Lean Analytics: Why the “One Metric” is more complicated than it sounds
Alistair Croll, co-author of Lean Analytics: Use Data to Build a Better Startup Faster, uses the above definition of analytics, and goes on to say that for startups in particular, the purpose of analytics is to “iterate to product/market fit before the money runs out.” But why just one metric? Benjamin Yoskovitz, the other co-author of Lean Analytics, explains it this way:
“At any point in time with your business, there’s one metric that you should really be focused on, and it’s the metric that everybody is trying to improve and is thinking about… Obviously, it’s not the only thing that you track, but it’s there to create focus. What are my number one problems, and what’s the metric that’s going to help me understand if I’m going in the right direction?”
How can you find your One Metric? First, you have to understand the criteria for a good one.
And by “good,” Croll and Yoskovitz mean a metric that is:
- Not so confusing that you have to explain it.
- A ratio or rate (think miles per gallon).
- Behavior changing (metrics don’t do any good unless they generate change).
Don’t forget—the SaaS metric you choose also has to measure movement towards a business goal, and to find the right goal for right now, you’ve got to look at your growth stage.