Identify the 'One Metric that Matters'



Collecting data is easy. There are lots of tools out there and ways to gather data about everything that’s happening with your business, from lead generation through to customer satisfaction.
But what are we supposed to do with all that data? How does it help us focus on the key challenges at hand, provide us insights into our next steps, and drive success?

The data you collect may be helpful at some point; but if you can’t cut out the noise, you’ll get buried. That’s why you should think about a single metric that’s most important for the stage of your company’s development, a single number that you want the entire company to focus on and improve upon. I call it the One Metric That Matters.



The One Metric That Matters (or OMTM) is a single number that you care the most about at the current stage of your startup. First, let’s understand a bit more about the OMTM, then talk about what makes a good metric, and finally how to pick the right number to focus on.
Four Reasons You Need the OMTM for Your Startup

As I’ve said, the OMTM is a single metric that you care about at a given point in time, for the stage of your startup. So the first thing to remember is this: the OMTM will change. It’s not a single number that matters throughout your startup’s existence. We’ll discuss how it changes and why later on. For starters, let’s understand why you need the One Metric That Matters in the first place:

1. It answers the most important question you have.
At any given time you’ll be trying to answer a hundred different questions and juggling a million different things. You need to identify the riskiest areas of your business as quickly as possible – that’s where the most important question lies. The OMTM is responsible and necessary for measuring and answering that question.

2. It forces you to draw a line in the sand and have clear goals.
After you’ve identified the key problem you want to focus on, you need to set goals. You need a way of defining success. It’s very hard for most startups to draw a line in the sand. Let’s say conversion on your website to trial accounts is your OMTM, and it’s currently at 0.5%, which you know is too low. So you’re going to put your entire startup’s resources into improving that number. But what should it be? How will you know if conversion is high enough that you’ve been successful?
At this point you need to draw a line in the sand and pick a target. The line you’re drawing is in sand for a reason; you can shift it as you start experimenting with solutions and learning. Just stay honest with yourself about why you’re doing it – don’t set a high bar, miss it, and then lower the bar in order to say you’ve succeeded and move to the next step. The One Metric That Matters is a forcing factor for encouraging you to set targets and analyze your results honestly and transparently.

3. It focuses the entire company.
Focus is good. In fact, it’s better to run the risk of over focusing (and missing some secondary metric) than it is to throw metrics at the wall and hope one sticks (the latter is what Avinash Kaushik calls Data Puking.) Put the OMTM front and center, physically visible to everyone all the time.

4. It inspires a culture of experimentation.
The Lean Startup movement has shown us the importance of experimentation. It’s critical to move through the “Build -> Measure -> Learn” cycle (explained in Eric Ries’ book, The Lean Startup) as quickly as possible to generate enough learning so that you can start executing effectively in the right direction. You want to instill and inspire a culture of experimentation throughout your organization – the One Metric That Matters can help.


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