The only metrics that entrepreneurs should invest energy in collecting are those that help them make decisions. Unfortunately, the majority of data available in off-the-shelf analytics packages are what I call Vanity Metrics. They might make you feel good, but they don’t offer clear guidance for what to do. — Eric Riess
There are a lot of great tools at your disposal to help with gathering data. They will get you all the dashboard metrics you need. But they can’t generate insights — the data that actually measures whether you are delivering on your strategy.
Just because you aren't at the stage in your startup's growth to have a full time data team, that doesn't mean you should be feeling around in the dark. Consult with an expert to find out what type of solution will work for your business. It's easier than ever to start collecting meaningful analytics.
You’ll find vanity metrics on a dashboard with fancy widgets and meaningless visualizations on a giant TV. You’ll see a big, disembodied number, or a fuel gauge in the red line, or a world map with different shades. What you won’t see are any insights from those numbers. What does that number mean week over week? What can you do about California being dark blue, and Nebraska, light?
Insights are the pieces of honest, contextualized data. The data full of meaning which enables you to generate action and improve. The knowledge within the gaps in the data. In order to be useful, insights must be honest about your areas for improvement as well as your successes, such as:
These are things that don’t fit into a flash dashboard. Yet these are the insights which will drive your business forward.
Any product has a series of goals they want to convert on: signup, first feature use, purchase, social referral, repeat use. What are the pathways to these successful conversions? Measure them, and know where the major dropoff points are. Then you can start asking the question of WHY.
Bridging the Product-Data gap