How to find your KPIs
Founder, Data Geek, Entrepreneur
Compound growth is the ideal. Encourage your users to reach out to their own network.
You can track a lot of things. Prioritizing is hard.
Choose one or two metrics that are the most important and find out what impacts them.
Lesson: Data-Driven Decisions with Mike Greenfield
Step #8 Results: How to find your KPIs
In my time at LinkedIn, I think I really learned a lot about social online dynamics and what will encourage people to do different things. In LinkedIn's case, it was in large part about you are a brand to an extent, and LinkedIn was one of the first companies to really jump on that online. It's something that we try to do with Circle of Moms as well and say, “You're not necessarily joining Circle of Moms. Your joining Circle of Moms is almost secondary to the people who are on here. That was very much true of LinkedIn.
That says one piece and the second piece is just the value of compound growth. If everybody is signing up two other friends, the network get's big very quickly. Obviously not every company can have that. The world doesn't work that way.
You can track lots of things and ultimately prioritizing is hard. At some level, a business has one or two or three drivers of revenue and if you can figure out what those drivers are and then what is ultimately predictive of those drivers and then say, “Okay, how do we push towards what's predictive of those drivers?” I think that can be beneficial and that's going to wind up being very different for an e-commerce company versus a social network.
At some point as a business you have to say, “If there's one or two metrics that we cared about, these would be the one or two, and then what are the things that feed into those? What drives our sales?” and maybe back it up three, four, five steps — registrations and then re-engagement and getting to the first step in the sales process and then the actual sale itself. Knowing those four metrics or whatever number that is can help you get to the one thing you're ultimately trying to optimize.