| name | prd-v03-outcome-definition |
| description | Define measurable success metrics (KPIs) tied to product type during PRD v0.3 Commercial Model. Triggers on requests to define success metrics, set KPI targets, determine what to measure, establish go/no-go thresholds, or when user asks "how do we measure success?", "what metrics matter?", "what's our target?", "how do we know if this works?", "define KPIs", "success criteria". Consumes Product Type Classification (BR-) from v0.2. Outputs KPI- entries with thresholds, evidence sources, and downstream gate linkages. |
| context | fork |
| allowed-tools | ["Read","Write","Edit","Glob","Grep","WebSearch","WebFetch"] |
Outcome Definition
Position in HORIZON workflow: v0.2 Product Type Classification → v0.3 Outcome Definition → v0.3 Pricing Model Selection
Consumes
This skill requires prior work from v0.2:
- BR-* product type entry (from Product Type Classification) — Classification determines which metrics are relevant
- CFD-* entries (from Problem Framing and Competitive Landscape) — Customer evidence about desired outcomes
- Market benchmarks and competitor metrics — Reference data for Tier 1/2 targets
This skill assumes v0.2 classification is complete.
Produces
This skill creates/updates:
- KPI-* entries (outcome definitions) — Measurable success metrics tied to product type
- BR-* outcome rules (optional) — Constraints derived from KPI thresholds (e.g., "Launch blocked if LTV:CAC < 3:1")
- Success criteria artifact — Dashboard of leading + lagging indicators that define product-market fit
All KPI entries should include:
confidence: 2-3/5 (based on benchmark evidence, not just assumptions)- Evidence source (competitor benchmarks, CFD validation, industry reports)
- Forward target: "Would move to 4/5 if we observe real customer data"
Example KPI entry with confidence:
KPI-001: Time to First Revenue
Type: Tier 1 (Revenue)
Category: Lagging
Definition: Days from market signal identification to first paying customer
Target: ≤14 days
Confidence: 2/5 (source: GearHeart-methodology + 0-customer-validation)
Evidence: BR-001 (GearHeart standard); No pre-customer validation yet
Next Target: "Would move to 4/5 if actual customer reaches paying status in ≤14 days"
Downstream Gate: v0.5 Red Team — if not hit by Day 21, evaluate pivot
---
KPI-002: Conversion Rate (Trial → Paid)
Type: Tier 2 (Leading Indicator)
Category: Leading
Definition: (Paid customers / Trial signups) × 100, measured over 60-day trial period
Target: ≥15% (benchmark: SaaS median 10-15%)
Confidence: 3/5 (source: SaaS-benchmarks + 1-SMB-validation-conversation)
Evidence: CFD-042 (competitive landscape shows SMB conversion patterns)
Next Target: "Would move to 4/5 if we see actual cohort conversion in our product"
Downstream Gate: v0.7 Build Execution — EPIC complete when KPI-002 validated
Metric Quality Hierarchy
Not all metrics are equal. Use this tier system:
| Tier | Metric Types | Why It Matters |
|---|
| Tier 1 | Revenue (MRR, first dollar, ACV), Churn (logo, NRR), LTV:CAC | Revenue validates market fit. "First dollar IS the proof." |
| Tier 2 | Conversion rates (trial→paid, lead→customer), Time to Value, Activation | Leading indicators that predict Tier 1 outcomes |
| Tier 3 | Engagement (DAU, sessions), Feature adoption, NPS | "Nice to know" — only track if tied to Tier 1/2 |
Rule: Every product needs at least one Tier 1 metric. Tier 3 metrics without Tier 1/2 correlation are vanity metrics.
Product Type × Metric Selection
Metrics must align with product type from v0.2 classification:
| Product Type | Primary Metrics | Anti-Metrics (Avoid) |
|---|
| Clone | Feature parity score, Price delta vs. leader, TTFV vs. leader | Generic engagement (doesn't prove you beat leader) |
| Undercut | Price per [unit] vs. leader, Niche conversion rate, CAC in target segment | Broad market share (you're niche by design) |
| Unbundle | Category NPS vs. platform, Vertical retention, Feature depth usage | Platform-level metrics (irrelevant to your slice) |
| Slice | Marketplace ranking, Install→activate rate, Platform retention lift | TAM metrics (platform owns the market) |
| Wrapper | Time saved per workflow, API reliability, Integration adoption | Standalone usage (value is in connection) |
| Innovation | Education→activation conversion, Behavioral change rate, Reference customers | User counts without activation (people try, don't convert) |
Leading vs. Lagging Framework
Every product needs BOTH:
Leading Indicators (actionable now, predict outcomes):
- Sequences sent, open rates, trial starts
- Time to first value, activation rate
- Feature adoption in first 7 days
Lagging Indicators (confirm strategy worked):
- MRR, churn rate, LTV:CAC
- Net Revenue Retention (NRR)
- Customer count, logo churn
Pattern: Track leading weekly, lagging monthly. If leading indicators fail, you can pivot before lagging indicators confirm disaster.
Target-Setting Rules
Targets must be evidence-based, never arbitrary:
Good targets (use these approaches):
- Competitor benchmark × safety margin: "SMB churn benchmark 3-5% → use 5%"
- Revenue gates: "First dollar by Day 14" (Signal → $1: 14 days)
- Ratio thresholds: "LTV:CAC ≥ 3:1"
- Time bounds: "TTFV < 5 minutes for self-serve"
Bad targets (anti-patterns):
- Round numbers without evidence: "10% improvement"
- Engagement without revenue tie: "1000 DAU"
- Aspirational without baseline: "Best in class retention"
Output Template
Create KPI- entries in this format:
KPI-XXX: [Metric Name]
Type: [Tier 1 | Tier 2 | Tier 3]
Category: [Leading | Lagging]
Definition: [Exact calculation formula]
Target: [Specific threshold with evidence source]
Evidence: [CFD-XXX or benchmark source]
Downstream Gate: [Which decision uses this — e.g., "v0.5 Red Team kill criteria"]
Measurement: [How/when measured — e.g., "Weekly via Mixpanel"]
Example KPI- entry:
KPI-001: Time to First Revenue
Type: Tier 1
Category: Lagging
Definition: Days from market signal identification to first paying customer
Target: ≤14 days (GearHeart standard: Signal → $1: 14 days)
Evidence: BR-001 (GearHeart methodology)
Downstream Gate: v0.5 Red Team — if not hit by Day 21, evaluate pivot
Measurement: Manual tracking in PRD changelog
Anti-Patterns to Avoid
- Vanity metrics as primary: "50K users" means nothing if only 500 pay
- Traffic without quality: High volume + low engagement = quality problem
- Arbitrary targets: "10% improvement" without baseline or benchmark
- All lagging, no leading: Can't course-correct if you only see outcomes monthly
- Ignoring product type: Clone metrics ≠ Innovation metrics
- Unmeasurable outcomes: "Better experience" — how do you know?
Downstream Connections
KPI- entries feed into:
| Consumer | What It Uses | Example |
|---|
| v0.5 Red Team | Kill thresholds | "If KPI-001 not hit by Day 21, pivot" |
| v0.7 Build Execution | EPIC acceptance criteria | "EPIC complete when KPI-002 validated" |
| v0.9 GTM | Launch dashboard | Track KPI-001, KPI-003 post-launch |
| BR- Business Rules | Derived constraints | "BR-XXX: No launch if LTV:CAC <3:1" |
Detailed References
- Good/bad examples: See
references/examples.md
- Benchmark sources: See
references/benchmarks.md
- KPI template worksheet: See
assets/kpi.md
