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I recently read a top marketeer write on LinkedIn: "Only a few core metrics matter. Others are a distraction" - written in quotes, but a paraphrased version of what he said. He was talking about marketing in specific, but went on to state that "Traffic. Trials. Revenue" are the only core metrics that matter.
I find such statements gross generalizations and hence, quite misleading. I think metrics, like many other things in a startup, are important and need to be applied in context. Even 'Revenue' can be the wrong metric to track in a certain context, while something as simple as 'number of calls made' can be a better metric. But then again, this is just one opinion vs. another.
Well, as is usually the case, I will share my experiences to back my thought process. I will quote one example each for the good, bad, and the ugly application of metrics. So that this post has an increasingly positive flow, I shall start with the failure story first :P (also because it is the easiest for me to choose from my wide repertoire of failures).
It was the very early days of Flexiple. We had not made a single sale. We were still trying to figure out our messaging and pitch to customers. But as typical boneheaded MBA grads, we had the superpower of a spreadsheet and whipped it open. We decided that revenue was the most important metric - we would track it and also project it for the next 10 months so that we could accordingly make our "investment decisions".
Now, let me get this out of the way - I totally believe in bootstrapped growth. So, I understand the importance of revenue growth and also the need to keep a close eye on it to be financially responsible. But how do you track revenue when you don't even know how or what to talk to customers?
Of course, we missed every single projection and also the revised projections. It took us some time to realize that we needed to have process metrics first - number of companies we reached out to, number of customer calls we made, number of active conversations with customers, etc. These are all drivers of revenue and are effort metrics. In the early stage of any initiative (not just a startup), effort metrics matter more than output metrics, as the latter is just unmeasurable yet.
We figured that we write decent content but really suck at distributing it. To address this, we made a list of channels to distribute our content - HackerNews, Indiehackers, Reddit, etc. This story is about Reddit - it has always been a bit tricky for businesses, but we had heard such good things that we wanted to give it a try.
Reddit, of course, is very hateful to promotion of any kind. That's why we put almost our entire article content in the Reddit post and only mentioned the original article link at the end. Many of our posts did "very well" - they received a ton of upvotes and a lot of comments. Honestly, I gave myself many gold stars for such great engagement on my content.
But wait, engagement for whom? I was just helping Reddit with better engagement on its platform. What was I gaining? Paltry subscribers, negligible traffic to my website and customers - well, forget customers. Here I was counting the upvotes week after week, while receiving zero benefits of the "great performance".
Tracking intermediate metrics makes sense only when they contribute to the long-term goal of your initiative. Else, it is just a handkerchief on a sad entrepreneurial night.
In my other startup, Remote Tools, we have a newsletter. The obvious metrics to track in a newsletter are the number of subscribers, open rates, unsubscribe rate, and also number of replies. We had a brief period of time when our open rates fell. This was an important indicator of the newsletter's health. So, we spent time to investigate the problem and also its solutions. It turned out to be a problem in mail deliverability, which we then addressed.
Being a discovery platform for remote tools, we also tracked the number of new tools being posted on the platform each week. To help with this, we figured the best channels to reach out to product makers and also set up a process for it.
The ultimate goal of remote tools was to build a community for remote workers. A strong newsletter and a loving audience were important for that. So when we did launch our community, our newsletter delivered our first 200 users and also the traffic to the website. Further, new product makers continue to drive subscribers to our website and are among the most engaging audience in our community.
Measuring traffic to an unborn website would have been a bit difficult, I think.
The idea is to not get enamored by any of these metrics. At the same time, all metrics matter - in the right context. So a one-size-fits-all talk of only x, y and z metrics matter, seems a bit far fetched to me.
Do you agree with me? I would love to hear from you!