framework itself is actually a masterclass. If I had to explain it in a single, over-simplified sentence, it’d be this:

It sounds so remarkably simple and obvious, yet I know so few startups that actually do it. So as succinctly as I possibly can within a single newsletter, I’m going to try and give a crash course on how to get started.

First, you need to do 3 simple things:

1. Read the book (obviously)

2. Establish your leadership team (if you haven’t already)

3. Setup a weekly 90-minute meeting

At beehiiv we call that meeting “The Weekly” and it’s recurring at the same time and day each week. I can’t express how important it is to prioritize this meeting over everything else on your calendar.

We very rarely move this meeting for anyone or anything, even if someone can’t make it. Rescheduling leads to delays, which leads to things slipping through the cracks… which is the antithesis of the entire framework.

Before fully launching the Traction process, your leadership team will need to do a good bit of preparation first. This took us about a quarter of weekly meetings to nail down and finalize.

I’ll quickly run through the list of things we internally discussed, debated, and aligned on during this process (this is all outlined in much more detail in the book).

Core Values

These are three to seven vital and timeless guiding principles for your company. These help you attract like-minded people to join your company, and weed out those who don’t fit. It’s for sure a little meta and feels like fluff, but it’s important to understand who you are as a company to set the foundation for everything to follow.

Core Focus

A lot of startups suffer from shiny object syndrome. The purpose of the core focus is to align entirely on what’s important and what you are trying to achieve as a company. It’s made up of two parts:

1. Why does your organization exist — what is its purpose, cause, or passion?

2. What is your organization’s niche?

For beehiiv specifically we landed on the following:

Purpose: Empowering users to grow, monetize, and connect with their audience.
Niche: Email newsletters.

Marketing Strategy

You cannot be everything to everyone. A clear marketing strategy communicates to your team who your target audience is, what problem you are solving for them, and how you differentiate from competitors.

The four elements of the marketing strategy is the following:

1. Your Target Market. Your ideal customers — who are they, where are they, what are they? 


2. Your Three Uniques. This is what differentiates you. No competitor should share the same three uniques as you.


3. Your Proven Process. The repeatable way you provide your service or product to customers. 


4. Your Guarantee. What your customers can count on from you. If you can guarantee it, it’ll put their minds at ease.

To put this into practice — for us at beehiiv it’s easy to fall into the trap of trying to serve any company that sends emails. But admittedly we aren’t a perfect fit (yet) for DTC brands looking to send ecommerce-based emails. It’s important that our sales and marketing team knows that so we don’t waste time, money, and resources trying to onboard the wrong customers.

Quick recap on the above…

• Core Values helps you attract the right people to join your team.

• Core Focus helps you identify exactly what you are building.

• The Marketing Strategy aligns on who you are building for (and why you can serve them better than competitors).

I’d consider that the foundation. Next you’ll transition to the vision component…

5 Year Target

The book recommends a 10 year target, but I truly don’t see the value in trying to build realistic goals a full decade into the future… so we settled on 5 years. This is truly the north star of the business — where do you want to be 5 years from now?

For beehiiv, our target was $250M in revenue in 2028 💰️.

3 Year Picture

If the 5 year target is the north star, the 3 year picture should put you on pace to achieve that, but is easier to envision given the shorter time frame. It’s also easier to identify and extrapolate the core KPIs that you would need to attain to achieve this result.

For example, if the goal is $100M in revenue…

• How many paying users will you need to achieve that?

• How many employees will you need to support that?

• What type of marketing budget will you need?

1 Year Plan

Similar to the 3 Year Picture, but brings it even closer to home. Where do you want to be just 12 months from today? And what are the KPIs to achieve this? You should be able to very clearly envision this reality.

Quarterly Rocks

Rocks are synonymous with “goals.”

Now you need to narrow your vision all the way down to what really matters: the next 90 days. In a growing organization, it’s normal to battle for resources, time, and attention… but Rocks should be what aligns the entire organization and takes precedence over all else for the upcoming quarter. Every single employee should be fully aware of the company’s Quarterly Rocks.

You should limit your rocks to 3 to 7 per quarter. When everything is important, nothing is important.

When we first rolled out Traction in Q4 of last year, we had both Company Rocks (for the entire team to strive towards), and Leadership Rocks (owned by each member of the leadership team). Today, each team lead also has Rocks, along with several employees.

Admittedly, those rocks weren’t the best. There’s a bit of a learning curve in the process and we’ve since gotten a lot better at making these more concrete and measurable.

Scorecard

The scorecard is used to closely track the absolute most important metrics for the business. Each metric should have a weekly goal so you can easily tell (on a weekly basis) if you are on-pace or off-track.

The book recommends between 5 and 15... but given we are a digital business and can mostly automate this, we chose not to limit the number of scorecard metrics. This ensures we have full coverage of the business.

We recently upgraded from a Google Sheet to a custom dashboard that is fully automated and shows clear trends over time.

Issues

Your ability to succeed is in direct proportion to your ability to solve your problems. It’s vital to create a workplace where people feel comfortable calling out the issues that stand in the way of your vision.

This part of Traction is literally just creating a running list of any issue or challenge that the business is facing.

We initially came up with over 50 issues that were getting in the way of the company’s long-term success. That’s a tremendous starting point, and gave us plenty to do.

Quick exhale 😮‍💨.

So far, I have only discussed the “preparation” stage of Traction. As a recap…

• You are aligned on Core Values, Core Focus, and Marketing Strategy.

• You have a 5 Year Target which is your north star of where you want the business to be.


• You have a 3 Year Picture that gives you a more comprehensive overview of your future business. This should include KPIs that you can begin tracking today to ensure you’re on pace to achieve these milestones. 


• You have a 1 Year Plan that brings your goals even closer to home. You should be able to perfectly envision how you are going to achieve this, with very specific KPIs. This is all set to happen over the next 12 months!


• You have Quarterly Rocks which aligns everyone on the company’s priorities and initiatives for the next 90 days. These Rocks should advance your KPIs to realize your 1 Year Plan. 


• You have a Scorecard that measures the company’s most important metrics and signals on a weekly basis. By monitoring the Scorecard closely, you should never go more than a week without addressing metrics that are alarming and putting your KPIs at risk.

• You have a running list of Issues that your leadership team is aware of and ready to prioritize and address on a weekly cadence.

Now it’s finally time to execute.

During the 90-minute weekly’s you’ll follow a strict agenda. This ensures that your metrics are on pace and that your leadership team is able to address all of the company’s top issues.

• Misc. Items. Literally just a few minutes of small talk.

• Scorecard. Quickly run through the scorecard. We have it programmed so anything that is 25% above or below the weekly goal is shown in red (depending on what is considered bad).

  • Red means that we are off-track for that specific metric. Congrats, we have a new issue — and add that item to the running list of issues to address.

• Rock Review. Each member of the leadership team runs through their personal rocks and flags anything that is currently not on pace to be completed this quarter.

  • If anything is off-track — congrats, we have another new issue.

• To Do List. Close the loop on the previous week’s action items. It’s a very quick and binary — “yes this got completed” or “no it did not get completed yet.”

• IDS. This is the bulk of the meeting and is where the magic happens. One by one you tackle the most pressing issues in three steps:

  • Identify the real underlying issue.

  • Discuss the options, share data, and suggest solutions.

  • Solve what needs to be done to make the issue go away forever.

Items enter the IDS as issues, and exit as action items on the To Do List for someone to address prior to the next week’s meeting.

In summary, during each weekly meeting you are assessing the performance of the business via:

• The metrics in the Scorecard.

• The progress of your Quarterly Rocks.

Anything that is flagged to be off-track is then added to your list of issues to be discussed during IDS.

To really drill this home…

• If your 5 year target is $250M in revenue, that might equate to 50,000 paying users (the KPI).

• That means in 3 years, you might need 30,000 paying users.

• Which means by the end of this year you’ll need 8,500 paying users.

• But if your Scorecard reveals you only added 11 paying users this week… well that’s a big fucking problem.

See how it all fits together?

Most companies would wait until the end of the quarter or year to realize that they missed their goals, and then try to work backwards to understand why. But by that point, it’s way too late to take action.

That is the entire purpose of Traction — to prevent that from ever happening.

If you know where you’re going, and how you’re supposed to be pacing… then you should be able to flag anomalies in any given week, address it as an issue, determine the solution, and take action before next week’s meeting.

It’s impossible to summarize a 200 page book and share the best practices I’ve learned from my experiences at Morning Brew and beehiiv, all within a single email. But I’m in the process of creating a much more in-depth overview, full of real data and additional examples from beehiiv.

If you’re interested in receiving the final deck, click the button below and I’ll send you a note once it’s done.

Godspeed 🫡.

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Shoutout Mark for the reader submission.

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