We know that entrepreneurship is not easy and requires much more than opening a business. An entrepreneur's journey is very challenging, especially if you choose to open a startup, where your business model must be scalable and sustainable. To accompany development and growth, we need some parameters to support our decisions. Many startups have doubts about how to follow their business and interpret it in a coherent way. So, today we came to answer: What metrics should I analyze at my startup?
How should I start?
The first thing that we must keep in mind is that metrics need to be controllable and actionable. Analyzing metrics without actions does not make sense, it is not effective. Metrics should always serve as a parameter for you to be able to make decisions on them. That simple.
So, do I need to have a dashboard full of metrics? The answer is no. Before filling a spreadsheet with dozens of numbers, first, we need to understand which ones are really necessary for your business model. And as necessary, we mean numbers that will directly impact the business and its direction in the market.
We like to analyze these numbers in a very practical way. When an entrepreneur introduces us to his startup, and therefore his metrics, they alone should tell us a story. Analyzing some of them, we can already understand how it works, and what is the profile of the partners according to the actions they take. It's like a great narrative.
How do I define a primary metric for my company?
A term widely used in Growth Hacking is "North Star Metric", meaning the central metric of your business. This indicator is very important, as it is he who will show you how you are generating value for your customer. A very practical example that we can use, is the case of Uber. For him, the central metric of the business, which should be analyzed more carefully (and carefully) is the number of races completed.
From your central metric, it is easier to establish which others will complement your analysis. Thus, you can create scenarios and hypotheses and see where they correlate, as well as the level of interdependence between them. It is important to analyze what makes sense for your business. It is not because a company uses a certain metric, that yours should also use it. We must always look at each case individually.
Are you curious to know more? Just listen to the full debate on the topic on our podcast. Press play!