This article was written by Tristan Handy.
This post is about how to create the analytics competency at your organization. It’s not about what metrics to track (there are plenty of good posts about that), it’s about how to actually get your business to produce them. As it turns out, the implementation question – How do I build a business that produces actionable data? – is much harder to answer.
And the answer is changing fast. The analytics ecosystem is moving very quickly, and the options you have at your disposal have changed significantly in the past 24 months. This post reflects recommendations and experience with the data technology of 2017.
This articles explains in details what to do, and what not to do, at various stages in a company lifecycle:
1. Founding Stage
(0 to 10 employees)
At this stage, you have no resources and no time. There are a million things you could be measuring, but you’re so close to the details of your business that you’re actually able to make fairly good instinctual decisions. The one thing you need to make sure you are measuring is your product, because it’s your product metrics that will help you iterate quickly in this critical phase. Everything else can take a back seat.
What to do
- Install Google Analytics on your website via Google Tag Manager. The data won’t be perfect without more work but it’s not the right time to worry about that.
- If you are an ecommerce business, you really need to make sure that your Google Analytics ecommerce data is good. GA can do a decent job of tracking your ecommerce business all the way from visitor to purchase, so spend the time to make sure it’s right.
- If you build software of any type, you need real event tracking. I don’t care what tool you use – Mixpanel and Heap are very similar and they’re both good. At this point I wouldn’t think too hard about what you’re tracking: just use Mixpanel’s autotrack or Heap’s default installation. If you realize you need a datapoint, you’ll find it’s already there. This approach does not scale well, but for now, it’ll do.
- Your financial reporting should be done in Quickbooks. Your forecasting should be done in Excel. If you’re a subscription business, use
Baremetrics for your subscription metrics. If you’re an ecommerce business, use your shopping cart platform to measure GMV. Don’t get fancy.
If you’re not technical, you may need an engineer to help out with GA and event tracking. This entire exercise shouldn’t take more than an hour or two, including reading the docs. It’s worth it to take the time out of building for this.
What not to do
Everything that is not one of the things above. Do not let someone sell you a data warehouse, a BI platform, a big consulting project, or…yeah, you get it. Stay focused. When you make a commitment to analytics, there is an ongoing cost. Data changes. Business logic changes. Once you start down this road, you can’t really put the project on pause. Wait to make this investment until later.
There will be many questions that you just can’t answer yet. That’s fine (for now).
To read the rest of the article, covering early stage company, mid-stage, and growth stage, click here.
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