Updated: April 10, 2023 - 5 min read
In 1964, during a Vikings-49ers game, Minnesota DE Jim Marshall scooped up a fumble and sprinted 66 yards for a touchdown. The only problem? Marshall had run in the wrong direction and ended up in his own end zone.
Speed is often discussed as one of the biggest advantages that startups have over larger incumbent competitors. They can turn the ship faster to meet customer needs. But, as Marshall’s wrong-way score showed us, both speed and direction matter. Speed x Direction = Velocity.
Minimum Viable Analytics (MVA) delivers on the promise of velocity for startups. An MVA stack pairs product analytics (like Mixpanel or Amplitude) with an automated way to collect the data from your product or website. The focus of MVA, like its namesake the MVP, is to get a tracking framework that delivers “just enough” information for Product Teams to quickly iterate. Having MVA in place from day 0 ensures your team can measure what matters and make critical product decisions early.
Minimum Viable Analytics Delivers Direction
To ensure velocity, we’ll dive into 3 common use cases and how MVA helps give the signal that Product Teams can use to steer the boat. Having the right data about how your customers engage with your product increases confidence and de-risks experiments as you iterate on your product.
Signup and Purchase Optimization
Let’s say you are looking to increase the number of people who sign up for your product, make a purchase, and complete a form. A funnel report in a Product Analytics tool, like Mixpanel, can help visualize your customer’s progress toward that action. You will see how many users made it to each step in your process, and can then identify where to focus your resources for improvement.
We recently spoke with Brady Gillerlain from real-estate startup Ylopo, who talked about the impact of doing a funnel analysis on their signup forms and then iterating on solutions helped them increase lead volume and quality.
Onboarding and Activation
Activating new users and helping them find the value in your product quickly ensures that your marketing budgets are being spent effectively and helps the business grow quickly. An MVA stack can help you identify the “AHA moments” your users experience as they use your tool in the early days.
Once you find the key events that trigger an aha moment, you can put as much effort as possible to driving your users to the aha moment. This is why Facebook pushes users so hard to add more friends. They know if they can get you to add a few friends, you’re more likely to stay.
To find your key event, you need to identify likely key events, then run a report to see what impact that has on churn.
Retention analysis uncovers how “sticky” your product is. Figuring out how to retain as many users as possible accelerates growth. A common retention curve (shown below) shows that most users churn early on in their use of a product, and then churn slows as time goes on.:
A typical consumer product retention model assumes that 60% of people churn in the first 3 months and 4% churn each month thereafter.
To realize how important retention is, if the retention in the first 3 months was improved to 80%, first-year revenue from new customers would double. And long-term revenue would increase 2.5x.
If the long-term churn were to cut churn each month, that would also double revenue over the long term.
There are two ways to focus on retention:
Focus on the new user experience, i.e. user activation
Focus on the existing user experience
Focusing on the new user experience will push the retention curve up:
Focusing on the existing user experience will flatten the curve:
Adding Speed to Minimum Viable Analytics
MVA will enable Product Teams to see where they need to focus resources to drive growth. But getting the right data, in the right place, in the right format to be usable is a time-consuming challenge. It requires your most expensive resources, your engineers, to configure APIs and code events. In addition to being costly, this also pulls engineers away from their main job—building customer-facing features.
We’ve spoken to 100s of PMs about this process and they also report that the process of writing a ticket, getting it added to the next sprint, and waiting to collect enough data to analyze takes a month (or more!).
Freshpaint helps Product Teams add the speed back to their analytics. With Freshpaint, Product and Growth Teams can create events, backfill historical data, and aggregate data from across the tech stack – all without needing engineering resources. This combination of functionality means that you can more quickly test hypotheses, run experiments, and iterate on features that will impact your growth.
This speed means you can more quickly identify the points of failure in your onboarding process, the AHA moments in a new customer journey, and the parts of the experience that causes customers to churn.
To do this, Freshpaint delivers:
Autotracking for all customer actions and saving them in the background so the data is ready when you need it.
Visual Tagger that Product and Growth Teams use to define customer events and send them to your analytics, messaging, CRM, data warehouse, or other tools.
Time Machine that can backfill up to 12 months of data when events are defined, meaning PMs can test new hypotheses now rather than waiting for data to populate
Data Pipelines where data can be transformed from any tool to any destination in your tech stack with just a few lines of SQL.
Freshpaint is a critical part of your MVA stack, helping you to iterate faster, experiment more, and drive exponential growth. In the recent announcement about Freshpaint’s Series A round of funding, a new generous free tier was unveiled. To get started with Freshpaint for free, visit freshpaint.io.
Updated: April 10, 2023