“Make data-driven decisions“.
In practice, consciously making data-driven decisions is hard.
There’s an internal pull to trust your intuition. It’s so strong that we unintentially skew data to support our original gut feeling.
Trying to make data-driven decisions doesn’t work.
What can work, is hotwiring your intuition to be data-driven. It’s crazy, but it can work. And the way to do this is by being a metrics-driven startup.
What does this mean?
Obsessively track your metrics.
At Localize we invest a lot of time making our key metrics easily accessible to our team. We have 50 data points displayed by the day, week, and month.
Our team checks the company’s key metrics every day. And we get real time updates on our most important stats (when new users sign up for a subscription). Continually monitoring metrics completes a feedback loop that enables us to see how changing our marketing or product effects the preformance of our business.
Obsessively tracking your metrics builds a pattern-recognition process in your brain that’s always running. When you’re planning what to work on next, you already know what has worked in and what hasn’t, without pulling data.
Over time, you start making data-driven decisions intuitively. Without trying.
What’s the best way to create a metrics-obsessed culture?
Have a key metric that everyone follows
Your team should have ONE key metric. It’s the number that’s most important for the company’s growth.
It’s usually revenue or active users.
Everyone within your startup should know what your key metric is, and everyone should be able to see whether this number is growing or shrinking, and how fast.
Our #1 key metric at Localize is monthly recurring revenue. We track this metric on a rolling basis, which means adding up all recurring revenue that we’ve received in the past 30 days.
Have a weekly growth rate goal
It’s not enough to have a key metric. You must also track and monitor it constantly.
The best way to encourage this is to have a weekly growth goal. For us, it’s 10%. Everyone at our company knows our goal is to grow MRR by 10% every week, and we make it easy for our team to track whether we’re hitting that goal or not.
Having a weekly growth goal creates a structured way of reviewing metrics on an ongoing basis. Your team will naturally be motivated to check the metrics daily to see if the company is on track for the week.
Here’s a screenshot of one of our analytics pages as of mid-February 2015.