Reid Hoffman talks about LinkedIn’s startup story on CNN. It’s a very interesting story about a successful entrepreneur becomes a serial entrepreneur by focusing on both a vision and a set of success metrics.
We had this initial challenge of, "How do you get a million people?" The first challenge was getting enough people so that functions like searching for people or sharing information had enough people in it to be valuable. The year 2003 was all about tuning and viral growth.
I’m a huge believer in getting a million people, getting them engaged, and then building a business model on top of that.
Why does a million people matter? Is this a good metric for other startups? How will know if you are successful? This requires having both a set of measures and a set of goals.
AARRR! Be Bold. Be Humble.
What should you be measuring? The good news is that others have done a lot of the heavy lifting. Dave McClure has a great presentation on Startup Metrics for Pirates. The
Dave has a quick 5 point plan for understanding how to frame a startup, the business model and the performance of both the marketing and product development efforts.
- Passion for problem/solution + Hypothesis of Customer Lifecycle
- 1 page Business Model: Prioritized List of (Users + Conversions + Priorities)
- Critical, Few, Actionable Metrics + Dashboard of Measured User Behaviour
- 1 page Marketing Plan: (Channels + Campaigns) * (Volume, Cost, Conversion %)
- Velocity of (Product Execution + Cycle Time of Testing) * Iteration
This shouldn’t feel like rock science. It’s a way to frame the problems that all startups should be used to answering. What problem do you solve? What is life cycle of your customers? Who are your customers and how are you acquiring them? How do you reach your customers? How do you know if your development process is healthy? How will you know if you’ve been successful? It’s not rocket science.
Startup Metrics provide the baseline set of things a startup should be measuring. You should be building the data collection into your application, and he suggests you should “delegate each metric to someone to own”. This is the what, but it’s missing the Big Hairy Audacious Goal. The metrics are the starting point for measurement, and not they are not the target for an organization.
What is your “million users” goal?