Ben Yoskovitz knows startups. He started as an entrepreneur in the online space in 1996, and from there he launched and sold companies, became a VP of Product at VarageSale and GoInstant, and co-founded Year One Labs, a startup accelerator. He runs the startup co-creation company Highline Beta and co-authored Lean Analytics with Alistair Croll.
We asked Ben about how entrepreneurs can use analytics to build a better business and not get overwhelmed in the process.
On your blog, you’ve written that “data is about simplification and communication,” but many people find data complicated. How do you recommend entrepreneurs approach it?
Don’t overwhelm people with data. Find a few key metrics that matter (which help you as an individual or company make better decisions) and focus on those. Hide the complexity of all the tracking and analysis that you might do, and only use a few metrics to help people focus on what matters and how to move forward.
If you can get alignment on what problem is the most important right now — the one that requires attention and solving — then you should be able to identify the few metrics to track against that and simplify the whole process for people.
What does “discover qualitatively and prove quantitatively” look like in practice after a business has just launched? What are some of the best ways to collect user feedback?
The idea here is that you use your gut instinct along with qualitative input and feedback (particularly early on when most of what you’re doing is talking to users/customers) to identify areas of opportunity and things you could do or change. You then make those changes and measure the impact quantitatively.
Having said that, in Lean Analytics, we also say, “Quantitative tells you WHAT is happening. Qualitative tells you WHY.” So in that case, you may discover something happening quantitatively (e.g. tracking dropoff in a signup or onboarding flow), but unless you engage with users/customers going through that experience (by talking to them!), you won’t necessarily know why they’re dropping off.
Collecting user feedback can come from a variety of ways — use a tool like Intercom to capture people on your site or in your web application. Email people with short, simple surveys. Call people. Never stop talking to users and customers — that’s the key.
What are examples of vanity metrics that people spend too much time on?
I’m seeing fewer vanity metrics these days, which is a good thing, but they still surface on occasion for sure. Press mentions is a good example — although press can be helpful, unless it’s moving the needle and you can measure it (particularly early on), telling me you’ve been featured online somewhere is really not interesting.
There’s still a fair bit of vanity metrics in social — number of followers, number of likes, etc. Unless any of that is actionable in terms of driving the usage and engagement you need, it’s definitely vanity.
In contrast, what’s an example of what you call the One Metric That Matters?
The One Metric That Matters (OMTM) is the single metric that you’re focused on at any given point in time. It’s not quite as simple as saying, “All we need to focus on is one metric and that’s it,” but the intent is to encourage people to simplify the number of metrics they focus on, make sure they’re actionable, and make sure they’re focused on key problems and areas of interest they need to deal with.
For example, an early OMTM for a new company with a website (where you’re trying to drive signups) could be signup conversion, because if you can’t get anyone to sign up or get through the onboarding funnel (“activating”), nothing before or after that will really matter.
If your signup conversion is really low, pouring in more traffic won’t make sense, nor will worrying about the functionality of your product to drive long-term engagement, because you can’t get anyone in to begin with.
It’s really about knowing what matters — right now — to push your business or product forward.
What are your favorite tools for collecting and analyzing data?
I’m largely tool-agnostic. I’ve used Google Analytics, MixPanel, Heap, ChartMogul, and others. Early on I usually suggest that people just pick something and get going. Over time you’ll probably add custom metrics and queries of your data to get out specific things that you want. But early on, just start tracking things and see what happens.
You’ve talked about the importance of empathy in building a product or service. Why is it so important and how can entrepreneurs keep it top of mind?
If you can’t build empathy for users/customers, you can’t possibly solve their problems in a significant enough way to make a difference to them. Empathy is paramount to deeply understanding your users/customers and the problems they have. If you can get to that level of understanding, then you have a chance of building a meaningful enough solution.
Never stop talking to users/customers. Always dig in on not only their functional needs but their emotional and social needs as well. Put your users/customers at the center of everything you do, because it’ll improve the likelihood that you help them in a significant way and win.