The puzzle of startup metrics
Einstein once said “Everything should be made as simple as possible, but not simpler”.
In a fast growing startup, sometimes measuring key metrics become bit confusing and daunting task. We either start measuring what seems to be easy to measure or spend too much efforts on measuring everything (after all if you can’t measure it, you can’t improve it). Many times measuring only what is easy to measure is simply not enough as it might hide the underneath business complexity.
If you are lucky, you figure out a North Star Metric (NSM), which is “single metric that best captures the core value that your product delivers to customers” (thanks Sean Ellis for this great definition). The good thing about a single, “simple to understand”, “all in one”, “the only thing that matters” NSM is — all stakeholders like its simplicity, even when they are not able to clearly understand what are their effective contributions in it. Sometimes, few teams do some magic tricks (like discounted sales in an e-commerce business) and hit the NSM in an unsustainable way. And then it becomes hard to maintain or repeat the metrics. While doing so, they steal a big pie of credits too from the other teams.
We, at RoadToNaukri.com, are also exploring our ideal NSM (yeah! It’s an exploratory journey until you hit a product-market fit), and we realized few limitations of single NSM approach. NSMs are so good to summarize everything in a company that when things are moving up, you may not feel a need to dig further and see what is happening at grass-root level. Sometimes, even if NSM is growing, your product-market fit and/or unit economics might be deteriorating. A simple, single NSM is not always enough to depict the complete picture of your company’s status.
So, what is the solution? Just like any Lean start-up we, at RoadToNaukri, too believe in the philosophy of “Build, Measure & Learn”. Start with measuring what seems to be crucial for business and with every iteration, keep looking for new parameters/factors. Always, remember that the metrics should be easy to calculate and explain to stakeholders. Having separate daily, weekly and monthly metrics and dashboards help too. That way the team can zoom in/out in all the aspects easily. One last thing — be responsive to your metrics. Not all remain meaningful and relevant after few iterations. And don’t stop yourself on just NSM.
“Not everything that counts can be counted, and not everything that can be counted counts” — Einstein
(Originally posted here - https://medium.com/@ankitwww/the-puzzle-of-startup-metrics-c87a9379d167)