In Lean Analytics: Use Data to Build a Better Startup Faster, Alistair Croll outlines an approach to using data to measure, learn and make decisions to improve the performance of the start-up business. He argues that the use of “lean analytics” can greatly reduce the time and effort spent on trial and error decision-making and help entrepreneurs quickly get their product and business to the desired targets.
Croll begins by introducing leanstart Methology, which is the spine of lean analytics. This methodology was developed by Eric Reis, who Croll believes best combines the agile development methodology in software with the lean manufacturing principles of Toyota. According to this framework, startups progress in five stages: Discover, Validate, Define, Measure, and Grow.
Using these five stages, Croll then dives into the process of building an analytics program. As he states, you should be collecting data from the beginning of your startup. He proposes five rules for measuring and analyzing data: 1) Measure, 2) Focus, 3) Have Causality, 4) Use an Adequate Sample Size, and 5) Act.
In the “Discover” phase, the focus is on understanding customers, the market, and the problem. Croll emphasizes the importance of collecting qualitative and quantitative data and using this data to create hypotheses, analyze data, and assess trends. If a hypothesis proves to be false, the next step should be to improve and validate it while understanding the existing market and customers.
Validation is the next stage, and it’s where the focus should be on validating hypotheses and testing the product. While in Define, the goal is to use data to help make product specifications, Croll recommends using Design Thinking to help in making user-friendly designs with feedback from the customers. In this phase, the focus is on the user experience and its impact on the adoption of the product.
Measuring is the fourth stage and the primary focus should be on how well the product is doing against the desired goals. Croll emphasizes the importance of setting objectives and KPIs, setting up the appropriate tracking systems, segmenting customers, and measuring the impact of the product on customer loyalty.
Next, Croll moves to the “Grow” phase, which focuses on continuous optimization, experimentation, and scaling. Here, the focus should be on getting the feedback to make sure that the product is not only useful but also drives growth. Croll explains the importance of continual experimentation and iterative improvement. He also states that data and analytics should be used to help scale the product and business.
In his book, Croll touches upon some of the most important aspects of understanding the customer, creating and improving the product, and growing the business. He discusses in detail the five stages of startup, highlights the importance of data and analytics, and provides hands-on advice on what to measure, focus on, and act on to create a better startup. According to Croll, using a lean startup methodology along with data analytics will enable entrepreneurs to make better decisions faster, reduce the likelihood of wasting resources, and ultimately build a better business.
