Mistakes Cost Money

Throwing Away MoneyVery few analytics are available to start-up ventures. As a new venture, nearly every performance measurement metric will need to be created. Nearly every process (accounting, bookkeeping, payroll) will need to be created. The more innovative, or disruptive, the idea, the more new systems and procedures will have to be created to support the idea.

Assume your idea will change the world. Now you need completely new analytics to understand how well that idea will perform and create value for the venture. Even widely used tools such as Google Analytics only answer so many questions.

Most likely, you don’t have enough money for robust, enterprise level analytics. In lieu of such systems, you’ll have to understand what metrics are important for you to follow.

Thumbs UpTry this: Try to capture as much data as possible, no matter whether that data is detailed in a spreadsheet, e-mail, or written down on a notepad. Hire statisticians (interns) to run regression analysis and correlation coefficients to understand what factors are driving performance. Even if you have five or six variables you can study, its likely you can see which of those have a likely impact on performance and which are irrelevant.

Thumbs DownAvoid This: Don’t spend your time search for relationships that don’t exist. Sometimes performance is random. Things are inexplicable. Be comfortable operating in an environment where there are many unanswered questions.

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