Good morning, fellow founder! 👋

Welcome to another edition of FounderForge. Your Europe-focused startup digest - just because we do things a little differently here! 🇺🇸 👀

If you missed our last issue, you can still read it at the link below! 👇

Today's topics are about magical creatures and numbers:

• The Magic of Unicorn Founders 🦄

• Measure What Matters with NSM & OMTM 🎯 

📊 Data Dive: Where Do Unicorn Founders Come From?

ONE BILLION EURO. 💰️ 

The magic valuation mark we all strive for, but very, very, very few will ever reach.

But who are the people who build such valuable businesses?

Are they like us mortals, or do they come from some secret magical place? 🦸 

Let's find out by asking the most important question first:

Do you need to be a college dropout to be a unicorn founder?

A common myth is that most unicorn founders are college dropouts.

The reality is that very few are (surprise, surprise).

Unicorn founders tend to take very different, unique paths. 👇

Nevertheless, there are some common patterns we can find here and there:

• Unicorn founders tend to be international citizens. They often moved to the place where they started their business or studied abroad.

• Most have a university degree, but only a third of them from an elite university.

• About half of them had previously worked in a startup / scaleup. But only 10% worked at big tech / elite companies.

• Perhaps most surprisingly, the average unicorn founder has 10 years of work experience before starting a company.

To learn more about unicorn founders (and see if you fit the profile), check out the link below. 👇

Deepdive from the book “Super Founders”

We already teased you in our last newsletter that we started reading "Super Founders" by Ali Tamaseb.

It's a really cool book if you want to dig deeper into the DNA of unicorn founders.

Below are some fascinating and freely available charts from the book. 📚️ 

Nearly 60% had founded a startup before - making them #serialentrepreneurs.

Again…

Over 50% of unicorn founders have more than 10 years of work experience.

So please don't get crazy if you don't have a unicorn (yet) when you're in your 20s.

90% did not go through an accelerator (duh - most are a scam).

But the ones that did went mostly through YC.

Who would have thought? 🤔 

There is much more. Check out the link below! 👇

🛠 Founder's Toolkit: Measure What Matters

How do we know we are doing the right things?

Is it more revenue? more users? more transactions? more...?

The number of different KPIs can be overwhelming.

Which leads to the exact opposite of what we need: distraction.

Legend has it that the startup gods came together to give founders the one sacred number that matters. 🔱

One number to rule them all.

One number that would give us a critical and clear focus.

The North Star Metric. 🌟 

How It Works

The North Star Metric (NSM) is a central, guiding metric that reflects the company's progress toward success.

To reframe it as a question: Which metric, if it increased today, would best signal that we are doing the right things?

Ideally, the answer to this question incorporates three key principles:

• Leads to revenue

• Reflects customer value

• Measures progress

At Coinpanion (a B2C investment platform for ETF-like crypto portfolios), our NSM is "Net-Deposits" (deposits-withdrawals).

Why?

• More money on the platform means we can generate more revenue.

• More money coming in than going out means customers are getting value from our solution.

• More and more Net-Deposits means we are growing and progressing.

Below are some other examples of NSMs. 👇

And before you even think about it: NO, REVENUE IS NOT A NSM! 😑

If revenue was Coinpanion's NSM, we would simply raise our fees by 100x and call it a day*!

*Literally call it a day because no chance customers would stick with us.

So repeat after me: a North Star metric reflects revenue AND customer value AND progress.

If you want to dig deeper into your NSM, the one and only Lenny Rachitsky has provided us with another masterpiece. 👇

Long-term vs. Short-term

While the NSM is great and should always be your guiding light, it often feels too “high-level".

To counteract this, the startup gods came up with another similar concept: The One Metric That Matters (OMTM).

🥜 In a nutshell:

• The North Star Metric is a company-wide metric for long-term growth.

• The One Metric That Matters is a team metric for short-term growth that changes every few months.

OMTM is the one metric that has the most impact on your company's growth in the next 2-6 months (short-term).

However, OMTM must ultimately contribute to your long-term NSM.

Some examples below. 👇

While the OMTM comes from growth hacking, it is a useful concept throughout the organization to create focus.

Now back to building and FOCUS, FOCUS, FOCUS. 💫

🔗 Founder's Library: Curated Resources

A collection of random reads that the FounderForge team enjoyed.

• How Did Loom Get Acquired? by Dave Schools

• How to Prepare for an Upturn by James Currier

• Lessons Learned from a Startup That Didn’t Make It by Jake Fuentes (Lenny’s Newsletter)

• How to Raise Your First Round? by Abishek Maran

😂 Meme of the Fortnight

But if you are pre-revenue, you are a potential pure play! 🤑

🤔 Your Thoughts on Today's Edition

• 🔥 It was great!

• 😒 Meh - it was okay.

• 👎 Not interesting to me.

That's all for now!

If you find this newsletter valuable, share it with a friend!

Cheers,
The Founders Blacksmith 👋

Issue #6 | 16. November 2023