Is Measurement Killing Your Motivation and Your New Business?
Whether you are setting out as a consultant, building an information product or opening a coffee shop, starting a business is tough. So, it’s no surprise that we look for validation wherever we can find it. We refresh our Facebook page to see our posts gaining enough “likes,” we check every morning to see how many people visited our website and we monitor our Twitter accounts for new followers every day.
There’s only one problem. These metrics have next to nothing to do with the health of our business. At best, they are harmless little addictions. At worst, they have the potential to kill our motivation and may even decrease our chances of success. Let me explain why.
Is the Wrong Kind of Measurement Killing Your Motivation?
It’s 9:01 and your Google Analytics account was updated exactly one minute ago. So, you open a new browser window and login to check the numbers. 308 visitors! That’s 50 more than yesterday. You quietly congratulate yourself and, feeling great, get on with the day. The next day, you return to check your numbers. What the…?!?! Only 201 visitors. Something must be wrong! “ok,” You think to yourself. “It’s probably just a one day thing.” But, tomorrow, it’s even worse. Only 190 visitors.
Logically, you understand that 2-days don’t make a trend, but, you still begin to worry. Are your customers losing interest? Is there something wrong with your website? Maybe this wasn’t such a great idea after all. Feeling demotivated, you get on with the day, but, the magic is gone. At best, you’re operating at 60%.
There’s a simple alternative to this kind of metrics madness. But, first, let’s look at some of the most common measurement mistakes that new business owners make.
Mistake #1: Measuring the Wrong Things
Measurement can be a powerful driver for change in your business, but, only if you are measuring the right things. In his excellent book, The Lean Startup, Eric Ries discusses the importance of setting actionable metrics, which can help us to make informed business decisions. Far too often, we monitor metrics that are ego-driven and easy to access, rather than digging below the surface to discover the true drivers of our business.
Take a look at the metrics that you monitor on a regular basis. Can you honestly say that each of them is an accurate indicator of the health of your business? More importantly, are your metrics actionable? Are they really helping you to run your business, not just monitor it?
If you are having trouble identifying the metrics that matter for your business, consider asking other entrepreneurs or trusted advisors for their recommendations. Sometimes it’s easier for people outside of our immediate circle to see the “obvious” metrics that can make an impact in our business.
Mistake #2: Measuring with the Wrong Frequency
When I used website traffic as an example of a metric that can kill your motivation, I’m sure that many of you disagreed with me. After all, isn’t it important to know how many people are coming to our website? It depends. If you are waiting for a “critical mass” of users before launching your first product, monitoring traffic can actually hurt you. But, that’s another story. Even if we assume that website traffic is a valuable metric for your business, monitoring it on a daily basis is crazy.
Unless you are in the middle of a product launch, it makes sense to select a monitoring schedule that allows you to see long-term trends. For example, it’s better to spend 60 minutes, once a month, to review your Google Analytics reports, than to spend 2 minutes a day, checking the numbers. This will show you what is happening over time, not just on a day-by-day basis. This approach requires discipline. It may even help to schedule time at the end of each month to review your long-term statistics.
Don’t leave this process to chance. Decide up front, how often each metric needs to be monitored to see the trends that really matter.
Mistake #3: Not Looking for the Root Causes of Trends
Metrics are useless, until you do something with them. One of the advantages of scheduling a monthly time to review your metrics is that you will be more likely to ask actionable questions. In your first monthly meeting, review all of your metrics and make sure that you are only tracking the 3-5 that really matter. Then, ask yourself the following every month:
- What interesting patterns can I see in the data? Are there unusual spikes or dips?
- What are the potential causes for each trend?
- What additional information can I find to validate each trend?
Once you identify one or two metrics that you want to dig into further, keep an eye out for actionable changes that you can make in your business.
- Based on the causes that I have identified, which changes can I make?
- How can I test these changes before rolling them out broadly?
- How will I measure the result of my actions? On what schedule?
When it comes to starting a business, metrics can be a valuable tool or a motivation killer. The difference comes from how you approach your measurement strategy. So, take the time to choose the metrics that really matter, monitor them on a reasonable schedule and force yourself to make actionable bets based on the data. If you do, you will be far ahead of the average entrepreneur, of any age and you will see the future of your business much more clearly.
Do you ever find yourself measuring small things on a daily basis, rather than taking the time to monitor the longer-term trends? Which metrics do you find most useful in making decisions for your business? Please join the discussion and “like” and share this article to keep the conversation going.