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Data. Analytics. They can be intimidating words, even overwhelming when you don’t understand them. But data and analytics are essential to understanding how to build your business, in the most efficient and effective way possible.
“If you're not making decisions based on data,” says Charlotte Hamilton-Warr, a Product Manager on the Thin Air Labs Product Traction team, “you’re making decisions based on assumptions.”
And once you start measuring the right things, and getting insight from those measurements, it’s really exciting. Lightbulbs start going off. Understanding data and analytics help you make informed decisions about what you need to do next and gives you confidence in your decision making. It also ensures you are spending your limited resources on the right things.
"If you're not making decisions based on data, you’re making decisions based on assumptions.” ---Charlotte-Hamilton-Warr, Product Manager
So what do data and analytics actually refer to?
“Data is all the information you’re collecting across all the touchpoints your customer is having with your platform,” Charlotte explains. “Analytics is simply the activity of analyzing that data to make conclusions or bolster thinking you have about your business.”
As you get clearer on the outcomes you're working toward, you'll have a better sense of what kind of information might be useful for the growth of your startup. Two key focus areas that are important early on and throughout the life of your venture are Marketing and Product analytics.
Marketing analytics help improve your customer acquisition. These insights will help you evaluate the success of marketing activities, channels and campaigns and will also help you understand if you are attracting the right people to sign up for your product.
Product analytics help improve your customer experience. These insights help you understand how people use your product, making sure they get value from it and keep coming back for more. Product analytics can also help you evaluate the success of any customer experience changes you make.
There’s a good chance you’re already using Google Analytics to help you understand the success of your marketing efforts, your most valuable channels and demographic information about visitors to your website.
But an all too common problem is understanding what behaviours happen once a customer signs up. This is a problem Product analytics can solve.
For example, “during your sign up process you ask users to complete a certain number of steps in a certain order, and you see that a percentage of users are always failing at step number three,” says Charlotte. “So you might think okay, let’s spend a lot of money, throw a lot of product people at this problem and fix it. But, if you break down the data to understand which users are failing, you might find that it’s actually just the free users of your platform and not the high value customers. Therefore, not the customers you want to invest in at this stage of your MVP development. So you can take that money you were going to spend on fixing the problem and employ it elsewhere to further your business at this stage.”
“Making sure that you’re spending your money the right way, that you’re attracting the right customers, that they’re taking the right actions, making sure that your marketing spend is working for you, making sure that you are pointing your people or your contractors in the right direction, is the most effective way for startups to use this information." --- Charlotte Hamilton-Warr, Product Manager
So don’t be overwhelmed by the idea that you have to track everything, focus instead on making sure you have the tools you need to analyze the problems that pose the biggest risks to your startup’s growth.
“Making sure that you’re spending your money the right way, that you’re attracting the right customers, that they’re taking the right actions, making sure that your marketing spend is working for you, making sure that you are pointing your people or your contractors in the right direction,” says Charlotte, "is the most effective way for startups to use this information."
If you’re worried you don’t have anyone on your team that can tackle data and analytics, Charlotte says there are a lot of free resources online to help you get started. And if you want to go deeper, get help with implementation and ensure you’re tracking the right things, the Thin Air Product Traction team can also help.
For website and marketing analytics, “You can honestly just google the questions you have, especially if you’re setting up something like Google Analytics, you’ll find blogs that will walk you through much of that,” says Charlotte.
For product analytics, Charlotte and the Product Traction team recommend a tool like Mixpanel.
“For understanding what your users are doing in your app and why, we often recommend a tool like Mixpanel. There are others, but we like Mixpanel because relative to other software, it’s user comprehensive, easy to work with, and has a free tier. Then as your product grows, you’ll eventually move into a paid version. It’s great for startups.”
And there’s no time like the present to get started.
“There’s no right time to start caring about data and analytics, but I do believe it’s better to do so earlier. That said, better late than never also works!” says Charlotte.
Understanding the insights from all this data simply means you’ll be able to #BuildWhatsNext with more confidence, knowing that your decisions are based on facts, not assumptions.
