I read Lean Analytics over a year ago because this book was highly recommended by several growth hackers on the growthhacking.fr forum .
Whether you are an entrepreneur, marketer or growth hacker, I hope to convince you to get Lean Analytics thanks to this article. And that you will be able to put its teachings into practice as soon as possible
The Lean Analytics book is part of the Lean series
created by Eric Ries, the creator of the Lean Startup movement and author of the book of the same name. This movement aims to help entrepreneurs identify the riskiest parts of their business plan, then find ways to reduce risks through iterative learning methods (Build – Measure – Learn cycle). Lean Analytics belongs to this Lean Startup movement and helps entrepreneurs measure their progress and make the right decisions to advance their business. In this book, Alistair Croll and Benjamin Yoskovitz , co-founders of Year One Labs, a startup accelerator following the Lean methodology, share their experience and advice for developing a startup. They explain how to define the metrics to follow and optimize according to the development stage of a startup .
Lean Analytics Book
What is a good metric?
This is one of the first questions you have to ask yourself when you want to develop a business.
For Alistair Croll and Benjamin Yoskovitz, a good metric consists of 4 elements. Ithas an impact on your actions because its monitoring and analysis allow you to act directly on the management of the company
Beware of vanity metrics that may comfort you in your positions but do not help your startup progress!
The 5 stages of startup development
The authors also describe 5 stages of startup development. Each stage has a very specific objective. And, as we will see later, a specific metric to follow and optimize.
Stages of startup development
Empathy . At this stage, the goal is to determine a real problem to address.
Stickiness . The goal here is to find out how to effectively solve the problem in such a way that potential customers are willing to pay for a product/service.
Virality . Getting users to come back, keeping them engaged with the product/service and ultimately getting recommendations is the goal of this phase.
Revenue . The goal is to make the startup profitable and continue to grow.
Scale . The growth phase is when the company begins to expand, to enter new markets.
The one metric that matters
In its early stages, a company must be agile and have the ability to make decisions easily in order to progress. To do this, the authors of Lean Analytics suggest focusing on only one metric per stage of development. It makes sense to have only one goal in sight at a time, and makes decision-making easier. This is what they call ‘The One Metric that Matters’.
What metrics to track depending on the type of business?
The authors also list the main metrics to follow according to the types of business, from e-commerce to media, from marketplace to mobile application.
Here are some examples of metrics by business type (of course these can be adapted to specific companies):
E-commerce : purchases, cart additions, average cart, conversion rate (percentage of visitors who make a purchase), return on investment, revenue per customer, customer acquisition cost
SaaS : signups, signup rate, conversion, conversion rate, revenue per customer, customer acquisition cost, return on investment, virality, churn rate
Mobile App : Downloads, Launch Rate, Percentage of Active Users, Uninstall Rate
Two-sided market : growth in the number of buyers and sellers, conversion rate
Media : audience, engagement, ad inventory, ad click-through rates
UGC (User Generated Content): engagement rate, user content creation, virality, content sharing.
3 Takeaways from Lean Analytics
If we had to remember only 3 essential points from this book, they would be the following:
It is important to base yourself on previously defined indicators to evaluate the growth of your startup.
All startups go through 5 stages of development: empathy, stickiness, virality, revenue, scale.
At each of these phases the indicator monitored must be different and adapted.
Did this article pique your curiosity? Then read the book by Alistair Croll and Benjamin Yoskovitz as soon as possible I’m waiting for your opinion in the comments!
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