You can’t just start measuring everything at once. You have to measure your assumptions in the right order. To do that, you need to know what stage you’re at.
Our Lean Analytics stages suggest an order to the metrics you should focus on. The stages won’t apply perfectly to everyone. We’ll probably get yelled at for being so prescriptive—in fact, we already have, as we’ve tested the material for the book online and in events. That’s OK; we have thick skins.
In a startup, your business model—and proof that your assumptions are reasonably accurate—is far more important than your business plan. Business plans are for bankers; business models are for founders. Deciding what business you’re in is usually quite easy. Deciding on the stage you’re at is complicated. This is where founders tend to lie to themselves. They believe they’re further along than they really are.
The reality is that every startup goes through stages, beginning with problem discovery, then building something, then finding out if what was built is good enough, then spreading the word and collecting money. These stages—Empathy, Stickiness, Virality, Revenue, and Scale—closely mirror what other Lean Startup advocates advise.
First, you need empathy. You need to get inside your target market’s head and be sure you’re solving a problem people care about in a way someone will pay for. That means getting out of the building, interviewing people, and running surveys.
Second, you need stickiness ...