A Thought Leader Guest Post from Tristan Handy of ThinkGrowth.org:
The Startup Founder’s Guide to Analytics
You need analytics.
I’m very confident of that, because today, everyone needs analytics. Not just product, not just marketing, not just finance… sales, fulfillment, everyone at a startup needs analytics today. Analytics powers every decision, from the strategic to the tactical, from the board room to your line level employees.
This post is about how to create the analytics competency at your organization. It’s not about what metrics to track (there are plenty of good posts about that), it’s about how to actually get your business to produce them. As it turns out, the implementation question — How do I build a business that produces actionable data?—is much harder to answer.
And the answer is changing fast. The analytics ecosystem is moving very quickly, and the options you have at your disposal have changed significantly in the past 24 months. This post reflects recommendations and experience with the data technology of 2017.
First: Why should you listen to me?
I’ve spent the better part of two decades working in analytics. In that time, I’ve seen plenty of things go well, but a lot more go poorly. I spent the early part of my career implementing legacy enterprise BI (ugh). I built Squarespace’s first analytics competency from 2009–2010 and raised massive A round with the data. I was then COO of Argyle Social, a social media analytics startup, and subsequently VP Marketing at RJMetrics, a leading BI platform for startups.
Now I spend my days helping startup execs implement analytics as the CEO and Founder of Fishtown Analytics. At Fishtown, we start working with companies who have raised an A round and help them build their internal analytics competency as they grow. We’ve been through the exact process I’m going to describe in this article with over a dozen companies at this point, including Casper, SeatGeek, and Code Climate.
I’m going to walk you through, stage by stage, how your startup should be doing analytics. At each stage, my recommendations are going to answer to the question “What’s the absolute least I can get away with?” We’re not here to build castles in the sky; we need answers as cheaply as possible.
Let’s do it.
(0 to 10 employees)
At this stage, you have no resources and no time. There are a million things you could be measuring, but you’re so close to the details of your business that you’re actually able to make fairly good instinctual decisions. The one thing you need to make sure you are measuring is your product, because it’s your product metrics that will help you iterate quickly in this critical phase. Everything else can take a back seat.
What to do
- Install Google Analytics on your website via Google Tag Manager. The data won’t be perfect without more work but it’s not the right time to worry about that.
- If you are an ecommerce business, you really need to make sure that your Google Analytics ecommerce data is good. GA can do a decent job of tracking your ecommerce business all the way from visitor to purchase, so spend the time to make sure it’s right.
- If you build software of any type, you need real event tracking. I don’t care what tool you use — Mixpanel and Heap are very similar and they’re both good. At this point I wouldn’t think too hard about what you’re tracking: just use Mixpanel’s autotrack or Heap’s default installation. If you realize you need a datapoint, you’ll find it’s already there. This approach does not scale well, but for now, it’ll do.
- Your financial reporting should be done in Quickbooks. Your forecasting should be done in Excel. If you’re a subscription business, use Baremetrics for your subscription metrics. If you’re an ecommerce business, use your shopping cart platform to measure GMV. Don’t get fancy.
If you’re not technical, you may need an engineer to help out with GA and event tracking. This entire exercise shouldn’t take more than an hour or two, including reading the docs. It’s worth it to take the time out of building for this.
What not to do
Everything that is not one of the things above. Do not let someone...
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