Lean Analytics: Use Data to Build a Better Startup Faster (Lean (O'Reilly))

by Alistair Croll

Instincts are experiments. Data is proof.

A good metric is comparative. Being able to compare a metric to other time periods, groups of users, or competitors helps you understand which way things are moving.

A good metric is understandable.

A good metric is a ratio or a rate.

A good metric changes the way you behave. This is by far the most important criterion for a metric: what will you do differently based on changes in the metric?

Drawing a line in the sand is a great way to enforce a disciplined approach.

longitudinal studies, since the data is collected along the natural lifespan of a customer group. By contrast, studies in which different groups of test subjects are given different experiences at the same time are called cross-sectional studies.

Math is good at optimizing a known system; humans are good at finding a new one. Put another way, change favors local maxima; innovation favors global disruption.

they aren’t building a product. They’re building a tool to learn what product to build

at any given time, there’s one metric you should care about above all else.

In the long term, the riskiest part of a business is often directly tied to how it makes money.

To decide which metrics you should track, you need to be able to describe your business model in no more complex a manner than a lemonade stand’s.

selling more stuff to more people more often for more money more efficiently.[

12 revenue models: advertising, consulting, data, lead generation, licensing fee, listing fee, ownership/hardware, rental, sponsorship, subscription, transaction fee, and virtual goods.

You also need to create a campaign contribution metric — basically, the added revenue from the campaign, minus the cost of the campaign and the loss due to unsubscribes.

The first step of a two-sided marketplace — and the first thing to measure — is your ability to create an inventory (supply) or an audience (demand).

Business plans are for bankers; business models are for founders.