Lean Analytics summary

So what's the goal of staying data-informed? Ultimately, your data should guide you to the right product, and the right market, before your money runs out. But you also need to find an effective way to measure your success. That means finding good metrics that provide you with relevant and meaningful data.

Good metrics have three important characteristics: they're comparable and understandable, and they're most effective as ratios.

The key to thriving as a start-up founder is finding where the demand for your product and your ability and desire to answer that demand intersect.

So first, find a business you're truly passionate about. Building a start-up isn't just about creating something that works. Ask yourself: What do you really want to do?

There are several ways to understand start-up development. The Lean Analytics framework says that start-ups go through five distinct stages: Empathy, Stickiness, Virality, Revenue and Scale.

In the first stage, Empathy, you identify a need that people have. This points you in the right direction: you'll know where your niche in the market is.

One of the keys to achieving success in your start-up is staying focused. That means you need to concentrate on the single metric that's most critical to whatever stage you're going through.

You should always know what your most important metric is at any given time. As a start-up founder, you'll have to keep track of multiple figures, like revenue per customer or customer satisfaction. Some of these numbers will matter immediately, and some you'll store for future use – when you present your company's history to an investor, for example.

A lot of start-ups are based on truly creative ideas and some manage to attract large groups of people. Few start-ups actually make money, however. Even big organizations like Facebook and Twitter have struggled to make money from their user bases.

That's why your business model is so important. As a start-up founder, you need to define yours.

If you're like most people, you've probably bought several things online during the course of your life. E-commerce companies are very common nowadays. In fact, they're probably the most common kind of online business there is.

E-commerce companies focus on customer loyalty and acquisition. They usually make money by selling products they can deliver electronically, like music downloads on iTunes, or physically, like shoes from Zappos.

Google's search engine and CNN's website are both examples of media sites, and much of these sites’ revenue comes from advertising. So if your business model is a media site, you'll probably be focused on earning money from advertisements, too.

Inserting ads into online content is fairly easy, and a lot of websites rely on the money from advertising to pay the bills.