How to Find Your “One Metric to Rule Them All”
Sam Shank explains why prioritizing the right metric can make the difference between failure and product-market fit.
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This week’s post is a guest essay from a16z speedrun visiting partner Sam Shank, who co-founded and led HotelTonight, which sold to AirBnB in 2019. Sam makes a case for applying extreme focus to the metrics they track and prioritize.
I’ve started three companies. The first two didn’t find product market fit. The third one created a new category in travel and sold for over $400 million. The biggest difference between them had nothing to do with the market, the team, or the product. It had to do with a simple spreadsheet.
My second company was DealBase, a travel deals search engine. It was a complex business so I built what felt natural: A weekly dashboard to track our progress. This sounds like a reasonable thing to do! Except we just kept adding to it. Every week, somebody would say “we should also be tracking X” and we’d add another column. Eventually, we were staring at roughly 80 metrics every single week. Perhaps you too have had a similar explosion in stuff to track, a phenomena I think of as metrics slop. Staring at that spreadsheet, I had no idea if the business was actually doing well. We were measuring everything and understanding nothing.
At HotelTonight, we went all in on one number: total transactions. We just wanted to increase the number of transactions that we brought to our hotel partners. That’s it.
DealBase didn’t work out while HotelTonight became one of the fastest-growing travel apps in the world. I don’t think that’s a coincidence. And in the years since, as an investor, the pattern has only gotten clearer to me. The best early-stage founders I meet share a kind of painful, almost reckless simplicity about how they run their companies. They’re all in on improving one metric while de-emphasizing everything else.
This idea sounds obvious. And that’s exactly why most founders fail to do it.
How Simplification Saved HotelTonight
It wasn’t like I just hopped into weekly all-hands and said “increase transaction volume, team” and called it a day. Instead, I became obsessed with simplification across every dimension of the business. The point of the metric is to be a forcing function, the lens by which all company choices are examined. For example, we engineered the product to maximize volume. It took eight seconds to book a hotel, three taps.
The early days tested that conviction.
When we launched, people were interested in what we were building. They downloaded the app. They just weren’t booking. We had targeted 100 transactions in our first month, and we got 55. About half of those were us booking hotels for our friends and family, or essentially forcing them to use the product.
That was a gut-check moment. Do we even have a business here? We had set a clear goal, missed it, and now had to decide what to do. So, we did as all great tech startups do, we doubled down. It worked. It just took a lot more effort than we expected.
For years after that, transaction volume was the only number that mattered (though we shifted to revenue, and then profitability as the company matured.) But in the early days, when we needed to prove to our hotel partners that the flywheel was spinning, the simplicity of that one metric kept the entire team focused on what actually mattered.
This approach isn’t unique to HotelTonight. But for other businesses, and other founders, how should you think about finding that “only number that matters?”
The Pattern Across Iconic Companies
Many of the most successful startups of the last two decades share a version of the same discipline, and the metric they chose varied by business type. But the principle was consistent: find the one number that, if it goes up, the business is absolutely going to be in a position to be sustainable.
B2B SaaS companies tend to rally around ARR (but that may be wrong).
You can collect design partners, letters of intent, or verbal commitments. But if nobody is paying, it doesn’t count, so I understand why people focus on ARR so much. That said, when you are building productivity software and are trying to enable a new way of working, then ARR is a trailing indicator. Instead, you should focus on usage.
Slack is the perfect example of this. They discovered that once a team exchanged 2,000 messages, 93% of them continued to use Slack. That number became the focus of every product decision, onboarding tweak, and engineering sprint. The result was among the fastest any B2B SaaS company had ever reached a $1 billion valuation at the time. Every product has some point of critical mass, where usage crosses the productivity rubicon, and suddenly your customers can’t imagine going back to the “old way” of doing things.
Marketplace businesses should obsess over throughput. Getting the flywheel spinning is everything in the early days. Whether that is transaction volume or gross booking value, you should be all in on whatever captures whether supply and demand are connecting.
Airbnb almost died before they found this focus. The founders had maxed-out credit cards and couldn’t get investors to return their calls. Paul Graham’s advice reframed their entire approach: it’s better to have 100 customers that love you than a million customers that sort of like you. They narrowed everything to one metric (nights booked) and one market (New York City). Brian Chesky flew from Mountain View to NYC, went door-to-door photographing listings, and even slept in hosts’ apartments. Their financial goal was “ramen profitability:” $4,000 per month to cover rent and food, a number they taped to their bathroom mirror. Booking fees went from $460 to $897 to $1,428 in three consecutive weeks, and the flywheel caught.
Consumer companies should focus on engagement and retention before monetization. For a lot of social products, DAU/MAU ratios and audience size are what matter because once you have the audience and the retention, you can monetize in a bunch of different ways.
WhatsApp made the most extreme version of the philosophy anyone has ever seen. Jan Koum tracked monthly active users and message reliability. That’s it. In 2013, competitors LINE and KakaoTalk were generating $338 million and $200 million in revenue respectively. WhatsApp earned $10.2 million total. Koum even charged $1 per year for the app as an intentional brake on growth, so his team could focus on building servers that wouldn’t crash and a product that wouldn’t drop messages. When Facebook acquired WhatsApp for $19 billion, users were opening the app an average of 23 times per day and it was handling 50 billion messages daily. That’s more than global SMS volume.
Why People Don’t Do This
If this advice is so obvious, why do most founders ignore it? Because following it requires accepting a kind of suffering that goes against every natural instinct.
Focusing on one metric means watching money leave your account every month and choosing not to panic about it. It means firing someone who’s well-liked but doesn’t move the number. It means hearing public criticism and deciding it doesn’t matter yet.
Venture capital exists to give you permission to make these trade-offs. When a VC writes you a check, what they’re really saying is: you can now make payroll for two years. Go build toward proving one thing. That permission, which is agonizing, is the actual product you’re buying when you take early-stage venture money.
The exercise that sharpens all of this is taking out the red pen. Periodically, look at everything the company is working on and ask: are we working on the very best things right now to grow that number, or should we shift resources?
Why I could be wrong
The strongest counterargument to this approach is that myopic focus leads to bad outcomes. There are many examples in Silicon Valley of companies that were just flashes in the pan.
However, the answer isn’t more metrics. The answer is building a founder’s intuition to what matters beyond the metric.
Good founders understand intuitively where the guardrails are. They know when a customer complaint signals a systemic problem and when it’s noise to brush off. They don’t need a customer satisfaction metric. That would be the accountant approach, and it leads you right back to 50 KPIs and a team that doesn’t know what to focus on.
The CEO can privately monitor those guardrail signals. You may have a private dashboard with those 80 metrics! But you don’t need to focus the whole team on them. The real skill is choosing a number where growth and sustainability aren’t in conflict—and then trusting your judgment on everything else.
The Action Step
If you believe any of this, here’s what to do when you close this email or switch tabs.
Pick your one metric. The specific number depends on your business type but the principle is the same. Choose a metric where, if it goes up, the business is clearly going to survive and grow.
Live and breathe the metric. Make sure every person on the team knows the number. It should be top of mind every day, every moment. You should wake up wanting to see what that number is. You should obsess over it.
Make every initiative ladder up. Every project, every sprint, every hire should connect to growing that metric. Sometimes the connection is direct. Sometimes it’s indirect. But if someone can’t articulate how their work ladders up to the one number, that’s a problem.
Take out the red pen. Regularly audit what the company is working on. Ask: are these the very best things we could be doing to grow the metric? If not, make changes. This is where the pain lives, but this is also where the focus compounds.
Have questions for Sam? Reply and let us know. And for more weekly dives into the world of early stage startups, subscribe below.
This reminds me of the book The ONE Thing by Gary Keller. In it he argues that you need to figure out what your goals are and the one thing you need to do now that will get you closer to that goal than anything else.
I feel that early on, metrics change quite quickly, and with each stage of growth, the numbers or the metrics evolve differently for every business.