How startups use analytics to find their product-market fit

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A couple of weeks ago I was asked to participate in a product/market fit seminar being co-hosted by Dave Thomas of Rocketbuilders and the SFU Venture Connection.  In this post I’m going to share HiretheWorld’s contribution to the seminar and in future posts I will cover other speakers presentations.

HiretheWorld was asked to share how we collect data about our customers and how we use that data to make key decisions. This gave us an excuse to organize our thinking on the subject of product/market fit and put it into a presentation. Feel free to follow along in the presentation below as I take you through HiretheWorld’s 5 minute Presentation.

Slide 1: Introduction

Slide 2: HiretheWorld’s view of the World:

A series of internal biases shapes how we view the world and how we go about building our product. Two of these biases are relevant for today’s discussion:

1. Work is going to move online: In the same way that product distribution is moving from the superstore to the superwebsite (Amazon) work will move from the office tower to the web.
2. Creative People will benefit the most from online work: For non creative jobs such as data entry or transcription, price is the only real competitive advantage assuming all other factors (reliability etc.) are constant. Creative people have the ability to differentiate themselves  and build a personal brand. We have seen the starting of this process in newspapers. The world’s most creative and highly demanded authors can make more money online then by remaining in the traditional workplace. Click here to see Seth Godin’s experience self-publishing.

If you take the view that every startup enterprise is simply a hypothesis about a potential product and market fit that may exist, then your primary job at the early stages of development is to find out as much information about your potential customers as quickly and as cheaply as possible. This market validation process is referred to as the “Ready, Aim, Fire” approach and is highly detailed in Rob Adam’s book A Good Hard Kick in the Ass: Basic Training for Entrepreneurs. (This is the book used in SFU’s foundation in entrepreneurship course)

Slide 5: Continuous Market Validation:

Finally we get to the good stuff… some specific details on the types of analytics we are using to optimize our funnel and iterate our product mix through continuous market validation. I will give a short summary of what each product does here, and follow up with a detailed review of each as we continue to use them.

Slide 6: Analytical Tools used to collect data from our customers:

1. Crazyegg: Crazy egg provides a heatmap that overlays your website’s individual pages. This allows you to see where users spend the majority of their time on individual pages. You can see how far down the average user scrolls and an aggregation of all the points on a single page where someone has clicked. You know that big call to action below the fold that no one is clicking on? If only 10% of people are making it that far down the page, Crazyegg will let you know.
2. Google Analytics: This is probably the product that most users will have experience in. Although probably a lot fewer are more familiar with all the great new features that were recently released including “Real Time Tracking.” (Which allows you to “watch” users on your website in real time) Google is great for aggregate user tracking. You can set up your sales funnel in great detail and watch where the users “fall off” of your website. Google’s one shortfall is it’s inability to “zoom in” on specific users, but there are other tools for that.
3. Kiss Metrics: Kiss Metrics is one of the newer tools we’ve recently started to look at. The nice thing about Kiss metrics is that it allows you to track individual users. We can take successful conversions and track them backwards through the funnel to see where they came from and their specific “path” to converting into a sale. I will have more to say on these guys once we utilize them a bit more.
4. Customized Analytic Dashboard: A large majority of the data we collect is gathered through our own system and displayed in an dashboard we created ourselves to track our own critical numbers. At the end of the day the plug and play systems aren’t flexible enough to get you all of the information you require on a real time, continuous basis. This is something that we continue to iterate as our product and our marketing teams demand it.
5. Usertesting.com: This was a late edition as we only ran our first three users through the site last week. It was brutally obvious to our entire team how valuable this service is. We had three individuals from different parts of the world go through and follow a list of simple tasks to do on the website. We then get sent a video of them trying to do it with full audio of what they’re thinking as they go. There were some great moments where we were all squirmed at some pretty obvious errors that were being made due to some really minor UI issues. Each UI improvement leads to higher conversions and is well worth the investment of conducting this exercise.

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