

Your Startup’s Most Important Metrics - lachyg
http://tomtunguz.com/your-startups-10-most-important-metrics/

======
JumpCrisscross
" _The TSM Average column is the Trailing Six Month Average. It is calculated
in this way:

    
    
        (ending_value/starting_value)^(1/num_periods-1)-1."

_

This is actually the formula for compound monthly growth rate, a modification
of the commonly used compound annual growth rate (CAGR), with an extra -1
thrown in after num_periods. The correct formula for compound growth is:

    
    
        (ending_value / starting_value) ^ (1 / num_periods) - 1
    

The T6m average is the arithmetic average of, surprise, the last six months:

    
    
        T6m(x) = 1/6 * sum(x[1], x[2],..., x[6])
    

where x is a vector of the last 6 months' data (sales, users, etc.). The T6m
average will be in the same unit as the monthly figures, not percentages.

~~~
ttunguz
Yes, you're right. Fixed this. I prefer the compound growth rate to the
rolling average.

------
gz5
One strategy:

1\. Examine your top (most engaged) x users each month

2\. Quantify turnover in that group

3\. Qualify which features/content they are using more/less than quantify
more/less

4\. Evaluate (3) against your business model - are your priorities focused
where your top users are focused and does your business model work if that is
where the focus remains?

\--

Can spin your own version of above but believe the key is to focus on your
most active, engaged cohort...the cohort that will ultimately sink or swim
your service. Other analysis can be valuable too but not if it distracts from
understanding your key user/customer.

~~~
dizzystar
This, I agree with. In general, very few companies make up a large percentage
of the profits, illustrated perfectly by the whale curve. It is quite shocking
to see that thing pop up when you run it across real data, but it shows you
instantly who to keep happy.

It's a terrible strategy to play Pokemon (gotta get 'em all) with your
business. No matter how hard you try, you simply cannot increase profits over
certain customers and you risk collapsing your profits if you place your
effort there.

------
pkrein
What we've found is that different analytics services help us answer different
kinds of questions.

For example, here are the tools we use to find each metric he mentions:

 _Distribution_

1\. New users by channel: Google Analytics Source breakdown satisfies what I
need to know here. If you want to look at conversion to a Goal broken down by
source, there's the "Goals" view in GA.

2\. Total users: easiest for us here is to just query our database.

3\. Cost of customer acquisition, lifetime value, pay back period: again
Google Analytics if you're doing adwords advertising.

 _Engagement_

1\. Active users: here a tool like KISSmetrics, Keen IO or Mixpanel will let
you see how many people are really succeeding in using your service.

2\. % of users using top 3 key features in a given month: same tools as active

 _Revenue_

1\. Revenue growth: Stripe or w/e your payments solution is.

2\. Conversion to paid: KISSmetrics and Mixpanel are the best tools to help
you measure conversion rates.

3\. Avg spend per paying customer: Stripe or w/e your payments solution is.

4\. Churn rate: Mixpanel probably does this best, but querying your database
might be a better option depending on how you measure churn.

5\. Burn rate: your bank account!

What we've found is that no single tool answers all these questions well. Most
companies we talk to use a mix of Google Analytics for basic stats and
distribution measurement. KISSmetrics, Mixpanel or Keen IO for engagement
metrics and tracking. Customer.io, Vero and Klaviyo for email marketing
analytics, etc. etc.

<shameless plug>

This is why we built <https://Segment.io>, so that we could easily send our
data wherever we wanted, and get the best analytics answers from many
different, complementary services.

</plug>

~~~
StavrosK
<shameless plug> That's why I came up with <http://www.instahero.com>, so
there _can be_ one tool to answer _every_ question well. </plug>

------
cadetzero
Is there a single analytics product on the market today that can give me this
solution?

Is there a product that's self-hosted?

If there is either, I haven't found them. I built these exact metrics in
house... such a pain.

~~~
mwetzler
Keen IO is an analytics backend as a service. We built it so that developers
wouldn't have to build in-house analytics infrastructure ever again. You can
use our SDKs to track any event in your mobile app, website, or backend, and
we expose powerful analytics features by API so you can do whatever you need
to do with your analytics data.

There's no easy drop-in solution that will give you all the answers for your
specific business, but we tried to make our platform extensible so that it can
be used answer any type of event-based analytics questions (like those
mentioned here).

