Analytics for Startups — Idea for change
Over the last few months I’ve noticed a trend on the web and in the startups that I’ve been a part of. It doesn’t matter how many new analytics platforms come out, every startup at some point still uses excel to parse compile their KPI’s.
This is probably the result of a couple of reasons.
- Data for KPI’s come from multiple different sources (KISS, Mixpanel, database, etc.)
- Providers don’t really supply dashboards that represent KPI’s. They represent funnels and conversion rates of certain actions, but KPI’s in my opinion are deeper.
It could be argued that this is because KPI’s differ from company to company. From what I’ve seen though they don’t, they differ from type of company to type of company. For example, most early stage SaaS companies will be tracking similar things: churn, acquisition, activation, engagements, active user base, etc.
With that being said, I think that instead of providing broad reach analytics platforms, there will be an emergence of platforms focused on specific business models (SaaS, two sided marketplaces, free mobile apps, etc). This will allow startups in particular get up and running extremely quickly and track what they need to at a moments notice.
I’m not here to say this would be easy, but rather would take some incredible innovation to build correctly.
Proposed Solution
I think that analytics providers are going to go more into the realm of focused business models rather than blanket solutions. For example, let’s take SaaS. If a SaaS business was to come and sign up for this imaginary analytics service, the first thing they would be walked through is how to setup their events such that they are immediately tracking the things that matter.
Having an opinion about how startups track their data allows dashboards to be created that exactly represent a company’s key metrics. We can then exclude all the excess tracking that most companies do. This allows them to focus on only the metrics that matter which is essentially the goal anyways.
Some might disagree and say that each startup has particular KPI’s that are very different from other startups. However, I would argue that although specifics of the KPI’s may differ from company to company, the fundamental concepts of reducing churn, acquisition cost and monitoring activation & engagement funnels are the same. Churn, Acquisition Cost, Activation Funnels and others are all essentially the same among SaaS startups. As a startup you want to focus on building the right product and not solving analytics problems.
Thank you to Eric Kryski for sharing his ideas on this article for me. Feel free to reach out to me on twitter.
