Analytics For Startups: 6 Steps To A Successful Strategy
Posted On 24/10/2019
For startups, it’s common sense to rely on data & analytics to make decisions. Probably, you’re already tracking a number of metrics like your ARR, or some usage statistics.
As there are countless guides on which metrics to track as a startup, we wanted to approach this article from a different angle. That is, you have your internal reporting in place, but how are you handling reporting & analytics inside your product?
In other words, how can startups make analytics a successful part of their application or platform? In this post, we’ll prepare you for a smooth & fast implementation in 6 steps!
1. How to put analytics on your startup’s roadmap
As an early-stage startup, one of the most common challenges is finding product-market fit. In order to grow your product in the right direction, you’ll need a lot of feedback from the market, your clients, investors, and so on.
However, the hardest part is to transform all that feedback into a solid product roadmap. Which features get high priority? And how does analytics fit into that roadmap for startups?
Having reporting & analytics inside the applications of startups is actually one of the most requested features by customers. In fact, 67% of SaaS users report that they lose at least 1 or 2 hours time, switching between platforms to do their reporting.
So, keeping analytics off your roadmap would be a risky move. But at the same time, building your own analytics requires very specific knowledge. Therefore, it’s important to decide in time whether you’ll develop it yourself, or rely on existing building blocks to get up & running faster.
Many startups make the mistake to dedicate a full-time developer to analytics too early in the growth process, which results in a lack of focus on your core application.
To speed up analytics development on their roadmap, clever startups rely on embedded analytics. This means you can buy a third-party tool to add a reporting layer to your platform. Typically, you’ll create dashboards & fully integrate them into your product in just a couple of days.
In that way, you can dedicate full employee resources to your core application, without losing out on value-adding reporting.
2. Understand the data inside your product
When you’ve put analytics on your startup’s roadmap, it’s time to create a plan to execute it. There will be a number of steps in that process, but the first thing to do is to have a look at your product data.
The best way to start is to map all the data sources you have. Two questions are important there:
Which usage statistics or user data are you tracking or storing inside your platform?
Where is all of this information actually stored?
You’ll probably have a database or data warehouse in place where you store all of your data. But perhaps you also have an API through which you can access the data.
It will be important to understand your data structure, before pushing data to an analytics platform. It will give you a better idea of how to connect that data to your reporting dashboards.
3. Select the right metrics for your customers
You will have a ton of user data & usage statistics, but not everything will be relevant to your clients. So, it’s your job to decide which metrics are worthwhile to display to customers.
For example, imagine a startup with a platform for selling second-hand clothing. Users that sell their clothes on your platform will mostly want to see their revenue, and perhaps the average value per sale. They might be less interested to see how long people viewed their items or how many times they clicked on it.
The best way to find out what their key metrics are, is through conversation. Engage with customers and prospects to get a very clear picture of what they are actually looking for. If you understand their goals & challenges, you can select the KPIs and metrics that support them to attain their goals.
4. Create dashboards that add value
Once you’ve decided on your metrics, you’ll need to structure it into a good reporting dashboard. If you decide to go with embedded analytics, it will be fairly easy to create interactive dashboards in a couple of hours.
The best embedded analytics tools have a user-friendly editor, where you can simply drag & drop your dashboard together. In that way, your sales or customer success team can easily create the dashboards. This is an extra advantage, since they know best what their customers need.
We won’t go into detail on best practices to create your dashboards here. But we did want to point out a couple rules of thumb you can apply, with some extra reading material if you would like to learn more:
Highlight only the most relevant information: don’t add too many metrics & put your most important information on top;
Avoid distracting visual effects & too much detail;
Don’t overuse colors, but use it to convey meaning.
You can find more best practices about dashboarding in this whitepaper.
5. Embed dashboards in your platform
When your dashboards are ready to be pushed to production, you’ll just need to embed them in the right tab of your platform. This process can be a bit more technically complex, depending on which embedded BI platform you are using.
With Cumul.io, for example, it’s as easy as pasting a short snippet of code to your platform. You can add a token to the code to secure your dashboards. In that way, you can set up filters on the dashboard per user, so they will only see their own data.
Choosing for embedding has proven to be a good choice for startups. They typically get their reporting module fully operational in a week or two, compared to months of development time when building it from scratch. And as you will know from experience, being able to scale fast is crucial in the early stages.
6. Start monetizing the data in your platform
When your analytics are running live on the platform, we get to the final step. How to sell this feature as part of your platform?
If you’ve done the steps above right, you’ll have a powerful component on top of your core platform. Software buyers do consider reporting as a highly added value, so they are willing to pay extra for it.
With the extra revenue you’ll gain from upselling clients, you will be able to earn back the license cost of your embedded analytics license. And even surpass it, because it will generate new income in 2 ways:
Direct new revenue, since customers will pay extra to use the reporting module;
Indirect new revenue, as you might close extra deals that you wouldn’t have been able to sign if you didn’t have reporting in place.
For early-stage startups, this is a great way to generate extra income fast, which you can spend back completely into the further development of your core product.
Thinking to add analytics to your startup’s roadmap?
If you’re considering to add analytics to your startup’s app or platform, just consider that it will take a lot of time and money to build it from scratch. Calculations have shown that it can take years to gain back the initial investment.
Still, many startups are tempted to start building it themselves, because they don’t want to commit to the license cost. Afraid that it’s too expensive for your startup? Then we have good news, because here at Cumul.io, we want to give startups a head start!
Is your startup younger than 2 years old, with less than 10 employees? Then you can apply for our special startup plan. You’ll have access to full embedding features, while you save more than 70% off our basic plans.