Different metrics are needed, different metrics are important.

A couple of weeks ago, two interesting posts about startups metrics appeared on the blog of the Andreessen Horowitz venture fund. The first article was devoted to 16 metrics that each startup needs to measure. The second supplemented this list with 14 more metrics.



Each article was given a place of economic and product indicators, as well as the format of their presentation. Nevertheless, all of them were united by one thing - these are the metrics that are of interest to investors, who evaluate the potential possibilities of this or that product. And these indicators should give an understanding of where the product is moving at the present moment of time, and set the direction vector of development.







We list them briefly:

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Economic and business indicators

• Annual run rate
• ARPU
• Gross profit
• LTV
• CAC

Product and engagement indicators

• Active users
• Outflow
• NPS
• Registered Users
• Number of downloads

A cohort analysis and some interesting diagrams were mentioned among the presentation and assessment formats.







Our training , which is conducted by Daria Ryzhkov, is also devoted primarily to those grocery metrics that help move on. That's why we asked Daria what she thinks about those indicators that were mentioned by a16z for the first and second times - about the difference between them.

This is probably one of the most comprehensive and useful reviews of business indicators that I have met recently. Unfortunately, very often business indicators (such as average revenue per month or number of users per month) become product indicators. What is absolutely logical from the point of view of business, but absolutely useless for the product - they will not give you an idea of ​​where to go next.



Many of the product metrics that are mentioned in the article certainly require the attention of the product manager, but most of them are business indicators. Their values ​​can be influenced without changing the product itself, but by adjusting the pricing policy, conducting advertising campaigns or buying traffic properly. They can simply grow themselves up over time. And here you have to be very careful, because when such KPI business becomes grocery metrics, we fall into the trap of our own expectations and take our vanity, looking at the graphs growing upwards.

These metrics include:

1. Number of users. The metric does not give any idea what happened to the product today and how good or bad it is, that 100 people came to us today. Of course, coverage is important, but without segmentation and analysis of the behavior of this audience, it does not tell us absolutely nothing.
2. Revenue. Most often it becomes a product metric, although we can achieve revenue growth without changing the product at all, for example, by regulating price policy, conducting advertising campaigns, etc.
3. Number of downloads. Of course, downloads have some impact on our position in mobile app stores. But from the point of view of analyzing user behavior, it is better to try to see conversions that show the involvement of users who have loaded the application into your product.
4. Session time It is very difficult to estimate this value qualitatively without analyzing the actions of the audience. For example, it may seem to us that if the session time has increased from 1 minute to 5, then this is good. But what if it turns out that 4 of these 5 minutes the user writes an appeal to support in the form of feedback?
5. Like / Share and other social activity. Until you understand how much you spend on each Like / Share and how much you earn on each Like / Share, these values ​​will not tell you anything at all.

Is it possible to somehow understand which metrics will be useful?



The main thing to remember is that a good metric is always a relative, not an absolute value. The relative values ​​firstly make it possible to understand how you can influence the change in the value of the indicator. Secondly, they are comparable in nature, and you can always evaluate the value of the indicator with the same for previous periods of time or with your competitors. In this regard, conversions at each step of the sales funnel can be a good example of such relative values.



Do not forget that the audience should be segmented and see how its behavior changes over time. Many large projects with thousands and thousands of people, in my opinion, make the mistake of not using the segmentation and cohort analysis tools. For example, if you look at the same outflow (the proportion of users who no longer use the product) by cohorts in the context of various segments, you can find a huge amount of insights. You need to very clearly understand for whom you make your product and how it is perceived by your users. Knowing their needs, expectations and perception of your product, it becomes much easier to choose further steps.

Learn more about metrics and concentrate on those that really help your product grow!