What’s the best way to measure your company?

Paul Graham (Co-Founder & Partner at Y Combinator)
Do Things that Don’t Scale

If there’s one number every founder should always know, it’s the company’s growth rate. That’s the measure of a startup. If you don’t know that number, you don’t even know if you’re doing well or badly. The best thing to measure the growth rate of is revenue. The next best, for startups that aren’t charging initially, is active users.

What’s the best way to measure your company?

Eric Ries (Author, The Lean Startup)
The Lean Startup: How Today’s Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses

If you are building the wrong thing, optimizing the product or its marketing will not yield significant results. A startup has to measure progress against a high bar: evidence that a sustainable business can be built around its products or services. That’s a standard that can be assessed only if a startup has made clear, tangible predictions ahead of time. In the absence of those predictions, product and strategy decisions are far more difficult … (read more)

What’s the best way to measure your company?

Eric Ries (Author, The Lean Startup)
The Lean Startup: How Today’s Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses

…three A’s of metrics: actionable, accessible, and auditable. Actionable metrics …When cause and effect is clearly understood, people are better able to learn from their actions. [Accessible]…make the reports as simple as possible so that everyone understands them.

What’s the best way to measure your company?

Seth Godin (Founder at Yoyodyne Entertainment)
Seth’s Blog: On average, averages are stupid

On average, averages are stupid. “Across our 100 locations, sales on average are up 3% last month.” This tells you exactly nothing. It turns out that ten of the outlets each saw their sales double, while most of the other ones are stagnating or even decreasing in sales. That’s the insight. Averages almost always hide insights instead of exposing them. If the problem is interesting enough to talk about, it’s interesting enough to show the true gro… (read more)

What’s the best way to measure product usage?

Paul Graham (Co-Founder & Partner at Y Combinator)
Startup = Growth

A good growth rate during [Y Combinator] is 5-7% a week. If you can hit 10% a week you’re doing exceptionally well. If you can only manage 1%, it’s a sign you haven’t yet figured out what you’re doing. We usually advise startups to pick a growth rate they think they can hit, and then just try to hit it every week.

What’s the best way to measure product usage?

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
Social Commerce Is Commerce With A Social Layer – AVC

Conversion rates are critical. They tell you what systems perform best for the end user. When a system converts north of 5% of users visits to a transaction, it is working extremely well for the end user. When a system converts 0.1% of user visits to a transaction, it doesn’t work as well for the end user.

What’s the best way to measure product usage?

Donald T. Campbell (American social scientist)
There’s a Name for the Big Flaw in Our Obsession With Assessment and Metrics

The more a given metric—say, a national college ranking—is used to evaluate performance in some domain, the less reliable it becomes as a measure of overall success. Why? The people whose performance is being measured will neglect other parts of their job just to focus on boosting the relevant numbers, sometimes to the point of cheating.

What’s the best way to measure product usage?

Anamitra Banerji (Partner @ Foundation Capital)
The Shape Of The Curve — Medium

Most consumer software products have a DAU:MAU of 20% or lower. Zero products get to 100% but some rare ones come close to this ceiling (like Facebook 65% and Whatsapp 72%) [i.e. you should be getting better than 20% DAU:MAU]

What’s the best way to measure product usage?

Josh Elman (Partner at Greylock Partners)
The only metric that matters — Medium

I always ask the same question: How many people are really using your product? You need a metric that specifically answers this. It can be “x people did 3 searches in the past week”. Or “y people visited my site 9 times in the past month”. Or “z people made at least one purchase in the last 90 days. ” But whatever it is, it should be a signal that they are using their product in the way you expected and that they use it enough so that you believe… (read more)