Metrics that matter when you're building software from scratch

Product managers rely on data to drive decisions. So what to do when launching a new product where there is no data history? Even knowing what and how to measure success is taking a shot in the dark. With few users and constantly changing priorities, building data infrastructures from the ground up might be the greatest challenge of product launch.

It's a product manager's job to set the metrics, decide how and when to measure success, and to test and optimize those data structures.

Set metrics during development

Long before users start engaging with the platform your team should know what it's measuring and why. Since data collected from your MVP will likely be used for fundraising, sales and marketing insights, UX understanding and product development, you'll need to spend dedicated time with the business, marketing and development team setting priorities and understanding how each metric will be used over the lifecycle of the product.

Focusing on 2-3 metrics that serve multiple business uses can be ideal. Don't track more than is necessary, instead try to focus on the few metrics that matter most in the first months of MVP development.

Don't trust launch metrics

The first few weeks of a new product launch can be deceiving. Your PR and marketing team are working overtime, extra dollars are being poured into SEO, and your product may be on sale to drive attention. So don't jump to any radical conclusions about the initial success of your product. Before you launch, determine the most valuable 2 metrics that will inform you the most and what those metrics mean post-launch.

Avoid tracking vanity metrics like page views and likes. These may provide instant gratification for an early product team, but the superficial metrics can cause you to look past more important success indicators.

Track metrics that matter

Your product's key stakeholders will help you set the right metrics for tracking a new product's growth. Gather information from each department lead from leadership, business, design, marketing and engineering. The list of metrics will be incredibly long and you can't track everything, so it's your job to identify patterns, set priorities and sideline the metrics that can wait.

Some of the metrics we recommend prioritizing early in the process help tell us more about the user and their experience:  

• Product usage/adoption
  • sign-in frequency
  • shares
• Actions that matter (track users who take valuable actions)
• Feature usage
  • feature vs feature
  • by customer type
• Retention or churn rate
• Onramp (How people find your product)
• Exit point (How/when people leave)

As the platform matures and users become more loyal, you can focus on metrics that track their relationship to the product over time:

• Customer Acquisition Cost (CAC)
• Lifetime Value of a Customer (LTV)
• Monthly Recurring Revenue (MRR)
• Annual Recurring Revenue (ARR)
• Average Revenue per User (ARU)
• Conversion (e.g. site visit to lead conversion)

Question everything

The metrics that are most useful in the first few months of product launch will not be the most useful as it matures and grows. It is important to build in data/metric reviews every few sprints to question whether you are understanding the product through the data you're collecting, or whether you are simply watching charts go up and down. Go back and review the business needs of each department.

As you review your metrics/data collection methodologies, be sure to ask these key questions:

• Do these metrics tell us something?
• What are we missing?
• Which stakeholders are struggling to understand their goals?

Set your tech up for flexible data collection

The importance of incorporating data collection tools into early product development doesn't show it's true benefits until post-launch. Work with the technical team early and often to ensure the platform is set up to capture data easily without disrupting their development cycle. Having the right tracking tools in place within the product will make it easier to engage these metrics when they become important.

As the platform matures and users become more loyal, you will want to focus on metrics that track their relationship to the product over time:

• Customer Acquisition Cost (CAC)
• Lifetime Value of a Customer (LTV)
• Monthly Recurring Revenue (MRR)
• Annual Recurring Revenue (ARR)
• Average Revenue per User (ARU)
• Conversion (e.g. site visit to lead conversion)

If your team is building a new product and interested in learning more about how to collect data and which metrics matter most for your unique platform, get in touch with us at Big Room Studios. Our strategists and developers work with new startups and large enterprise teams and can give you the information and support you need to build a better product.