Answer: Only one.
One of the concepts we’re pushing hard in the Lean Analytics book is the One Metric That Matters (OMTM).
The idea is this: at any given time in your business there’s one key metric you should be focusing on. Not two, or three, or four. Just one. And that one metric becomes the driving force for what you do, experiments you run, and decision-making.
Picking the metric is hard. Drawing a line in the sand for your goals with the metric is even harder. But these are both important for achieving the levels of focus and speed required to succeed.
At GoInstant we’ve been very analytical. We measure lots of different things from overall usage to specific feature success, to performance and scalability. But none of these are the One Metric That Matters. We’re still working on how to define our OMTM but ultimately GoInstant will be a huge success when most of the Web is co-browsable “out-of-the-box.” That will mean more customers can get up and running with GoInstant more quickly. Everything we do has to make more of the Web and more of the elements of web sites and web applications co-browsable. It’s a huge challenge.
So GoInstant’s OMTM, which is still a work in progress, is essentially a percentage of the Web that is co-browsable. Measuring that is tricky. There are lots of variables. We clearly can’t test the entire Web. Nor is that really necessary. So we’re building systems and developing processes for testing a smaller but significant list of websites, and a large array of web elements (think: all different types of forms, form fields, types of code, popups, logins, interactive elements, and so on; basically the “building blocks” of the Web) as a proxy for “the entire Web.” We test on a continuous basis and will invest more than most companies on testing because of the challenges in building GoInstant’s technology.
What’s your OMTM?
Well that depends on a number of things. Check out a previous blog post (from Lean Analytics) for more info: http://leananalyticsbook.com/one-metric-that-matters/. While you’re there, please sign up for updates too.
In the meantime, here are some elements of the One Metric That Matters to keep in mind:
- It will change over time. The OMTM isn’t static. When you’re focused on acquiring users (and converting them into customers) your OMTM may be around which acquisition channels are working best or conversion rate from sign-up to active user. When you’re focused on retention, you may be looking at churn, and experimenting with pricing, features, improving customer support, and so forth.
- It answers the most important question you have. At any given time you’ll be trying to answer a hundred different questions and trying to juggle a million things. You need to identify the riskiest areas of your business as quickly as possible; that’s where the most important question lies. And the OMTM should be there to measure and answer that question.
- It has a clear goal. A metric without a goal is largely useless. You need to draw a line in the sand that helps you understand whether you’re achieving success or not. The One Metric That Matters needs a goal.
- It focuses the entire company. The OMTM should be front and center, physically visible for everyone to see all the time. Think about putting the OMTM on a giant TV screen in your office, or somewhere that people will look multiple times per day. The One Metric That Matters drives focus by being ever-present, and reminds everyone of its importance and the work that has to go into improving it.
- It inspires a culture of experimentation. Experimentation is key. Moving through the build->measure->learn cycle as quickly (and as often) as possible is key to generating and amassing enough learning that you can start executing effectively in the right directions. You want to inspire and instill a culture of experimentation throughout your organization — the One Metric That Matters can help.
Collecting lots of data in and of itself isn’t the problem. Most startups do that. Unfortunately that’s what they focus on –collecting lots of data– instead of figuring out what matters. When you fall too far into the numbers you actually lose focus on what’s important. Instead, pick a single number that matters above all others. Maybe you pick the wrong one, but at least you’re making a decision, which is better than dying from indecision.
The One Metric That Matters is both a concept and a tool for building an experimentation-first startup, focusing on measurable goals, improving clarity, and using analytics in the most effective way possible to achieve startup success.