Y Combinator Question 39: Which Hard Idea Will Improve the KPIs the Most? Which Medium? Which Easy?
This Y Combinator question explores how different levels of project difficulty — hard, medium, and easy — can each impact your key performance indicators (KPIs).
Part of the series:
Y Combinator: 40 Questions and 40 Answers
Y Combinator: 40 Questions and 40 Answers
This question is designed to assess your team’s ability to evaluate the potential impact of various initiatives relative to their complexity.
Understanding which projects offer the highest return on investment, regardless of difficulty, is crucial for prioritizing and strategizing product development effectively.
1. Why Y Combinator Asks This Question
Y Combinator wants to gauge your ability to align product development efforts with strategic goals effectively. This question tests whether your team can identify which projects, regardless of their difficulty, will significantly impact your KPIs and overall business objectives.It also helps investors understand how you balance risk and reward in your development strategy.
2. How to Answer the Question
Discuss how each category of project difficulty (hard, medium, easy) includes ideas that can positively impact your KPIs and explain why these specific projects were chosen based on their expected impact.Articulate how you measure the potential benefits of each project and prioritize them accordingly. Provide examples of projects from each difficulty level and describe how implementing these would enhance specific KPIs.
3. How NOT to Answer the Question
Avoid vague or non-specific answers that do not clearly link projects to improvements in KPIs.Do not imply that all projects have an equal impact on your KPIs or that difficulty alone determines their potential value. The ability to critically assess and articulate the impact of projects of varying complexity on your KPIs is crucial.
4. An Example, Based on a Tech Startup
Consider a tech startup, OmniChat, that develops an AI-driven chatbot platform. Here’s how they might respond:- Hard Idea: “Integrating our chatbots with advanced natural language processing (NLP) capabilities is a hard project but it will significantly improve our KPI of customer satisfaction rates. By understanding and responding to user queries more accurately, we expect to see a 40% improvement in customer service ratings.”
- Medium Idea: “Developing a proprietary data analysis tool to better understand user behavior patterns is a medium-difficulty project. This tool is expected to enhance our KPI of user engagement by providing more personalized experiences, aiming for a 25% increase in daily active users.”
- Easy Idea: “Adding multi-language support to our chatbot platform is an easier project that can broaden our market reach and directly impact our KPI of new user acquisition. We anticipate a 15% growth in international users within the first six months after implementation.”
Y Combinator assesses how startups prioritize product development initiatives across different levels of difficulty, focusing on aligning projects with strategic goals and understanding their potential impact on key performance indicators.