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Lean Analytics
Use Data to Build a Better Startup Faster
Lean Analytics (2013) offers key advice on how to successfully build your own start-up. It follows a data-based approach to explain how you can use effective metrics to help your organization grow.
- Start-up founders and entrepreneurs
- Anyone looking to make their organization more effective
- People who want to understand start-ups better
Alistair Croll is an entrepreneur, author and public speaker who focuses on web performance, big data, cloud computing and start-ups. He's also the chair of O'Reilly's Strata conference, TechWeb's Cloud Connect and Interop's Enterprise Cloud Summit. Ben Yoskovitz is an entrepreneur who serves as mentor to several start-ups. He also speaks at conferences and events like the Lean Startup Conference and the Internet Marketing Conference.
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Lean Analytics
Use Data to Build a Better Startup Faster
- Read in 15 minutes
- Audio & text available
- Contains 9 key ideas
Synopsis
Lean Analytics (2013) offers key advice on how to successfully build your own start-up. It follows a data-based approach to explain how you can use effective metrics to help your organization grow.
Key idea 1 of 9
Start-up founders should be data-informed – not data-driven.
What is a start-up, exactly? It's an organization that aims to build a sustainable and replicable business model. Perhaps you’ve dreamed of founding one yourself?
If so, you'll need to stay informed about data. Data, in addition to guiding you along your journey, makes it hard to delude yourself.
So what is data?
It’s the numerical information that's vital to your business. If you run a media site, for example, you'll need data about ad-click numbers. If you're an investor, you'll need to know all the figures about the returns on your investments.
One reason that data is so crucial is that entrepreneurs often lie to themselves a bit when assessing their success. After all, they often need to convince other people (like investors!) of their ideas without having any hard evidence that these ideas will actually work.
However, if you believe too much in your dreams, your start-up probably won't survive. You need to stay grounded in reality – and that's where data comes in.
Data is the antidote to self-delusion. By allowing you to soberly measure your success, it keeps you on track: you'll know exactly where you stand as you work toward your goal.
You shouldn't become a robot that just follows the numbers, however. Your personal judgment is important too! You don’t want to be data-driven; instead, stay data-informed.
Though data is undeniably important, collecting and analyzing it can become addictive. Moreover, you'll run into trouble if you use data to optimize just one part of your business.
Imagine, for example, that you run a website, and your data shows that pictures of scantily clad women increase your click-through rate. If you just blindly follow that by filling your page with models in bikinis, you might undermine your business's image or integrity.
So don't become a slave to your data. Remember: data is ultimately just another tool.
Key ideas in this title
- Start-up founders should be data-informed – not data-driven.
- Good metrics are ratios that are both comparable and understandable.
- Start-up founders should concentrate on something that they’re good at, that they enjoy and that they can make money with.
- A start-up goes through distinct stages: Empathy, Stickiness, Virality, Revenue and Scale.
- Start-up founders should always focus on one metric above all the others.
- Start-up founders have to outline their business model and find the right customers.
- The best metric for an e-commerce start-up is revenue per customer.
- Media sites make money through advertisements, so click-through rates are the most important metric for them.
- Final summary
