There are risks in determining which metrics to track for you company or product. If you’ve read The Lean Startup, you know the danger of vanity metrics. These are the high level numbers like page views or user counts that may look good on the surface but generally don’t provide actionable feedback. It is easy to get distracted by vanity metrics and dangerous if they become your measure of success. Another common risk is dashboard overload: tracking so many metrics that you can’t measure the effects of your decisions. Too often a case can be made for or against any decision by citing one statistic or another, leading to uncertainty at best or paralysis at worst.
So what metrics should you be tracking? Short answer: it depends. Long answer: it depends and it changes over time.
Knowing What to Measure When
A major factor in determining the right metrics to track is knowing what stage of product development you are in. If you are in a startup or working on a new product, then your minimum viable product (MVP) changes as you prove or disprove hypotheses about your market, your solution, and your business model. Your focus changes through these stages and experiments, so your key metrics need to change, too.
If you are validating an idea, then clicks on an ad or sign-ups per week may be your primary focus to prove that there is a market interested in your product. Once you know there is interest, it’s time to focus on the product itself. Conversion might be an early goal, whether that is growing weekly active users or conversions from non-paying to paying customers. Then, once you have a stable product and a small user base, focus on retention. Keep your current customers happy, returning, and continuing to use your service or make purchases. Now you have a validated idea, an MVP, and a way to retain customers, so it is time to go back to acquisition.
This cycle will continue as you validate new features, try new marketing methods, and experiment with different retention strategies. As your MVP changes, you need to adjust the metrics you focus on day to day and week to week.
One Metric That Matters
To dive deeper into finding the right key metrics for your business, read Lean Analytics by Alistair Croll and Benjamin Yoskovitz. One of their core concepts is the One Metric That Matters; putting the focus on a single, primary metric for the current stage of your product at any time. A frequently referenced example is Facebook’s “7 friends in 10 days” metric. By capturing and analyzing data about the characteristics and behavior of active, returning users, Facebook found that users who connected with at least 7 friends in their first 10 days were much more likely to become long-term users of the service. With that insight, they drove an early growth stage by focusing on features that made “7 in 10” increasingly easy for a user to achieve and thus improved the percentage of new users who reached that milestone.
The One Metric That Matters approach does not suggest that you only track a single metric. You should keep tabs on as much as you can so long as it tells you something about the product or the user. However, to know if you are on a path to real product growth, you have to look beyond the basics and past the noise. Instead, The One Metric That Matters is your bulletin board material. It’s the specific, actionable metric that’s appropriate for a specific product stage. It’s what you slap up on the wall and say, “Right now, this is what we’re going to build for.” Having One Metric That Matters that is appropriate to the product development stage should guide prioritization, development, and experimentation during that time. It will also provide a means to objectively test the value of any product change in terms of whether it improves that metric.
Building a digital product?
If you are dealing with dashboard overload or worried about wasting time on metrics that are not actionable, consider affixing One Metric That Matters to each stage of a product’s lifecycle. Doing so will increase focus and help you build the right thing for the right user at the right time.