Lean Analytics

“Lean Analytics: Use Data to Build a Better Startup Faster” by Alistair Croll and Benjamin Yoskovitz is a book that provides practical guidance on how to use data to measure and improve your product, with a focus on startups.

Here are some of the best insights from “Lean Analytics: Use Data to Build a Better Startup Faster”:

Identify the one metric that matters (OMTM) — This is the one metric that best captures the core value your product delivers to customers. By focusing on this metric, you can track the health of your product and make data-driven decisions.

• The OMTM should be tied directly to the core value proposition of your product.
• It should be simple and easily measurable.
• It should be an actionable metric that you can improve over time.
• The OMTM should be unique to your business and differentiate you from competitors.
• It should be relevant to your customers and help them achieve their goals.
• You should regularly review and update your OMTM as your business evolves.
• It’s important to communicate the OMTM to the entire team and ensure everyone is aligned on it.
• You can use A/B testing to identify the OMTM and validate it with real data.
• The OMTM should be tied to specific actions you can take to improve your product.
• The OMTM should be tracked over time to monitor progress and identify areas for improvement.

Use cohort analysis — This involves tracking the behavior of a group of customers who share a common characteristic, such as signing up for your product in the same week. This can help you understand how your product is performing over time and identify areas for improvement.

• Cohort analysis involves grouping customers based on a shared characteristic, such as the week they signed up for your product.
• This approach helps you understand how customer behavior changes over time and identify trends.
• Cohort analysis can help you identify the key drivers of customer retention and churn.
• You should track metrics for each cohort over time to identify areas for improvement.
• Cohort analysis can help you identify the impact of changes to your product or marketing campaigns.
• Cohort analysis should be used in conjunction with other metrics to get a comprehensive view of your business.
• You can use visualization tools to make cohort analysis easier and more accessible.
• Cohort analysis can help you identify patterns in customer behavior that you can use to improve your product.
• You should regularly update your cohorts as your business evolves to ensure they remain relevant.
• Cohort analysis can help you prioritize feature development based on the needs of different customer segments.

Use the pirate metrics — This framework includes five metrics: acquisition, activation, retention, revenue, and referral. By focusing on these metrics in order, you can build a roadmap for improving your product and growing your business.

• Acquisition refers to the number of new customers you acquire over a given time period.
• Activation refers to the percentage of customers who have completed an initial key action in your product.
• Retention refers to the percentage of customers who continue to use your product over time.
• Revenue refers to the amount of money you earn from each customer.
• Referral refers to the percentage of customers who refer new customers to your product.
• The pirate metrics provide a framework for measuring and improving different aspects of your business.
• You should prioritize each metric in order to ensure you’re focusing on the right areas of your business.
• The pirate metrics can help you identify areas where you need to improve in order to grow your business.
• You can use the pirate metrics to create a roadmap for improving your product and increasing revenue.
• The pirate metrics can help you identify which marketing channels are most effective at acquiring new customers.

Avoid vanity metrics — These are metrics that look impressive but don’t actually tell you anything meaningful about your business. Instead, focus on metrics that directly relate to your business goals and objectives.

• Vanity metrics are metrics that look impressive but don’t actually provide any meaningful insight into your business.
• Examples of vanity metrics include website traffic, social media followers, and page views.
• Vanity metrics can be misleading and give a false sense of progress.
• Instead of focusing on vanity metrics, you should focus on metrics that directly relate to your business goals and objectives.
• Metrics that relate to customer acquisition, retention, and revenue are typically more meaningful than vanity metrics.
• You should regularly review your metrics to ensure you’re focusing on the right areas of your business.
• Vanity metrics can distract from the more important metrics and lead to poor decision-making.
• Vanity metrics can be useful in certain contexts, such as when seeking funding or communicating progress to stakeholders.
• Focusing on vanity metrics can create a culture of surface-level success that doesn’t reflect the reality of your business.
• Avoiding vanity metrics can help you stay focused on what really matters for your business.
• It’s important to communicate the importance of meaningful metrics to your team and ensure everyone is aligned on what to measure.

Use qualitative data to complement quantitative data — Qualitative data, such as customer feedback and user research, can provide valuable insights that quantitative data alone cannot. By combining both types of data, you can gain a more comprehensive understanding of your customers and their needs.

• Qualitative data includes customer feedback, user research, and other non-numerical data.
• Qualitative data can provide valuable insights that quantitative data alone cannot.
• Qualitative data can help you understand the “why” behind customer behavior, whereas quantitative data can only show the “what”.
• Qualitative data can help you identify customer pain points and areas for improvement in your product.
• Qualitative data can help you identify new features or product ideas based on customer needs and desires.
• Qualitative data can be collected through surveys, interviews, user testing, and other methods.
• You should aim to collect qualitative data consistently over time to track changes in customer behavior and attitudes.
• Qualitative data should be used in conjunction with quantitative data to get a complete picture of your business.
• Qualitative data can be used to inform decisions about product design, user experience, and other aspects of your business.
• Qualitative data can help you prioritize features or improvements based on the needs of your customers.

Overall, “Lean Analytics” provides many valuable insights and strategies for building a data-driven approach to product development. By focusing on the right metrics and using data to inform decisions, new product teams can build better products faster and increase their chances of success.