What metrics should you track when launching a minimum viable product?

Before Product-Market fit, you need Problem-Solution fit. Are the customers experiencing a "migraine problem" big enough they will pay to make go away? Are there enough customers to scale the business? Both of these are core hypotheses and you can pair them with action metrics (more below) around customer behavior. Once you find a problem big enough to make customers change their behavior, create goals to optimize your offering with matching metrics.

Before you define your goals, the key to a successful startup is defining the PMF (product market fit). This is not related only to "product" startups - the principals can be applied to any startup - with an offering. Unless the PMF is defined, you cannot accurately create the TAM and why a new startup will succeed. PMF defines the problem, need, solution, entry barrier (for you), entry barrier (for others - which defines your longevity), and scale opportunities.

Prior to releasing your MVP, it's imperative to have a well-defined understanding of your objectives and the insights you aim to gather. As an example; prior to the launch of their mobile app aimed at simplifying personal finance management, the team outlined their intentions. They aimed to comprehend the pain points of young adults struggling with budgeting and targeting this demographic. This clarity in objectives allowed them to design an MVP that specifically addressed these identified issues and subsequently track metrics to gauge user engagement and satisfaction.

When launching a minimum viable product (MVP) in a startup, key matrices to track include user engagement metrics (such as active users, retention rate), conversion rates, customer feedback (gathered through surveys or reviews), and essential financial indicators (like cost per acquisition and revenue generated). Monitoring these metrics helps assess the MVP's success and guides adjustments for future development.

Set SMART goals (Specific, Measurable, Achievable, Relevant, Time-bound). Prioritize objectives aligned with validating key assumptions. Define success metrics—user sign-ups, engagement rates, conversion funnels—tailored to your product's core value proposition. Establish a hypothesis framework: what impact do you expect your MVP to have? Regularly revisit goals based on insights gathered during MVP testing, ensuring ongoing alignment with user needs and market dynamics.

KPIs for nascent business models or products should be about actions. Innovators in nascent programs want to use leading + thought leadership metrics- usually focused on the inputs and creating buzz like social media/press mentions, tradeshow attendances, etc. Management wants lagging + impact metrics - focused on easily countable outputs: sales, ROI, NPV, etc. If you try to go from one set to the other, you get incremental innovation. For radical innovation, you need to find leading + impact metrics - inputs that predict or influence impact. Can you identify changes in customer's behavior that predict a sale? changes in your own behavior? Analogy: like counting steps to lose weight. What is your "step count" metric?

For user-centric products, focus on activation and retention—ensuring users not only sign up but also find consistent value over time. Revenue is key for monetization strategies, while referral rates gauge user satisfaction and organic growth potential. Leverage cohort analysis to track user behavior over time, uncovering patterns that inform optimization strategies. KPIs are dynamic; adapt them as your startup evolves, staying aligned with business objectives.

KPIs serve as vital measures indicating the success or failure of achieving goals and validating hypotheses. Their relevance, actionability, ease of tracking are pivotal in guiding informed decision-making. Depending on variables such as product type, market dynamics, and growth stage, the selection of KPIs varies.Such as: 1-Acquisition, 2-Activation, 3-Retention, 4-Revenue, 5-Referral For instance, a subscription-based e-learning platform might focus on acquisition metrics such as the number of new registrations, activation rates indicating completion of the first lesson, retention rates showcasing consistent logins and activity, revenue from subscription fees, and referral rates from satisfied users recommending the platform to peers.

Selecting the right KPIs is crucial when launching your MVP, as they provide insights into your product's performance in real-world scenarios. Choose KPIs that are closely aligned with your goals and can effectively test your hypotheses. These indicators should be directly relevant to your product type, market, and development stage. Common KPIs to consider include user acquisition metrics (such as sign-ups or downloads), activation (measuring how many users engage in a meaningful first action), retention (tracking repeated use), revenue generation, and referral rates (assessing if users recommend your product). Remember, the chosen KPIs should be actionable and easily trackable to facilitate quick decision-making and iterative improvements

KPIs should be kept simple - do they measure profitability. Or for startups, cashflow. Everything else (and think hard if you need an "else") should measure tangible steps towards these.

"In developing a successful MVP, it's vital to understand that simply collecting data isn't enough. What truly matters is how you analyze that data. Using a variety of tools like analytics platforms and surveys gives you a complete picture. It's essential to ensure your data is accurate, reliable, and consistent. Segmenting this data by factors like user type or behavior helps you spot important patterns and trends. The key is, thorough KPI analysis can lead to smarter adjustments and improvements of your product, setting you up for success in a competitive market.

Tools like Google Analytics, Mixpanel, or Hotjar offer valuable insights. Ensure data accuracy and reliability, verifying your tools align with your MVP objectives. Segment data strategically to unveil user patterns and preferences. Consider A/B testing for impactful experiments, fostering continuous improvement. The depth and quality of your data analysis will be pivotal in refining your MVP and shaping future iterations.

If you have less then 10k users per day in your app use SQL (or Mixpanel if you don't have developers/can't use SQL). A/B testing in your Google Analytics is for apps with at least 10k users per day. Otherwise it will show not accurate results and you'll make a wrong decision.

Upon establishing your KPIs , the subsequent step involves diligent data collection and analysis to evaluate the performance of your MVP and extract valuable insights. An example illustrating this process involves a software startup launching a project management tool as an MVP. To assess its performance, they utilize Google Analytics to track user interactions and behaviors within the platform. Simultaneously, they deploy user surveys and conduct interviews to gather qualitative feedback on user experience. Additionally, A/B testing is implemented to compare variations in features and gauge their impact on user engagement.

You need to listen to your customers. KPIs assume that your direction will never change - but there is a non-zero possibility in startups of a strategic change of directions. Keep an eye on the numbers - but remember that there is a bigger world that you need to keep an eye on.

Prioritize impactful changes to address user needs and boost KPIs. Treat MVP launch as an ongoing learning process, not a static event. Embrace a culture of adaptability and responsiveness. Data-driven decisions fuel continuous improvement, ensuring your product evolves in sync with user demands and market dynamics.

From the very start you should have a product roadmap, even though you know it is likely wrong (or will be updated). Each iteration reviews the roadmap to identify (based on data) features to be added in the next (2 week) Sprint. There will be tension between existing customers (from Account Managers), Sales (immenent new customers) and Strategy (gamechanging new markets) and you will need to balance the data provided by each to make decisions.

With your data in hand, it's time to roll up your sleeves and improve! Compare your actual results to your initial expectations. Did your hypotheses hold true? Look for areas where your product shines and identify any gaps, opportunities, or pain points. Prioritize the most impactful features or changes based on data to truly move the needle on your KPIs. Remember, launching an MVP isn't a one-time event but a continuous loop of learning and improvement. Keep the data cycle spinning, and you'll build a product that truly delights your users.

Return to your metrics, goals, and hypotheses regularly. Use data to learn quickly. And be quick to act. What's working? What isn't working? What can I adjust with minimal effort? What can I adjust with significant effort? How can I improve the user experience? What do I need to debug? How can I ship new features? If possible, learn and ship on a daily basis.

Get a proof of concept in front of (prospective) customers fast. The sooner you can get feedback from people interacting with the product rather than answering hypothetical questions the better.

Prior to MVP, validate the existence of a problem that requires indeed a solution. Conduct 30-50 interviews with potential users and analyze 5-7 competitor solutions. Explore low/high-fidelity prototypes in Figma or similar, simulate user journeys, and present the prototype to +20 potential users.

Start small, learn from user responses, & iterate based on feedback to increase the chances of success. Several factors can contribute to the failure of an MVP. Some reasons are: Incomplete Understanding of User Needs - Insufficient Validation - Poorly Defined Minimum Viable Product - Lack of Iteration - Inadequate Market Research - Technical Challenges - Misalignment with Business Goals - Weak User Acquisition and Retention Strategies - Resource Constraints - Ignoring Key Metrics.. To increase the chances of success, it's essential to thoroughly research, validate, & iterate on the MVP based on real user feedback. Regularly reassessing the product's alignment with business goals & market needs is crucial throughout the development process