It is common knowledge that the easiest way to tell if you are evolving is by a comparison of your previous status with your present status. For a startup, this is exactly what metric does. Metrics are parameters used to measure, compare or track the performance of a startup, or of how a startup compares with another. If this were an MBA class, metrics will simply be called KPIs (or key performance index); and like KPIs, metrics are used to evaluate factors that are important to the success of a startup.
The following metrics should matter to every startup:
1.Active vs registered users: Instead of worrying about how many people are registered on your website or app, you should be more concerned about how many of those registered users visit and stick around every day. This is arguably the most important metric every startup should be worried about. This should be the reason why founders wake up every morning, because a large number of registered users without daily activity is like a very big party where everyone is invited but no one shows up. When dealing with mobile apps, this metric is rephrased as “Number of installs vs Retention.”
2.Average return per user, ARPU: Your startup exists to solve a pain point in exchange for some sort of value or money. For this reason, ARPU is ‘unarguably’ the second most important metric for every startup; except if it is a charity or social enterprise. ARPU is calculated by dividing the total revenue by total number of users over a period of time. Whether your startup is premium or freemium model, ARPU matters.
3.Daily usage vs Session length: This metric measures how long an active user stays on your website or app. Be very careful with the latter as long session lengths could also mean very bad UX (user experience)design; what this means is that the user spends most of his/her time trying to find one thing. Except the app is built with a magic genie, that user may never come back unless the UX is made better. The expected result from this metric differs from one startup to another.
4.Load time: This one should be a no-brainer. Except your app is the ‘alpha and omega’ in that niche – which is very impossible (frankly) – you must find a way to load content or return results as fast as possible, or risk mass exodus of users in troves.
5.User experience: Actually, there’s no means of directly measuring this metric except through the overall combination of two or more other metrics. There are only 2 expected outcomes – (a) more users sticking around for good (retention), (b) or are they bouncing off?
6.Demography: Users are not bots or web crawlers; they are humans with a country and a language. When Facebook wanted to scale internationally, they didn’t translate the social network in Hindi; they probably thought it was not important. They later found out how wrong they were. Understanding this metric gives your startup a cultural dimension. It is the only metric that can help founders determine if their startup will become a global brand or not.
As simple as these parameters may seem, founders still have to move past metrics. UX is still king (if it solves a pain point for the users). Therefore use metrics to make informed decisions in your product and marketing strategy, that’s the only way it can be impactful beyond mere numbers.
Till next time!
Author:ChuQDennis
Image credit:videezy.com
