500 Startups Growth Handbook

Metrics 101

What to track?

To avoid being overwhelmed by what to measure and track, or to avoid being overcome by the desire to track everything (if you’re an engineer), here’s a good place to start

Start with top level KPI & the drivers for the top level KPI (you learnt about it in growth goals)
Funnel for these drivers
CAC, LTV

In the beginning, you will track these as aggregates (again, start simple). But as you work on more nuanced optimizations, you'll branch into tracking the same metrics above for various segments of users. Some of these segments could be based on source/referrer, ad campaigns, landing page (users who arrived at your product app for different purposes will behave differently), sign up time (if you'd made product changes, different cohorts would've experienced your product differently, and hence might exhibit different behaviour), A/B test buckets (ex: if two sets of users had vastly different onboarding experience, their retention might be different)

Here’s the video that explains what metrics to track (slides) along with a handy dashboard (bit.ly/kpi-sheet) that helps you see the most important components of your business in a single sheet (one view). And here’s how to get the data (slides) using various analytics tools like Mixpanel and Amplitude

Common Mistakes Founders Make

Tracking too many things (especially, if you’re an engineering team) overwhelming yourself with tracking - making it a priority - becoming data driven instead of being data informed in early stages when you don't have enough data - - analysis paralysis
Spending unnecessary money on advanced analytics tools that don’t matter as this stage
Tracking vanity metrics

Fictitious Example

A couple of sample KPI dashboards bit.ly/kpi-example-1 & bit.ly/kpi-example-2

Related Keywords

Key Performance Indicator, Vanity Metrics, Monthly Recurring Revenue (MRR),Annual Recurring Revenue (ARR), Lifetime Value(LTV), Month over month growth (MoM growth), churn, OMTM, Customer Acquisition Cost (CAC), Mixpanel, Kissmetrics