How Analytics Can Help a Startup at Every Stage of Its Life

By Sreeram Sreenivasan

Getting a startup off the ground is extremely hard. Every Startup tries out various efforts to improve their product or service, attract more customers and grow revenues as much as possible, as soon as possible. However, without measurable & immediate feedback, it becomes difficult to know what is working well and what needs to be fixed, how to grow your business. Here’s how data analytics can help a startup at each stage of its life – to gain insights and grow faster.

Seed/Initial Stage

In the initial stage, your startup is in the discovery mode. You have certain business goals but you also need to explore things a bit – different tyes of target customers, various marketing channels, different types of messaging, etc. You are still trying to figure out the product-market fit. At this stage, analytics can benefit your startup in 2 ways:

1. Analytics can help you measure your performance against your goals. For example, if your goal is to increase the awareness about your new product or service, you can track metrics such as Visits, Unique number of visitors, engagement of visitors and final conversion. This kind of immediate & measurable feedback enables you to quickly adjust your activities to improve performance faster. It will ensure that you are on track to achieve your business goals.
2. Secondly, analytics can be used to measure the outcomes of your various experiments that you use to explore various target markets, marketing channels and campaigns to reach your customers. For example, Analytics can enable you to track and measure marketing performance across all your marketing channels like SEO, Email, Social Media, and help you tie each channel’s contribution to your goals so you can stop focusing on non-responsive channels and plug the budget leaks.

Startups make a couple of common mistakes at this stage:

1. Not defining specific & goals – It is difficult to clearly define goals for an early stage startup, as so many business aspects are in flux. However, you still need to define business goals. They can change based on circumstances, but not having them makes it difficult to determine if you are going in the right direction, or doing the right thing.
2. Tracking vanity metrics – Vanity metrics are numbers & trends that may make you feel good about your business but don’t provide any actionable insight. If you don’t know what you need to do when a number goes up, down or stays the same, then it’s a vanity metric and should be avoided. For example, number of visits alone as a metric is not really useful unless you look at unique visitors, their engagement and sales.

Growth Stage

At this stage, analytics can become fun and truly drive your business strategy. You’ll have enough data to test out different hypotheses about variations in UI, workflows, customer journeys and features. Agility is the key here – you are limited only by your imagination. You can design, test, analyze & implement your ideas quickly to see what’s working and what isn’t.

If you feel that there are too many changes going on with your business to do any meaningful analytics, then you should perform one test at a time.  No matter how many aspects of your business change, you can (randomly) divide customers in two groups and A/B test your idea. This will help you identify which changes are well-received and which customer segments are the most responsive.

At this stage, some of the most common answers you can find using analytics are:

1. Which features of your product or service are used the most by customers?
2. How frequently do they use these features and for how long?
3. What is the demographic of your target market – their geography, profile, etc?
4. Who are the loyal customers of your business? How can you get more of them?

Matured Stage

At this stage, you would already have the basic data analytics setup for your business and you can leverage it in a couple of ways:

1. Use analytics to pull data from multiple business areas/data sources, blend them to gain advanced insights. For example, you can combine the marketing data about various campaigns and channels with sales data to analyze which marketing channels give you the best return on investment (ROI). You can even combine it with customer demographic information to find out how each customer segment responds to every marketing campaign.
2. Create in-depth data analytics experiments – You can create channel specific marketing analytics to get in-depth information about a particular channel such as social media or SEO, monitor the performance of each marketing campaign, compare the results with historical performance and enable your team to quickly spot new trends.

Analytics can empower a startup to measure the impact of its efforts, monitor its business performance and achieve its business goals. By providing immediate feedback, it can enable startups to explore new growth opportunities, spot risks up front, and respond quickly.

About the Author

Sreeram Sreenivasan is the Founder of Ubiq, a web-based Business Intelligence & Reporting Application. Before Ubiq, he has helped Fortune 500 companies in various Consulting & Data Analysis projects.