I’ve been lucky to be part of the early growth of several really interesting and now important networks including LinkedIn, Facebook, and Twitter. One of the things that I felt working on each of these is that we never looked at numbers or metrics in the abstract — total page views, logged in accounts, etc. — but we always talked about users. More specifically, what they were doing and why they were doing it.
When I meet new companies today, I often hear things like “We have 10M uniques with 30M page views per month.” While big numbers are a nice signal of, well, big numbers, I don’t think they are an indicator at all for whether a product is really working. Whenever I hear some of these stats, I always ask the same question: How many people are really using your product?
You need a metric that specifically answers this. It can be “x people did 3 searches in the past week”. Or “y people visited my site 9 times in the past month”. Or “z people made at least one purchase in the last 90 days.” But whatever it is, it should be a signal that they are using their product in the way you expected and that they use it enough so that you believe they will come back to use it more and more.
Once you can define a metric to answer this, then you can really track your growth on a day-to-day, week-over-week, month-over-month basis. And from there, you can identify the key supporting metrics that show you how likely it is more people will convert to using your product on a frequent basis, how likely they are to stay on your product vs churn out, etc.
(1) Cf. the second of Brian Balfour’s 4 criteria for a key metric: “Meaningful interaction: Qualifying events should be meaningful interactions with the product, not just “fly by’s” such as visits or sessions.”
(2) This is more evidence that monthly uniques is a vanity metric, and isn’t used internally by the highest growth companies.