Lean Analytics: Use Data to Build a Better Startup Faster

The reason Google has a free analytics product is because the company makes money from relevant advertising, and wants to make it as easy as possible for you to buy ads and measure their effectiveness.

Long-term, you can always buy supply, but you can’t buy demand.

The team at Startup Compass, a startup dedicated to helping companies make better business decisions with data, identifies 12 revenue models: advertising, consulting, data, lead generation, licensing fee, listing fee, ownership/hardware, rental, sponsorship, subscription, transaction fee, and virtual goods.

You can build business models this way, but instead of heads, torsos, and feet, you have several aspects of a business: the acquisition channel, selling tactic, revenue source, product type, and delivery model.

One thing we’ve noticed about almost all successful founders we’ve met is their ability to work at both a very detailed, and a very abstracted, level within their business.

There’s no more iconic symbol of a startup than the lemonade stand, and with good reason—it’s a simple, entrepreneurial, low-risk way to learn how businesses operate.

Focus doesn’t mean myopia.

One other thing you’ll notice about metrics is that they often come in pairs.

Backupify was good at focusing on a specific metric at a specific stage, in order to grow the company. “Initially, we focused on site visitors, because we just wanted to get people to our site,” said CEO and co-founder Robert May. “Then we focused on trials, because we needed people testing out our product.”
Once Backupify had people trialing the product in sufficient numbers, Robert focused on signups (conversions from free trial to paying customer). Now, the primary focus is monthly recurring revenue (MRR).

overcame the chicken-and-egg issue by having content in place at the start.