3 Important Things About Metrics Founders Should Know
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3 Important Thing About Metric Jan König - @einkoenig founders should know Metrics for Startups
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Read the full blog post here: http://jan-koenig.com/blog/?p=109
Transcript of 3 Important Things About Metrics Founders Should Know
3 Important ThingsAbout Metrics
Jan König - @einkoenig
founders should know
Metricsfor Startups
things you
probably know
0
The AAA’s of Metrics
Actionable
0
Auditable Accessible
What Makes a Good Metric?0
A rate or a ratio rather than an absolute or cumulative value. New users per day is better than total users.Comparative to other time periods, sites, or segments. Increased conversion from last week is better than “2% conversion.”No more complicated than a golf handicap. Otherwise people won’t remember and discuss it.For “accounting” metrics you use to report the business to the board, investors, and the media, something which, when entered into your spreadsheet, makes your predictions more accurate.For “experimental” metrics you use to optimize the product, pricing, or market, choose something which, based on the answer, will significantly change your behaviour. Better yet, agree on what that change will be before you collect the data.
Source: http://leananalyticsbook.com/one-metric-that-matters/
3 things you
should know
about metrics
0
A metric tells a complete story using data, measures, information, and other metrics to answer a root question.
Martin Klubeck
“
”
1
Metrics
Root Question
Metric
Information Information
Measures Measures Measures
Data
Data
DataData DataData
Data
Source: Klubeck, “Metrics”, page 13
1
Examples
Data, Measures, and Information1
Page Hits on Dec 232500 (Data) Hits (Measures)
Page Hits per Day Last Week2500 (Data) Hits (Measures)2600 (Data) Hits (Measures)……2350 (Data) Hits (Measures)
2520 (Data) Hits (Measures) per Day (Information)
Information
Data
Data Data
DataData
Data
Measures
DataData
Data
Measures
Root Question1
“Answers are only useful when you know the question”
– Martin Klubeck
A wrong question means:wrong data, measures, and informationwrong metric interpretationwrong actionwrong product change
Finding the Right Question: 5 Whys1
Ask Why (What, How, What if?) until you can no longer answer with a deeper need.
Example
“I want to measure retention with a cohort analysis”
“Are the users coming back to use my product?”
“What could make them come back more often?”
“What product changes do address theusers’ needs and lead to an increasing usage?”
(possible) root question
“What do I have to change to make a betterand more desired product for my users?”
“Is my product at the moment solving their problems well enough to be important to them?”
Metrics are a tool, an indicator –they are not the answer and may havemultiple interpretations.
Martin Klubeck
“
”
2
Metrics as Indicators2
A Systematic Approach for Data-Driven Decision Making
“Data is just one perspective”Source: http://blog.intercom.io/the-problem-with-data-driven-decisions/
Never base decisions on core numbers!
Use metrics as indicators to find out wheresomething is wrong.
Then do further investigation.In-depth Analysis. Customer Development.
http://jan-koenig.com/blog/?p=82
Triangulation is a principle foundationfor a strong metric program.
Martin Klubeck
“”
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Triangulation3
Product / Service HealthCustomer View
Delivery
Usage
Customer Satisfaction
Example: Triangulation of Effectiveness Metrics
using multiple measures, collection methods, and sources for a comprehensive picture
Triangulation in a Restaurant3
Restaurant’s Effectiveness Metrics
Delivery Usage Customer Satisfaction Possible Interpretation
Crazy! Time to look at other metrics to improve your business.
Source: Klubeck, “Metrics”, page 149f
Great food and a loyal, but very small customer base. Maybe a bad location.
“The only game in town.” Or a product customers need but don’t want.
OK, something is wrong here. You know that.
with Triangulation
Triangulation in a Restaurant3
Restaurant’s Effectiveness Metrics
Delivery Usage Customer Satisfaction Possible Interpretation
good
good
bad
bad
without Triangulation
focus on
?
So, how do I use these principles? What’s next?
Martin Klubeck’s Answer Key
Product / Service Health
Process Health
Organizational Health
Future Health
Return vs.Investment
State of theOrganization
Customer View
Business View
Worker View
Leadership View
CompanyMaturity
?
Martin Klubeck’s Answer Key
Process Health
Organizational Health
Future Health
Return vs.Investment
State of theOrganization
Business View
Worker View
Leadership View
Product / Service HealthCustomer View
?
Focus on Product Health
Product / Service HealthCustomer View
Delivery
Usage
Customer Satisfaction
?
Focus on Product Health
Product / Service HealthCustomer View
Delivery
Usage
Customer Satisfaction
?
Customer Journey
Activation, Retention, Revenue
Feedback?
Hey, I’m Jan!
I am a German student and I’m currently writingmy bachelor’s thesis about metrics for startups.
I would love to get some feedback about this approach(which is the “high-level part” of my thesis).
I will upload some other presentations about metricsdesign in startups within the next weeks.
Glad to hear from you!Jan
Twitter: @einkoenigMail: [email protected]
Photo Credits
Slide 3Jan Krömer, http://www.flickr.com/photos/81336062@N00/285835148ZionNPS, http://www.flickr.com/photos/54168808@N03/5015792234comedy_nose, http://www.flickr.com/photos/23408922@N07/4873283906
Slide 6Neta Bartal, http://www.flickr.com/photos/53742192@N05/6646556769/
Slide 11Furryscaly, http://www.flickr.com/photos/98528214@N00/312210315
Slide 13loop_oh, http://www.flickr.com/photos/80384851@N00/7986197617
