The Lean Analytics Discipline of One Metric That Matters
In the tech industry, it’s trendy and increasingly common for a startup to characterize itself as “data-driven.” But what does this really mean? It’s meant to tell you that they track a lot of numbers—engagement, clicks, revenue, pageviews, whatever—a kind of shorthand for saying “we know what we’re doing.”
But still, while it is great to track many numbers, sometimes it’s possible to lose the forest for the trees. With literal millions of datapoints to consider, it can often be a sure way of losing focus. But achieving and maintaining focus is one of the main keys to startup success—so what gives? How can a startup keep focused while still remaining data-driven?
This is where the discipline of One Metric That Matters, developed by Alistair Croll and Ben Yoskotivz in Lean Analytics, comes in.
The One Metric That Matters
For example, Moz is a successful Software as a Service vendor that helps companies monitor and improve their website’s search engine rankings.
Joanna Lord, Vice President of Growth Marketing at Moz, says: “We are very metrics-driven. Every team reports to the entire company weekly on KPIs (key performance indicators), movement, and summaries. We also have a huge screen up in the office pumping out customer counts and free trial counts.”
But Joanna also says that one metric stands above the rest: Net Adds. This metric is the total of new paid subscribers minus the total who cancelled. This metric encapsulates and summarizes the goal of the business—because if they don’t have subscribers, they don’t have anything.
Moz tracks other related metrics, including Total Paying, New Free Trials Yesterday, and 7-Day Net Add Average. But all of these metrics are really secondary to the OMTM: Net Adds per day.
As Johanna puts it, “Net Adds helps us quickly see high cancel days and troubleshoot them[…]” That is, Moz is data-driven, but that doesn’t mean it’s swimming in data. Moz is able to capture a lot of data, but achieves focus by relying on one single metric above all other: Net Adds.
If you run a startup yourself, don’t let your ability to track many things distract you. Too often, it’s too hard to find the signal in all the noise, and the most meaningful data is lost in the rest. Capture as much data as you can, but focus on the one piece of data, your OMTM, that’s of most importance for you at the current stage of your business.
So next time you’re feeling a bit overwhelmed by the multitudes of data you have to sift through, sit back and think about exactly what your business is trying to accomplish. Chances are, there’s one metric that explains that very thing.
In Lean Analytics, Alistair Croll and Ben Yoskotivz explain just how you can sift through all that data in order to see the forest for the trees. You can also read the book’s key insights on Blinkist – it’ll only take 15 minutes!