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Screwy Metrics

Screwy Metrics

by Annie Lai

Posted on 13 June 2016

January 16, 2013 by startupengineering .

Less like this

And more like this:

In retrospect, creating a company looks like instantiating an idea. So it’s easy and seductive to imagine that a “metrics based” approach to startups involves breaking the business down into components and measuring the creation of each component.

Unfortunately, though, you can’t build companies.in retrospect. Instead, you need to identify gaps (needs, holes, problems, etc.) in the existing economic and psychological world, and in the process, discover what your company needs to be to fit into those gaps. This has to happen simultaneously in lots of dimensions: the dimension of what you can provide, the dimension of how customers become aware of you, the dimensions of who you need to work with, what you need to outsource vs doing it yourself, how customers want to relate to you, etcetera. Each dimension impacts the others, so it’s common, for example, that a new thing you learn with respect to a way you have to be with a customer invalidates something you thought you knew about the way you could work with a partner.

As a consequence, metrics that track what you’ve built can lead you into a false sense of security. Because tomorrow, you may discover that that thing you built (a prototype, a relationship with one type of customer, a plugin for one platform) is no longer relevant to the business model that can work as a whole.

The trick is to track velocity of learning.