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⚙️ How To Run Your Business With One Number

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How To Get Your Thoughts Out Of Your Head

Founder of Open AI, Sam Altman, journals every day.

He has said, “Writing is a tool for thinking”.

Meta-analyses show that brief journaling sessions reduce stress while expanding working-memory capacity.

Here’s a tool I’ve found to make this effortless.

It’s called Super Whisper - it captures your voice and turns it into written text (I’m not adding screenshots of the install because it’s the simplest UX I’ve seen to date).

Here’s my voice note this AM that I wrote for the newsletter.

Screenshot of what I said I would use Whisper for this AM

Seeing how often I use “so” in my speech has been humbling.

The upside though is it is capturing all the shitty & great thoughts I have when I’m too busy to write them all down.

Being a founder/ trying new shit is stressful; capturing your thoughts somewhere before they become too much is a way to gain more time and execute faster.

The Beach Test

Have you heard of the beach test?

It's a thought experiment to help you narrow your focus to the things that really matter in your business.

Say you're on holiday, lying on a deserted beach with no cell phone, no radio, no connection to the outside world except for a single lined memo that gets dropped off each morning. And you want to learn from that memo whether your business is okay, so you can stay another day on the beach.

What number do you need to see on that memo?

Most default to revenue, so let's rule that out too. Now what's your number?

Business owners waste too much time looking at all sorts of numbers. For the most part that is not necessary. Sure, if you're running a marketing experiment, or fixing onboarding, it makes sense. But only if you have a clear objective, like increasing conversion rates to x%. The rest of the time, those dashboards do more harm than good.

It reminds me of a Nassim Taleb quote - “The more frequently you look at data, the more noise you are disproportionately likely to get. It’s like reading the news: the more you read it, the less you know.”

Frequent exposure to short-term, noisy signals increases your likelihood of being misled by randomness.

It's like how the easiest way to lose weight is by keeping shit foods out of your cupboard. It's way harder to ignore chips in your cupboard than ones you'd have to drive 15 minutes to buy.

When you feed your mind random numbers, it will get distracted by stuff that doesn't matter. Oh, website visitors is down, why is that... Next minute you're editing ads and watching YouTube videos on hooks, instead of reviewing CV's for your next hire.

The beach test is as much about how to reduce distractions as it is about really knowing your business. But that's the point of the test. To force you to see if you really know your business. And then of course to help you direct all your efforts into improving the number that actually matters.

For Compound, I only care about "paying members". It's the only number I check more than monthly. For the first year or three I owned the gym I was looking at 20 stats a week. Now I go weeks without looking at any. They don't matter.

If paying members does decline, I know exactly where to check next "customer satisfaction score", then it's leads per week and so on. I only need 3 or 4 numbers to guide us back to the right path.

For Gravy, I only care about "applications submitted" which probably means nothing to you. And that's a good sign that I've picked the right one. If your number is generic enough for outsiders to understand it, it probably isn't the right number.

My job at Gravy is to build our fundraising platform. When "applications submitted" is increasing I spend 85% of my week doing that. When that number starts dropping, I spend upwards of 50% of my week addressing that issue before I get back to building.

If you can't pass the beach test you probably have two problems.

The first is you don't really understand your business. That's okay when you're new, but after a year or so, that starts to become problematic.

The second is you're not working on the right things. If you don't know your number, you don't know what's important. And if you don't know what's important, you'll work on the wrong things. At that point, you might be better off doing nothing at all.