In nearly every advice post I see in my product management groups, PMs rush in to say that to solve the dilemma du jour, start with your metrics. Evaluate how a feature supports or diverges from your target metrics and you’ll have your answer. It’s a comforting, concrete way to make decisions, and I wholeheartedly agree with it.
But what if you don’t have metrics? What if you’re a brand new startup with no baseline to work from? What do you do when the numbers aren’t there?
Step 1: Begin with the end in mind
Stephen Covey had it right. Maybe you don’t have the metric you want in front of you, but you can certainly start with A metric. Are you charged with getting to Dollar One? Then revenue is your target. Are you charged with keeping happy customers? Then churn is your metric.
If you’re in a SAAS business like me, there are certain overall business metrics worth tracking. You can find lots of lists to lay these out, but I like this one that shares metrics at various stages of growth and this more general one. These are useful, but there are going to be times when you’re not sure how to calculate these in your current realities.
If you’re a new company, you don’t know your churn. You also don’t know your LTV. Your CAC may vary wildly based on deal size or account manager skill levels.
Sigh. It’s not always going to be clear. And I find that when the way isn’t clear, it helps to start at the end and work backward.
When you start at the end, 99% of the time you’ll find that your metric is about revenue. Take a small step back, and you may find that your metric becomes average order size, cart abandonment rate, or new subscriptions. Step back even further and you find you’re looking at time on site, sales qualified leads, or page load time.
Now you’ve got something to go on. Engineering teams can’t tackle a problem as large as “make more money.” It’s not tactical enough to give anyone a sense of where to start, and it’s too mercenary to inspire anyone to come up with the path from here to the end of the rainbow.
Take the tangible goal to your team, while always tying it back to how it gets you closer to achieving the larger, North Star goal.
Ok, we’re on the right track…but what if you’re at a brand new startup and you could literally improve any of these metrics and be doing great things? How do you decide where to focus when everything is important?
Step 2: Let your customers show you your metrics
If your goal is “make more money” and you’re not getting much more direction than that, you’ve got two options. Lean on your brilliance and make an educated guess about which metric is worth caring about, or talk to current, former, and prospective customers. As someone currently in the market research space, I heavily lean toward the latter.
Here’s a secret: very few product leaders actually talk to their customers. If you do, you’re already in the top 10% of product teams.
Why don’t more product managers talk to real users? Too much friction. You may not be sure if/how you can contact registered users, and finding people who fit your personas but who are not current customers can be daunting. In the b2b space, you’re looking at a 10% response rate and 1% conversion rate on cold contacts via LinkedIn.
Do it anyway.
Get over the fear of being ignored or told no by separating yourself from your work. These strangers aren’t telling you to f**k off because you’re a horrible person, they’re saying right now, I don’t have time or interest to engage with you on this. The world is big and you will find people willing to chat.
To get past the intimidation factor, have a discussion guide prepared that ranks the top things you want to learn during the conversation. Stick to your guide, but let the conversation flow naturally. When you ask a question, don’t make it a leading one. Rather than “would you get value from X Feature?” phrase it as “How valuable would X Feature be to you?” This neutralizes the question and prevents you from hearing what you want to hear (because yes, you will have an opinion going into these interviews, and no, you’re not always going to be right).
Step 3: Pick one, build buy-in, and commit
When you’ve got some clarity from having talked to real users or potential customers, the hard part really sets in. Now it’s simply a choice, based on your intuition, interpretation of customer feedback, and predicted impact on company goals. Luckily, Merci Grace convincingly argues that product intuition can be learned.
So you pick a metric, build buy in with your peers and key stakeholders, and commit. That’s the hardest part, when everything is important. You’ll be getting emails from the sales team that Potential Customer needs a shiny new feature before they will sign an enterprise deal. You’ll get bug reports from your customer service team as real people use your software. You’ll have executives who get excited about something your investors are pushing, or worried about what a competitor is doing.
Tune it out, get a baseline on the metric you’ve decided to focus on, and iterate. At this early of a stage, you are looking for something that moves the numbers massively, or at least shows a moderate, steady trend in the right direction. Small gains aren’t good enough when you don’t yet have a product.
As you iterate, your executive team and other colleagues are likely to get anxious. Bored, maybe. Because sometimes you can’t rush the numbers and the feedback cycle takes longer than is ideal. When you start hearing whispers of other features, new priorities, and “well why couldn’t we just…” calmly, kindly, and firmly direct everyone back to the metrics you agreed on. Not adequately improving the metric doesn’t mean it’s the wrong one. It just means you haven’t found the right thing yet.
It can be a bit of a wilderness trying to build product in a brand new environment, when you’re creating instead of optimizing. To get the whole company committed and moving toward one goal, start at the end and work backward. Consider your output metric and trace that back to measurable input metrics you can affect. Combine that with conversations with existing or prospective users (or even better – former users!) and you’ll have enough to drive alignment with your leadership team. Once you pick a metric, commit to it and be laser-focused, not allowing the disparate needs of clients or the whims of creative geniuses to pull you off track.