What You’ll Find This Week

I talk a lot about the metrics of innovation. But the moment I say “metrics” most people’s heads go to “dashboard.” And I believe that’s the wrong POV for determining progress and impact of your innovation or new venture building efforts. Instead, we need to focus on what we’re proving and disproving.

Eric Ries called this Innovation Accounting. Marty Cagan talks about Product Scorecards. I’m sure you’ve seen it called something else entirely. Regardless of how you name it, the purpose is to determine what’s working and what’s not without drowning in metrics.

In this edition, we break down our perspective on how to track progress using something simple: a Kill Chart.

Here’s what you’ll find:

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This Week’s Article

Most teams building new ventures can’t answer a simple, critical question.

Are we making real progress toward a viable business?

Teams fake progress by elevating the wrong signals. Metrics like signups, clickthroughs, or time-on-site feel like traction, but they aren’t tied to any actual behavior change that proves value to the end user.

These signals can make a dashboard or a slide deck look impressive. But they don’t answer the question above.

Most teams rely on familiar metrics-like pageviews, signups, or engagement because they’re easy to collect and widely accepted. But those metrics were built for optimizing a product that’s already working. In early-stage ventures and innovation efforts, you don’t need to optimize. You need to validate.

If your core assumptions are wrong, none of those metrics will catch it. They’ll only tell you how efficiently you’re scaling something that might not work at all.

Learning only matters when it’s tied to signals that challenge your assumptions and drive decisions. But most teams stop short. They confuse activity with insight and miss the chance to cut real risk.

When Eric Ries first introduced innovation accounting in The Lean Startup, it was radical. It gave teams permission to learn before scaling. It reframed failure as progress. It said: build, measure, learn…and do it fast.

When teams say they’re using innovation accounting today, they usually mean one thing: they’re tracking whatever metrics are easiest to collect.

Over time, the concept has been diluted. Instead of pushing teams to validate assumptions, it’s been repurposed as a way to rebrand existing metrics. Pageviews become ‘learning.’ Activity gets framed as ‘insight.’ Teams check the box without ever challenging the model.

It’s innovation accounting in name only. No core risk. No real learning. No measure of real business viability.

Most teams end up treating innovation accounting like a reporting framework instead of a decision-making tool. They run safe tests, celebrate soft signals, and fill dashboards with activity that looks productive but ultimately doesn’t challenge the business logic. Learning milestones get dressed up as progress, even when nothing risky was tested.

There’s no pressure to invalidate anything, and no urgency to act on what the data really says.

Innovation accounting was meant to push you into uncomfortable, decision-forcing territory. But today, it’s mostly just used to make a case for continued funding.

Teams often confuse innovation accounting with innovation reporting. Reporting is about what happened. Accounting is about what it means, and what to do next.

When innovation accounting gets reduced to reporting, it loses its power. Dashboards fill up with metrics that look impressive but don’t lead to decisions. Updates highlight activity, not insight. And most importantly, no one is forced to confront whether the business logic is actually working.

This is the real problem. Innovation accounting only matters if it drives decisions. If your numbers don’t help you move forward, change course, or shut down the venture, they’re just noise.

Innovation accounting is a system for tracking whether your venture is becoming more viable over time, regardless of whether you’ve found revenue or product/market fit yet.

As Rohit Lokwani summarizes it:

Innovation accounting doesn’t care how much you build or how much attention you attract. It cares whether you're proving or killing the critical assumptions that hold your business model together.

At its best, innovation accounting turns assumptions into hard bets, and learning into hard decisions. If you’re not using it to cut risk, it’s not innovation accounting. It gives the illusion of momentum, but never gets you closer to a real business.

If you want to implement innovation accounting, start here:

What needs to be true in order for this to work?

This question shouldn’t serve as simply a strategic question to be answered. It’s the root of your entire business model (and therefore innovation).

Every innovation, whether in a startup or inside a larger organization, rests on a handful of risky assumptions. Most teams build as if those assumptions are already proven. They jump into building, shipping, and presenting traction. But none of that matters if the core assumptions are wrong.

This is where innovation accounting starts: by naming your assumptions out loud.

Write them in plain language:

Then ask: what’s the fastest way to prove that wrong?

Because if you can’t kill the idea, you can’t trust it. And if you don’t test the risk, you’re just layering execution on top of uncertainty and hoping it turns into a business.

You don’t need more metrics. You need to break, or prove, the assumptions that underpin your idea. Every venture rests on one core belief that, if false, takes everything down with it. That’s the one to test first.

Ask yourself: what are we most afraid might not be true?

Will customers behave the way you expect? Will the economics hold up under pressure? Will people take the action your model depends on?

Then pressure-test that assumption. Find out what breaks and what doesn’t. If every test ends in "maybe," you’re wasting time. Innovation accounting only works when it forces hard decisions.

A kill chart does what most dashboards won’t: it tracks real risk, forces real decisions, and shows whether you're getting closer to a working business.

This is a simple tool that tracks which of your key assumptions survive testing and which don’t.

No vanity metrics. No volume-based illusions.

Just a visual record of truth over time.

The more assumptions you test, and kill, the stronger your business becomes.
Or it doesn’t. It just dies. And that’s progress too.

Where do you track it? You can still use a dashboard, but it should be designed to track risk, not activity. And the kill chart belongs at the top.

Every metric underneath it should serve a purpose: to help validate or invalidate assumptions, and to force a decision. If your metrics don’t reinforce decision-making, they don’t belong on your dashboard.

Most teams report what’s easy to measure. But trust is earned by showing what’s risky and how you’re killing it.

Skip vanity metrics like downloads or clickthroughs. At this stage, the only metrics that matter are the ones tied to learning something risky and acting on it:

Good innovation metrics should make you uncomfortable. They challenge the roadmap. They threaten pet ideas. They force hard choices. That's not a problem, it's the entire point.

Here’s what often gets lost: while most innovation leaders talk about failure, few teams are equipped to show how they’re actively testing and invalidating their own assumptions.

But the teams that earn trust aren’t the ones who pretend to be on track. They’re the ones who show they’re making real bets and killing the ones that don’t work.

A kill chart builds credibility. It shows that you’re not optimizing noise. You’re building something that can survive the truth.

And investors, execs, and customers all respect that.

You don’t need to overhaul your entire innovation process. You just need to change your perspective. Here’s how to start:

If it feels a little scary, you’re doing it right.

Innovation accounting isn’t a dashboard. It’s a system for testing what matters, killing what doesn’t, and deciding what to do next.

When it’s used well, it forces clarity. Assumptions are named. Risks are tested. Weak ideas die early. Strong ideas get stronger.

But when innovation accounting is misused, it supports the idea of progress while burning time, money, and trust on ventures that should’ve been killed months ago.

So stop tracking motion. Start tracking risk.

And measure whether your venture is actually surviving the truth.

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