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A global survey on the
 state of data driven
culture within startups
Contents

SECTION ONE


About Geckoboard         1
SECTION TWO


About Econsultancy      2
SECTION THREE


Foreword                3
SECTION FOUR


Executive Summary       4
SECTION FIVE


Methodology             7
  Respondent Profiles    7

SECTION SIX


Findings                9
  Data Driven Culture   9
  Data Collection       10
  Data Communication    15
  Decision Making       19
  Metrics               19
  Optimisation          26
  Culture               27
SECTION ONE


                              About Geckoboard


Geckoboard is a hosted status board                able to better assess that information — with
that collects business information from            dashboards being the mainstay for how it’s
many online services and customers’ own            presented and consumed.
data sources, summarises it to distil the
key messages and displays it in a way              90% of customers have reported
that is easy to understand and interpret.          improving their decision-making thanks to
Businesses use status boards to pull               Geckoboard.
important information locked up in disparate       Since launching in February 2011,
services together into one place to give a         Geckoboard has picked up some 2,500
real-time status on the health of all aspects      customers, including Atlassian, Groupon,
of a business.                                     Gdgt, SecondMarket and Stack Exchange.


Geckoboard has called itself the “Chartbeat        Stop spending time checking services and
for everything else” — in reference to the         start monitoring your business in real-time.
tool used to monitor traffic and other metrics     All your information available all the time, at
on websites. Geckoboard’s rise speaks              a glance. In 30 days, you won’t remember
of a growing trend among businesses to             how your business ran without it. Get a free
consolidate ever-growing lists of diagnostics      trial here.
and information into simpler views to be




                                                                                                     1
SECTION TWO


                              About Econsultancy


Econsultancy is a global independent             decisions, build business cases, find the
community-based publisher, focused               best suppliers, accelerate their careers and
on best practice digital marketing and           lead the way in best practice and innovation.
ecommerce, and used by over 400,000
internet professionals every month.              Econsultancy has offices in London, New
                                                 York, Singapore and Sydney,and we are a
Our hub has 185,000+ subscribers                 leading provider of digital marketing training
worldwide from clients, agencies and             and consultancy. We trained over 5,000
suppliers alike with over 90% subscriber         marketers and ran over 200 public training
retention rate. We help our subscribers build    courses in 2012.
their internal capabilities via a combination
of research reports and how-to guides,           Join Econsultancy today to learn what’s
training and development, consultancy,           happening in digital marketing – and what
face-to-face conferences, forums and             works.
professional networking.
                                                 Call us to find out more on +44 (0)20 7269
For the last 10 years, our resources have        1450 (London) or +1 212 971 0630 (New York).
helped subscribers learn, make better            You can also contact us online.




                                                                                                  2
SECTION THREE


                                       Foreword


Geckoboard is pleased to present the               data, how metrics are being chosen,
results of the first Global Report on Data         how resources are being assigned, the
Driven Culture Within Startups, which was          importance of data visibility and the most
designed to offer insights on how startups         popular tools for data communication.
are dealing with an ever growing influx of
data and the key challenges faced when             The report reveals that businesses are,
building organisations that embrace data as        in general, actively looking to improve
much as intuition.                                 their efforts towards building a data driven
                                                   culture. So far, most of the efforts have been
Data driven decision-making has been               made in data gathering and analytics, with
fuelled by terms like ‘Lean Startup’ and           very little progress in data communication
‘Lean Analytics’. Eric Ries coined the term        and mechanisms to ensure that data is acted
‘lean startup’ in 2008 and since then, it has      upon. Surprisingly, most respondents do
grown in popularity among entrepreneurs.           not feel confident about their KPIs and their
The term has now become a movement that            current challenge is to understand what the
has brought innovative thinking around how         key drivers of the business are, to ensure
to design, build and develop sustainable           that they build the right context for data
businesses based on customer feedback.             analysis.


As the lean movement evolves, the                  We hope that you find the results of this
emphasis on data driven decision-making            survey to be informative, and thank you
becomes more relevant. This report offers          again to those who participated. We look
an overview on how startups are using              forward to your participation in the future.




                                                                                                    3
SECTION FOUR


                             Executive Summary


This report explores the general attitude of startups towards metrics and data communication.


It offers an overview on:



   1   How startups are gathering, analysing and communicating data.




   2   How much time and resources are spent on analytics.




   3   What challenges are involved in building a data driven culture and monitoring the
        right metrics.




   4   Data visibility and its impact on decision-making.



This report is based on a global survey of 368 startups carried out by Geckoboard and
Econsultancy.


We would like to thank all the organisations that took part in the survey and those who
contributed with insights, analysis and valuable comments.




                                                                                                4
SECTION FOUR: EXECUTIVE SUMMARY




The findings of this research can be summarised as follows:



The vast majority of respondents                  Metrics democracy. In more cases than
identified themselves as data driven              not, respondents who choose metrics in a
businesses; only 5% of respondents                collaborative manner felt more confident
stated that data is not a priority within their   about their metrics in comparison to those
organisation.                                     who do not involve the team.

Intuition is still highly valued in decision-     Data vs. Data communication: 44% of
making. Despite the rapid adoption                startups spend substantially more on data
and evangelisation of the lean startup            gathering than on data communication,
methodology (see Section 3) and the               with 34% of respondents spending equally
constant emphasis on data collection and          on both. This highlights the importance of
measurement within the startup community,         developing mechanisms to guarantee that
it is surprising to find that intuition and       data is collected with a purpose and that
experience are still heavy components of          key insights can be derived from it. The
the decision-making process. Only 27%             improvement of data communication can
of respondents believe that data is crucial       lead to a better understanding of what is
when it comes to decision-making.                 important to measure and what is not.


There is a marked lack of confidence
around data and metrics. Almost half of
the respondents (49%) do not feel confident
about the metrics they are currently
                                                           “If you can't explain
monitoring. Based on analysis of data                      it simply, you don't
gathered in this report, this group is also
less likely to have processes in place to                  understand it well
ensure that data is understood and acted
                                                           enough.”
upon.
                                                           ALBERT EINSTEIN




                                                                                               5
SECTION FOUR: EXECUTIVE SUMMARY




The survey also showed that real time data and dashboards are increasingly being
adopted by startups as a communication tool although traditional formats like Excel are still
the most popular.


Despite the investment on tracking, data gathering and analytics, 59% of respondents do
not have processes in place to make sure data is understood and acted upon.




                                                                                                6
SECTION FIVE


                                   Methodology


This report is based on a global survey of       Econsultancy also promoted the survey via
368 business professionals working in the        social media. The incentive for taking part in
startup community, but also included larger      the survey was a complimentary copy of the
businesses so that general attitudes towards     report.
data management were represented. The
survey was live during January and February      If you have any questions about the
2013.                                            research and methodology, please email
                                                 Sofia Quintero at Geckoboard (sofia@
Geckoboard promoted the survey to its            geckoboard.com).
customer data base and via social media.



5.1 RESPONDENT PROFILES




A total of 368 business professionals took       the United Kingdom are also significantly
part in the survey. The greatest proportion      represented.
of respondents work in the internet/software
industry (42%), though a range of other          The following chart shows that the
industries are represented.                      survey respondents are typically senior
                                                 within their organisations, with over 70%
Respondent organisations are primarily           classifying themselves as founders, CTOs,
based in North America, although Asia, Latin     CEOs, directors, or presidents of their
America, Western Europe and specifically         organisations.




                                                                                                  7
FIGURE 1: WHAT IS YOUR POSITION IN THE ORGANISATION?



                                   FOUNDER / CEO

                                   FOUNDER / CTO

                                            OTHER

                                        DIRECTOR

                                       DEVELOPER

          MANAGER ANALYTICS

                                       EXECUTIVE

         MANAGER MARKETING

                                       PRESIDENT

                                  ADMIN / SUPPORT


                                                    0%         10%            20%            30%           40%



The aim of the survey was to look at the                           Figure 2 shows the size of the responding
attitude of startups towards data collection                       companies. More than 80% of responding
and analysis; therefore the survey was                             companies have less than 100 employees,
marketed towards respondents from                                  reflecting the startup focus of the report.
companies with less than 20 employees.


FIGURE 2: WHAT IS THE SIZE OF YOUR ORGANISATION?



                                       30
          NUMBER OF RESPONDENTS




                                       23



                                       16




                                        9




                                        2
                                              1-4    5-9   10-19   20-99    100-    500- 10,000+
                                                                            499     9,999

                                                           NUMBER OF EMPLOYEES                                   8
SECTION SIX


                                        Findings

6.1 DATA DRIVEN CULTURE




Definition: A ‘Data Driven Organisation’ is      uses technology to communicate data
one that cultivates a culture where data is      in a clear and approachable way. In this
valued as much as intuition and experience;      kind of organisation, decision-making is a
where data is visible and accessible to          collaborative process and metrics are set
everybody. A data driven organisation            based on very specific business goals.



FIGURE 3: BASED ON THE DEFINITION ABOVE, WOULD YOU CONSIDER YOUR ORGANISATION TO BE
DATA DRIVEN?



Yes 26% - since the
very beginning we made
sure data was part of our
culture




                                                                           No 7% - this is not a
                                                                           priority in my
                                                                           organisation; only
                                                                           management make
                                                                           decisions




 Yes 44% - we have
 made great improvement
 and are still working on it



                                                                                                   9
SECTION SIX: FINDINGS - DATA DRIVEN CULTURE




Figure 3 shows that the majority of                     this area. A total of 70% of respondents
respondents not only understand the                     consider their organisation to be data-
importance of building a data driven                    driven, with only 7% of respondents
culture, but are also proactively looking into          believing that being data driven is not a
mechanisms that will allow them to improve              priority.


6.2 DATA COLLECTION




As the industry moves forwards with new                 ever growing data points available to
technologies able to track data in very                 organisations, the illusion of having all the
granular and sophisticated ways, there                  data needed in order to make decisions
is also a need for simplification. With                 starts to blur with information overload.


FIGURE 4: TO YOUR BEST KNOWLEDGE, HOW MANY THIRD PARTY SERVICES OR SYSTEMS DOES
YOUR ORGANISATION CURRENTLY USE TO GATHER DATA?




                                    60%
        PERCENTAGE OF RESPONDENTS




                                    45%




                                    30%




                                    15%




                                    0%
                                          1-4     4-9               10+           DON’T
                                                                                  KNOW

                                                NUMBER OF SERVICES

                                                                                                        10
SECTION SIX: FINDINGS - DATA COLLECTION




Nearly a fifth (18%) of respondents in the         assessment of business performance.
survey said that they used more than 10            Google Analytics alone offers over 200
different services to gather data, revealing       pre-defined dimensions and metrics to
the wealth of data that can be collected. The      choose from and combine. Choosing the
list of potential metrics available to decision    right metrics within the right context is one
makers represents a constant challenge             of the most crucial tasks for data driven
when it comes to executing a focused               organisations.


FIGURE 5: HOW MANY FULL TIME EMPLOYEES DOES YOUR COMPANY CURRENTLY HAVE WORKING ON
DATA GATHERING, ANALYSIS AND DISTRIBUTION ROLES?




                                 60%
     PERCENTAGE OF RESPONDENTS




                                 45%




                                 30%




                                 15%




                                 0%

                                       1-4   4-9           10+            NONE


                                             NUMBER OF EMPLOYEES



77% of respondents have at least one full-         and analysis.
time employee working on data gathering




                                                                                                   11
SECTION SIX: FINDINGS - DATA COLLECTION




  Figure 6 shows the number of employees              employees, however also reveals that a
  working on data, against the size of                surprisingly large proportion of respondents
  the company. As expected, the larger                have no employees working on data, even
  organisations are more likely to have a             in organisations with up to 100 employees.
  higher number of data-dedicated


  FIGURE 6: THE NUMBER OF EMPLOYEES FOCUSED ON DATA, CHARTED BY THE TOTAL NUMBER OF
  EMPLOYEES IN THE ORGANISATION.



60%




45%




30%




15%




0%
           1-4            5-9          10-19      20-99          100-499        500-         10,000
                                                                                9,999

                                SIZE OF ORGANSIATION (EMPLOYEES)


            BETWEEN 1-5                BETWEEN 5-10                  10+                  NONE



  Based on respondents’ comments data                 of data-focused employees, with it being
  collection and analysis is not always the           part of the role of many, but the sole role
  responsibility of a dedicated staff member,         of none. It is evident that software is also
  being a shared responsibility across multiple       relied upon by many respondents to do
  teams and with roles extended to include            the data gathering and analysis, but many
  data management. This could affect how              organisations assign no specific person to
  respondents were counting the number                pull insights from this analysis.               12
SECTION SIX: FINDINGS - DATA COLLECTION




RESPONDENT COMMENTS: ‘HOW MANY FULL-TIME EMPLOYEES DOES YOUR COMPANY CURRENTLY
HAVE WORKING ON DATA GATHERING, ANALYSIS AND DISTRIBUTION ROLES?




   “I do product, and                                          “There is no dedicated
                                    “This is distributed
   one other guy does                                          staff – it is a shared
                                    across the team.”
   core-business metrics.”                                     responsibility.”




                                    “One person                “We can’t afford a
   “Support and Services
                                    is delegated               salary of £35k+ to
   focus on customer
                                    responsibility and         analyse our data;
   data and our software
                                    accountability for this.   many of us have
   itself is geared
                                    However, it is not a       managed people and
   towards data analysis
                                    full-time equivalent       roles which do this
   and gathering.”
                                    aspect.”                   kind of work. We have
                                                               extended our roles
                                                               to do this, as this will
                                                               drive decisions in the
                                                               company.”


   “Right now I am the only person. I am using software
   to try to do automatically, such as the integrations with
   Sugar CRM and other apps to help do auto tracking.”




                                                                                          13
SECTION SIX: FINDINGS - DATA COLLECTION




FIGURE 7: WHAT IS THE BALANCE BETWEEN RESOURCES SPENT IN GATHERING DATA (BIG DATA) AND
COMMUNICATING DATA (REAL TIME METRIC DASHBOARDS, REPORTS)?




                                                              44% - We spend
34% - We spend equally                                        substantially more in data
on both                                                       gathering




22% - We spend
substantially more in data
communication



Data gathering rather than data              34% of respondents put equal emphasis in
communication seems to be the priority       both processes. Data becomes irrelevant
among startups with 44% of respondents       if organisations cannot make sense of it or
spending more on data gathering. Only        communicate insights clearly throughout the
22% put more emphasis on how data is         organisation.
communicated. It is surprising that only




                                                                                           14
6.3 DATA COMMUNICATION




FIGURE 8: WHAT IS THE MOST COMMON FORMAT FOR DATA COMMUNICATION IN YOUR
ORGANISATION?




                       6% - Other                                       32% - Dashboards or
                                                                        real time display
                                                                        technology
           8% - Powerpoint
           presentations



24% - Reports exported
directly from third party
systems and applications                                                               30% - Excel
                                                                                       Spreadsheets




Excel spreadsheets and dashboards are          to share data among teams are: Google
seen to be the preferred tools used to         Docs, Trello and proprietary tools and
share data within organisations. Real-time     dashboards.
technology has been rapidly gaining in
popularity among startups due to its ability   Given the volume of metrics that can
to rapidly show data, which is vital in a      be tracked and gathered, it is crucial
business as agile and changeable as a          for startups to find appropriate tools to
startup.                                       communicate that data and make sure it is
                                               understood throughout the organisation,
Based on comments provided by                  and, vitally, that it is acted upon.
respondents, other tools and formats used




                                                                                                 15
SECTION SIX: FINDINGS - DATA COMMUNICATION




FIGURE 9: ARE THERE ANY PROCESSES IN PLACE TO MAKE SURE THAT DATA IS UNDERSTOOD AND ACTED
UPON?




                                      60%
          PERCENTAGE OF RESPONDENTS




                                      45%




                                      30%




                                      15%




                                      0%

                                            YES                      NO




Respondents were asked if they had any            that data is understood and actionable.
processes in place to make sure that data
is understood and acted upon; the majority        Below are some examples of processes
answered no. It is surprising to find that even   given by responding companies. Meetings
though 70% of the respondents consider            and verbal discussions are popular to
their organisations to be data driven, the        decipher data, with dashboards and KPIs
same organisations are also typically             also used to prompt discussion and reviews.
currently lacking mechanisms to make sure




                                                                                                16
SECTION SIX: FINDINGS - DATA COMMUNICATION




RESPONDENT COMMENTS: ‘ARE THERE ANY PROCESSES IN PLACE TO MAKE SURE THAT DATA IS UNDER-
STOOD AND ACTED UPON?’




  “Analysts and managers          “Bonuses based on key       “Creation of a data
  review reports.”                metrics”                    warehouse”




                                   “Trending service usage    “Verbal report out, each
  “Custom dashboard”
                                   prompts management         section is discussed for
                                   review.”                   clarity”




   “Tied directly to feature
   releases, watching              “We are looking at         “Weekly meetings to
   metrics move, metric-           dashboards to make         comment on metrics
   driven goals, etc.”             data accessible”           (founders and investors);
                                                              benchmarking cross-
                                                              portfolio”




   “We write blog posts. We set OKRs (objectives and key
   results) that are basically hypotheses that require data
   to prove them (or disprove them) within a set period of
   time.”




                                                                                          17
SECTION SIX: FINDINGS - DATA COMMUNICATION




Figure 9 shows a chart of the data in Figure               It may be the case that these companies
8, combined with data from the question:                   analyse their data in a more fluid way, in
‘Would you consider your organisation to                   meetings and ad hoc by individuals, rather
be data driven?’ (Figure 3). It is interesting to          than having stringent processes in place
see that 12% of respondents said that their                for acting upon data. Due to the nature of a
organisations were data driven, and had                    startup, these processes may not have yet
been since the very beginning, but at the                  been put in place, but the case may be that
same time did not have any processes in                    in some companies a lot of data is being
place to make sure that data is understood                 collected, without much meaningful insight
and acted upon.                                            being gained from it.


FIGURE 10: CROSS TABULATION ANALYSIS OF ‘WOULD YOU CONSIDER YOUR ORGANISATION TO BE
DATA DRIVEN?’ (FIGURE 3), AGAINST FIGURE 9: ‘ARE THERE ANY PROCESSES IN PLACE TO MAKE
SURE THAT DATA IS UNDERSTOOD AND ACTED UPON?’




                                  Are there any processes in place to make sure that data is
                                                understood and acted upon?


                                                                    Yes                    No

                                 No, but we are
                               mobilizing resources
                              and efforts to improve
                                                                     8%                   15%
                                   in this area


                              No, this is not a priority
                                        in my
 Would you consider             organization; only                   1%                   4%
                                   management
 your organisation to           makes decisions
 be data driven?
                               Yes, we have made
                             great improvements and                 19%                   27%
                               are still working on it



                                Yes, since the very
                               beginning we made
                             sure data was part of our
                                                                    13%                   12%
                                      culture

                                                                                                          18
6.4 DECISION MAKING - METRICS




FIGURE 11: IS YOUR ORGANISATION CONFIDENT THAT IT IS MEASURING THE RIGHT METRICS
AND KPIS?




                                      60%
          PERCENTAGE OF RESPONDENTS




                                      45%




                                      30%




                                      15%




                                      0%

                                            YES                       NO


Almost half of the respondents do not             61% of respondents said that the key
feel confident about the metrics they are         challenge in choosing the right metrics
tracking. When viewed in the context of           was in understanding the key drivers of
a startup culture, these results are not all      the business. Uncertainty is at the core of
that surprising. Most of the respondent           startups so being flexible to test and try
comments on this question are around the          different approaches to measurement is
need to be flexible and open minded to            more a survival practice than an option.
changes. It is part of the lean startup culture
to avoid making assumptions without having        Comments from the survey respondents
a way to prove them. Being confident              supported this theory, with many stating that
about the current metrics could be, to            they were still evolving and that there was
some companies, like declaring that the           always more data that they could look at.
organisation has stopped learning.                Agility is a key requirement for startups, with
                                                  changing metrics being part of learning and
This is also reflected in Figure 11, where        evolving for the benefit of the business.


                                                                                                    19
SECTION SIX: FINDINGS - DECISION MAKING - METRICS




RESPONDANT COMMENTS: ‘IS YOUR ORGANISATION CONFIDENT THAT IT IS MEASURING THE RIGHT
METRICS AND KPIS?’




  “We could always                 “You never can be sure       “I’d say yes... but always
  measure more!!”                  until enough data has        learning new ones. So
                                   arrived and fine-tuning is   75% confident.”
                                   always needed.”


   “At least confident that
   we’re evolving in the
                                                                “Reasonably, there’s
   right direction.”               “Metrics are under           always space for
                                   continual review for         improvements.”
                                   relevance and validity.”



   “We are in the early
   stages - trying to                                            “Working on switching
   tackle one area of our          “We’re still in our search    from vanity metrics to
   operations at a time.”          mode.”                        pirate metrics.”




   “Can’t ever be totally          “Our KPIs are in             “We’re doing our best
   confident, we’re always         significant flux as the      as we remain agile.”
   trying to improve our           company is still in a
   metrics”                        development phase.”



                                                                 “We’re constantly
                                                                 iterating, whilst
    “We are confident that we have some good KPIs but            expanding
    are confident they can always be better. We evolve as        geographically and in
    we learn more.”                                              scale, so it would be
                                                                 hard to ever say ‘yes’.”
SECTION SIX: FINDINGS - DECISION MAKING - METRICS




A cross tabulation analysis of the questions        the group that is not confident that they are
‘Is your organisation confident that it is          measuring the right metrics, also seem to
measuring the right metrics and KPIs?’ and          be less likely to have processes in place
‘Are there any processes in place to make           in ensure that data is understood and
sure that data is understood and acted              acted upon. A third (33%) of respondents
upon?’ is shown below. There is a lack of           answered ‘No’ to both questions.
confidence around data and metrics, and



FIGURE 12: CROSS TABULATION ANALYSIS OF FIGURE 9 AND FIGURE 11.




                                 Are there any processes in place to make sure that data is
                                               understood and acted upon?


                                                              Yes                    No
 Is your organisation
 confident that it is                 Yes                     26%                   26%
 measuring the right
 metrics and KPIs?
                                      No                      16%                   33%




                                                                                                    21
SECTION SIX: FINDINGS - DECISION MAKING - METRICS




FIGURE 13: HOW DOES YOUR ORGANISATION DECIDE WHICH METRICS AND KPIS ARE IMPORTANT?



                                   60%
       PERCENTAGE OF RESPONDENTS




                                   45%




                                   30%




                                   15%




                                   0%

                                     IT IS A COLLABORATIVE        NON-STRUCTURED, KPI’S
                                         PROCESS. EVERYBODY       CHOSEN BY DIFFERENT
                                            CONTRIBUTES           PEOPLE. CASE-TO-CASE

                                                                           BASIS


                                                    TOP LEVEL MANAGEMENT             ONLY SPECIFIC

                                                      MAKES THE DECISION           DEPARTMENTS GET

                                                                                       INVOLVED



Just over half (51%) of respondents embrace                       seems to be an important characteristic
collaborative thinking around metrics.                            of data driven organisations, with 51% of
A quarter (25%) still depend on the top                           respondents deciding their metrics and
management level to define key metrics                            KPIs through a joined-up process. As seen
and 19% have a non-structured/informal                            in the comments provided in Figure 5,
approach to metrics management. The                               responsibility for data gathering and analysis
remaining 5% choose metrics in isolation,                         is often shared among several people in the
potentially by department.                                        organisation, and it therefore makes sense
                                                                  to choose metrics as a team and not in
A collaborative approach to metrics                               isolation.

                                                                                                                   22
SECTION SIX: FINDINGS - DECISION MAKING - METRICS




FIGURE 14: CROSS TABULATION ANALYSIS OF ‘HOW DOES YOUR ORGANISATION DECIDE WHICH
METRICS AND KPIS ARE IMPORTANT?’ AGAINST FIGURE 11: ‘IS YOUR ORGANISATION CONFIDENT
THAT IT IS MEASURING THE RIGHT METRICS AND KPIS?’




                                  Is your organisation confident that it is measuring the right
                                                       metrics and KPIs?


                                                                   Yes                   No


                                    Top-Level
                               management makes                    11%                  14%
                                  the decision



                               It is a collaborative
 How does your                 process. Everybody                  31%                  20%
 organisation decide                contributes.

 which metrics and KPIs
 are important?’              Only specific depart-
                              ments get involved in                2%                    3%
                                 measurement



                             It is non-structured, KPIs
                              are chosen by different
                                people in a case-by-
                                                                   7%                   12%
                                     case basis




Figure 13 shows that respondents who                      only category in which more respondents
choose metrics in a collaborative manner                  answered that they were confident in their
feel more confident about their metrics in                metrics (31%) than those that said they were
comparison to those who do not involve the                not confident (20%).
team. ‘It is a collaborative process’ is the




                                                                                                         23
SECTION SIX: FINDINGS - DECISION MAKING - METRICS




FIGURE 15: WHAT WOULD YOU SAY IS THE TOP CHALLENGE IN CHOOSING THE RIGHT METRICS?
[RESPONDENTS COULD SELECT MORE THAN ONE OPTION]



           UNDERSTANDING THE KEY
           DRIVERS OF THE BUSINESS

       HAVING THE RIGHT TRACKING
                         IN PLACE

             DEFINING PRIORITIES AND
                    BUSINESS GOALS

        HAVING THE RIGHT CONTEXT


   LACK OF SKILLS AND RESOURCES

         HAVING CONSENSUS WITHIN
                THE ORGANIZATION

                                                    0%                  20%                 40%                  60%                  80%



The majority of respondents said that a key                             challenging to identify the key drivers of
challenge in choosing the right metrics to                              the business when, in some cases, the
measure was in understanding what the key                               business model has not been fully defined
drivers of the business are (61%), followed by                          or implemented. However, concentrating
having the right tracking in place (42%) and                            on one key metric can help to minimize
defining priorities and business goals (39%).                           ‘paralysis by analysis’. This is what the
                                                                        authors of Lean analytics call ‘The One
The nature of startups implies that historic                            Metric That Matters’. They explain:
data is not always available, so it is




        “The One Metric That Matters is the one number you’re completely focused on
        above everything else for the stage you’re at. Looking at CLV (customer lifetime
        value) isn’t meaningful when you’re validating a problem, but it might be the right
        metric to focus on as you’re approaching product/market fit. It most certainly is not
        a vanity metric!”



1 “Customer Lifetime Value (CLV) is a formula that helps a marketing manager arrive at the monetary value associated with long term
relationships with any given customer, revealing just how much a customer relationship is worth over a period of time” http://hbsp.
harvard.edu/multimedia/flashtools/cltv/index.html                                                                                           24
SECTION SIX: FINDINGS - DECISION MAKING - METRICS




Having the right context, skills and             crucial as being clear on what the business
consensus seem to be important but not as        direction is.


FIGURE 16: WOULD YOU SAY THAT YOUR ORGANISATION HAS MISSED BUSINESS OPPORTUNITIES IN
THE LAST 12 MONTHS AS A CONSEQUENCE OF NOT HAVING ENOUGH DATA VISIBILITY?



                                     60%
         PERCENTAGE OF RESPONDENTS




                                     45%




                                     30%




                                     15%




                                     0%

                                           YES      MAYBE                  NO



A third (34%) of respondents believe that        enough data visibility.
they have missed business opportunities as
a consequence of not having enough data          There seems to be some inconsistency
visibility, and 47% answered ‘maybe’.            in the perceived effectiveness of
                                                 those mechanisms, and it is clear that
It is interesting to note that respondents       organisations see data collection as almost
who said that their organisations had            unlimited, with many commenting that it
mechanisms to ensure data was acted              is impossible to measure everything,
upon also said that they have, or may have,      so missed business opportunities are
missed business opportunities in the last        somewhat inevitable.
12 months as a consequence of not having


                                                                                               25
6.5: DECISION MAKING - OPTIMISATION




FIGURE 17: HOW OFTEN DOES YOUR ORGANISATION REVISE AND CHANGE ITS METRICS OR KPI FOCUS?



                                     40%
         PERCENTAGE OF RESPONDENTS




                                     30%




                                     20%




                                     10%




                                     0%

                                           WEEKLY   MONTHLY   6 MONTHS       YEARLY      NEVER



Respondents were asked the frequency                          Only once everyone understands the
in which they change their metrics or KPIs                    key metrics, can they collectively work to
focus. 37% said every 6 months, and 27%                       optimise them. The frequency with which
said every month. For startups, the key                       this is done depends on the industry and
metrics for driving revenue, profitability and                service provided by the organisation, but
productivity need to be established and                       revision of metrics and KPIs is important to
understood across the business.                               ensure a business is collecting the right data
                                                              and acting on it.




                                                                                                               26
6.6: DECISION MAKING - CULTURE




FIGURE 18: ARE EMPLOYEES IN YOUR ORGANISATION ENCOURAGED TO BACK UP THEIR DECISION
MAKING WITH DATA?



                                       60%
           PERCENTAGE OF RESPONDENTS




                                       45%




                                       30%




                                       15%




                                       0%

                                             YES, THIS IS                         NO         SOMETIMES

                                              CRUCIAL

                                                             YES, BUT WE ALSO

                                                        BELIEVE IN INTUITION
                                                            AND EXPERIENCE ON

                                                                 ITS OWN



When asked if employees are encouraged                                of the key mantras of the lean startup
to back up their decision making with data,                           methodology is to base all decisions
51% of respondents said that they also                                on metrics, assumptions and validation.
believe in experience and intuition when                              Feelings and intuition are not necessarily
it comes to decision-making. Just over a                              part of the equation. However, as startups
quarter of respondents (27%) said data is                             try to move fast and manage uncertainty,
crucial.                                                              some decisions are inevitably made based
                                                                      on experience and the data availability and
The lean startup and lean analytics                                   gut feelings. The challenge will always be in
community would strongly agree with                                   establishing the right balance.
the latter quarter of respondents. One
                                                                                                                      27
SECTION SIX: FINDINGS - DECISION MAKING - CULTURE




   FIGURE 19: WHAT IS THE BIGGEST CHALLENGE YOU HAVE FACED WHEN BUILDING A DATA DRIVEN
   CULTURE?




  LACK OF RESOURCES FOR THE RIGHT
       DATA COMMUNICATION TOOLS

                 ATTITUDE: DATA NOT
              CONSIDERED A PRIORITY

     DATA OWNERSHIP. UNCLEAR WHO
SHOULD GATHER, ANALYSE AND REPORT

                LACK OF RESOURCE TO
                   INVEST IN TRAINING

  LACK OF CLARITY ABOUT WHAT DATA
        CAN BE DISTRIBUTED OR NOT

         INTERNAL POLITICS. PEOPLE
    REFUSED TO SHARE INFORMATION

                                          0%       10%           20%             30%            40%



   The SaaS data communication industry in         creating a data driven culture. Lack of clarity
   fairly new and even though status boards        was also a challenge; specifically in data
   technology and real time solutions are          ownership (18%) and data distribution issues
   emerging rapidly, the benefits of data          (10%).
   visualization and visibility are still widely
   unknown.                                        In an industry where data is needed to
                                                   analyse performance and rapidly make
   Respondents were asked to select the            changes to remain agile, having the
   biggest challenges they have faced when         resources to invest in data communication
   building a data driven culture. Resources       tools is important, as without the data,
   were a key issue; 37% of respondents said       the drivers of the business cannot be
   that a lack of resources to invest in the       ascertained, and performance cannot be
   right data communication tools was their        improved. The lean startup methodology
   main challenge, with 10% citing a lack of       would advocate that organisations should
   resources to invest in training.                be built on their data, and therefore
                                                   investing in resources for data collection
   A fifth (20%) of respondents blamed             and communication is vital.
   attitudes towards data for difficulties in
                                                                                                      28
THANKS TO EVERYONE WHO RESPONDED TO THE SURVEY.


           COMMENTS OR QUESTIONS - EMAIL SOFIA@GECKOBOARD.COM




                          A global survey on the
                           state of data driven
                          culture within startups




           ©2013 GECKOBOARD/ECONSULTANCY - ALL RIGHTS RESERVED.


NO PART OF THIS PUBLICATION MAY BE REPRODUCED OR TRANSMITTED IN ANY FORM OR BY ANY MEANS,
ELECTRONIC OR MECHANICAL, INCLUDING PHOTOCOPY, RECORDING OR ANY INFORMATION STORAGE AND
        RETRIEVAL SYSTEM, WITHOUT PRIOR PERMISSION IN WRITING FROM THE PUBLISHER.

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Data driven culture in startups (2013 report)

  • 1. A global survey on the state of data driven culture within startups
  • 2. Contents SECTION ONE About Geckoboard 1 SECTION TWO About Econsultancy 2 SECTION THREE Foreword 3 SECTION FOUR Executive Summary 4 SECTION FIVE Methodology 7 Respondent Profiles 7 SECTION SIX Findings 9 Data Driven Culture 9 Data Collection 10 Data Communication 15 Decision Making 19 Metrics 19 Optimisation 26 Culture 27
  • 3. SECTION ONE About Geckoboard Geckoboard is a hosted status board able to better assess that information — with that collects business information from dashboards being the mainstay for how it’s many online services and customers’ own presented and consumed. data sources, summarises it to distil the key messages and displays it in a way 90% of customers have reported that is easy to understand and interpret. improving their decision-making thanks to Businesses use status boards to pull Geckoboard. important information locked up in disparate Since launching in February 2011, services together into one place to give a Geckoboard has picked up some 2,500 real-time status on the health of all aspects customers, including Atlassian, Groupon, of a business. Gdgt, SecondMarket and Stack Exchange. Geckoboard has called itself the “Chartbeat Stop spending time checking services and for everything else” — in reference to the start monitoring your business in real-time. tool used to monitor traffic and other metrics All your information available all the time, at on websites. Geckoboard’s rise speaks a glance. In 30 days, you won’t remember of a growing trend among businesses to how your business ran without it. Get a free consolidate ever-growing lists of diagnostics trial here. and information into simpler views to be 1
  • 4. SECTION TWO About Econsultancy Econsultancy is a global independent decisions, build business cases, find the community-based publisher, focused best suppliers, accelerate their careers and on best practice digital marketing and lead the way in best practice and innovation. ecommerce, and used by over 400,000 internet professionals every month. Econsultancy has offices in London, New York, Singapore and Sydney,and we are a Our hub has 185,000+ subscribers leading provider of digital marketing training worldwide from clients, agencies and and consultancy. We trained over 5,000 suppliers alike with over 90% subscriber marketers and ran over 200 public training retention rate. We help our subscribers build courses in 2012. their internal capabilities via a combination of research reports and how-to guides, Join Econsultancy today to learn what’s training and development, consultancy, happening in digital marketing – and what face-to-face conferences, forums and works. professional networking. Call us to find out more on +44 (0)20 7269 For the last 10 years, our resources have 1450 (London) or +1 212 971 0630 (New York). helped subscribers learn, make better You can also contact us online. 2
  • 5. SECTION THREE Foreword Geckoboard is pleased to present the data, how metrics are being chosen, results of the first Global Report on Data how resources are being assigned, the Driven Culture Within Startups, which was importance of data visibility and the most designed to offer insights on how startups popular tools for data communication. are dealing with an ever growing influx of data and the key challenges faced when The report reveals that businesses are, building organisations that embrace data as in general, actively looking to improve much as intuition. their efforts towards building a data driven culture. So far, most of the efforts have been Data driven decision-making has been made in data gathering and analytics, with fuelled by terms like ‘Lean Startup’ and very little progress in data communication ‘Lean Analytics’. Eric Ries coined the term and mechanisms to ensure that data is acted ‘lean startup’ in 2008 and since then, it has upon. Surprisingly, most respondents do grown in popularity among entrepreneurs. not feel confident about their KPIs and their The term has now become a movement that current challenge is to understand what the has brought innovative thinking around how key drivers of the business are, to ensure to design, build and develop sustainable that they build the right context for data businesses based on customer feedback. analysis. As the lean movement evolves, the We hope that you find the results of this emphasis on data driven decision-making survey to be informative, and thank you becomes more relevant. This report offers again to those who participated. We look an overview on how startups are using forward to your participation in the future. 3
  • 6. SECTION FOUR Executive Summary This report explores the general attitude of startups towards metrics and data communication. It offers an overview on: 1 How startups are gathering, analysing and communicating data. 2 How much time and resources are spent on analytics. 3 What challenges are involved in building a data driven culture and monitoring the right metrics. 4 Data visibility and its impact on decision-making. This report is based on a global survey of 368 startups carried out by Geckoboard and Econsultancy. We would like to thank all the organisations that took part in the survey and those who contributed with insights, analysis and valuable comments. 4
  • 7. SECTION FOUR: EXECUTIVE SUMMARY The findings of this research can be summarised as follows: The vast majority of respondents Metrics democracy. In more cases than identified themselves as data driven not, respondents who choose metrics in a businesses; only 5% of respondents collaborative manner felt more confident stated that data is not a priority within their about their metrics in comparison to those organisation. who do not involve the team. Intuition is still highly valued in decision- Data vs. Data communication: 44% of making. Despite the rapid adoption startups spend substantially more on data and evangelisation of the lean startup gathering than on data communication, methodology (see Section 3) and the with 34% of respondents spending equally constant emphasis on data collection and on both. This highlights the importance of measurement within the startup community, developing mechanisms to guarantee that it is surprising to find that intuition and data is collected with a purpose and that experience are still heavy components of key insights can be derived from it. The the decision-making process. Only 27% improvement of data communication can of respondents believe that data is crucial lead to a better understanding of what is when it comes to decision-making. important to measure and what is not. There is a marked lack of confidence around data and metrics. Almost half of the respondents (49%) do not feel confident about the metrics they are currently “If you can't explain monitoring. Based on analysis of data it simply, you don't gathered in this report, this group is also less likely to have processes in place to understand it well ensure that data is understood and acted enough.” upon. ALBERT EINSTEIN 5
  • 8. SECTION FOUR: EXECUTIVE SUMMARY The survey also showed that real time data and dashboards are increasingly being adopted by startups as a communication tool although traditional formats like Excel are still the most popular. Despite the investment on tracking, data gathering and analytics, 59% of respondents do not have processes in place to make sure data is understood and acted upon. 6
  • 9. SECTION FIVE Methodology This report is based on a global survey of Econsultancy also promoted the survey via 368 business professionals working in the social media. The incentive for taking part in startup community, but also included larger the survey was a complimentary copy of the businesses so that general attitudes towards report. data management were represented. The survey was live during January and February If you have any questions about the 2013. research and methodology, please email Sofia Quintero at Geckoboard (sofia@ Geckoboard promoted the survey to its geckoboard.com). customer data base and via social media. 5.1 RESPONDENT PROFILES A total of 368 business professionals took the United Kingdom are also significantly part in the survey. The greatest proportion represented. of respondents work in the internet/software industry (42%), though a range of other The following chart shows that the industries are represented. survey respondents are typically senior within their organisations, with over 70% Respondent organisations are primarily classifying themselves as founders, CTOs, based in North America, although Asia, Latin CEOs, directors, or presidents of their America, Western Europe and specifically organisations. 7
  • 10. FIGURE 1: WHAT IS YOUR POSITION IN THE ORGANISATION? FOUNDER / CEO FOUNDER / CTO OTHER DIRECTOR DEVELOPER MANAGER ANALYTICS EXECUTIVE MANAGER MARKETING PRESIDENT ADMIN / SUPPORT 0% 10% 20% 30% 40% The aim of the survey was to look at the Figure 2 shows the size of the responding attitude of startups towards data collection companies. More than 80% of responding and analysis; therefore the survey was companies have less than 100 employees, marketed towards respondents from reflecting the startup focus of the report. companies with less than 20 employees. FIGURE 2: WHAT IS THE SIZE OF YOUR ORGANISATION? 30 NUMBER OF RESPONDENTS 23 16 9 2 1-4 5-9 10-19 20-99 100- 500- 10,000+ 499 9,999 NUMBER OF EMPLOYEES 8
  • 11. SECTION SIX Findings 6.1 DATA DRIVEN CULTURE Definition: A ‘Data Driven Organisation’ is uses technology to communicate data one that cultivates a culture where data is in a clear and approachable way. In this valued as much as intuition and experience; kind of organisation, decision-making is a where data is visible and accessible to collaborative process and metrics are set everybody. A data driven organisation based on very specific business goals. FIGURE 3: BASED ON THE DEFINITION ABOVE, WOULD YOU CONSIDER YOUR ORGANISATION TO BE DATA DRIVEN? Yes 26% - since the very beginning we made sure data was part of our culture No 7% - this is not a priority in my organisation; only management make decisions Yes 44% - we have made great improvement and are still working on it 9
  • 12. SECTION SIX: FINDINGS - DATA DRIVEN CULTURE Figure 3 shows that the majority of this area. A total of 70% of respondents respondents not only understand the consider their organisation to be data- importance of building a data driven driven, with only 7% of respondents culture, but are also proactively looking into believing that being data driven is not a mechanisms that will allow them to improve priority. 6.2 DATA COLLECTION As the industry moves forwards with new ever growing data points available to technologies able to track data in very organisations, the illusion of having all the granular and sophisticated ways, there data needed in order to make decisions is also a need for simplification. With starts to blur with information overload. FIGURE 4: TO YOUR BEST KNOWLEDGE, HOW MANY THIRD PARTY SERVICES OR SYSTEMS DOES YOUR ORGANISATION CURRENTLY USE TO GATHER DATA? 60% PERCENTAGE OF RESPONDENTS 45% 30% 15% 0% 1-4 4-9 10+ DON’T KNOW NUMBER OF SERVICES 10
  • 13. SECTION SIX: FINDINGS - DATA COLLECTION Nearly a fifth (18%) of respondents in the assessment of business performance. survey said that they used more than 10 Google Analytics alone offers over 200 different services to gather data, revealing pre-defined dimensions and metrics to the wealth of data that can be collected. The choose from and combine. Choosing the list of potential metrics available to decision right metrics within the right context is one makers represents a constant challenge of the most crucial tasks for data driven when it comes to executing a focused organisations. FIGURE 5: HOW MANY FULL TIME EMPLOYEES DOES YOUR COMPANY CURRENTLY HAVE WORKING ON DATA GATHERING, ANALYSIS AND DISTRIBUTION ROLES? 60% PERCENTAGE OF RESPONDENTS 45% 30% 15% 0% 1-4 4-9 10+ NONE NUMBER OF EMPLOYEES 77% of respondents have at least one full- and analysis. time employee working on data gathering 11
  • 14. SECTION SIX: FINDINGS - DATA COLLECTION Figure 6 shows the number of employees employees, however also reveals that a working on data, against the size of surprisingly large proportion of respondents the company. As expected, the larger have no employees working on data, even organisations are more likely to have a in organisations with up to 100 employees. higher number of data-dedicated FIGURE 6: THE NUMBER OF EMPLOYEES FOCUSED ON DATA, CHARTED BY THE TOTAL NUMBER OF EMPLOYEES IN THE ORGANISATION. 60% 45% 30% 15% 0% 1-4 5-9 10-19 20-99 100-499 500- 10,000 9,999 SIZE OF ORGANSIATION (EMPLOYEES) BETWEEN 1-5 BETWEEN 5-10 10+ NONE Based on respondents’ comments data of data-focused employees, with it being collection and analysis is not always the part of the role of many, but the sole role responsibility of a dedicated staff member, of none. It is evident that software is also being a shared responsibility across multiple relied upon by many respondents to do teams and with roles extended to include the data gathering and analysis, but many data management. This could affect how organisations assign no specific person to respondents were counting the number pull insights from this analysis. 12
  • 15. SECTION SIX: FINDINGS - DATA COLLECTION RESPONDENT COMMENTS: ‘HOW MANY FULL-TIME EMPLOYEES DOES YOUR COMPANY CURRENTLY HAVE WORKING ON DATA GATHERING, ANALYSIS AND DISTRIBUTION ROLES? “I do product, and “There is no dedicated “This is distributed one other guy does staff – it is a shared across the team.” core-business metrics.” responsibility.” “One person “We can’t afford a “Support and Services is delegated salary of £35k+ to focus on customer responsibility and analyse our data; data and our software accountability for this. many of us have itself is geared However, it is not a managed people and towards data analysis full-time equivalent roles which do this and gathering.” aspect.” kind of work. We have extended our roles to do this, as this will drive decisions in the company.” “Right now I am the only person. I am using software to try to do automatically, such as the integrations with Sugar CRM and other apps to help do auto tracking.” 13
  • 16. SECTION SIX: FINDINGS - DATA COLLECTION FIGURE 7: WHAT IS THE BALANCE BETWEEN RESOURCES SPENT IN GATHERING DATA (BIG DATA) AND COMMUNICATING DATA (REAL TIME METRIC DASHBOARDS, REPORTS)? 44% - We spend 34% - We spend equally substantially more in data on both gathering 22% - We spend substantially more in data communication Data gathering rather than data 34% of respondents put equal emphasis in communication seems to be the priority both processes. Data becomes irrelevant among startups with 44% of respondents if organisations cannot make sense of it or spending more on data gathering. Only communicate insights clearly throughout the 22% put more emphasis on how data is organisation. communicated. It is surprising that only 14
  • 17. 6.3 DATA COMMUNICATION FIGURE 8: WHAT IS THE MOST COMMON FORMAT FOR DATA COMMUNICATION IN YOUR ORGANISATION? 6% - Other 32% - Dashboards or real time display technology 8% - Powerpoint presentations 24% - Reports exported directly from third party systems and applications 30% - Excel Spreadsheets Excel spreadsheets and dashboards are to share data among teams are: Google seen to be the preferred tools used to Docs, Trello and proprietary tools and share data within organisations. Real-time dashboards. technology has been rapidly gaining in popularity among startups due to its ability Given the volume of metrics that can to rapidly show data, which is vital in a be tracked and gathered, it is crucial business as agile and changeable as a for startups to find appropriate tools to startup. communicate that data and make sure it is understood throughout the organisation, Based on comments provided by and, vitally, that it is acted upon. respondents, other tools and formats used 15
  • 18. SECTION SIX: FINDINGS - DATA COMMUNICATION FIGURE 9: ARE THERE ANY PROCESSES IN PLACE TO MAKE SURE THAT DATA IS UNDERSTOOD AND ACTED UPON? 60% PERCENTAGE OF RESPONDENTS 45% 30% 15% 0% YES NO Respondents were asked if they had any that data is understood and actionable. processes in place to make sure that data is understood and acted upon; the majority Below are some examples of processes answered no. It is surprising to find that even given by responding companies. Meetings though 70% of the respondents consider and verbal discussions are popular to their organisations to be data driven, the decipher data, with dashboards and KPIs same organisations are also typically also used to prompt discussion and reviews. currently lacking mechanisms to make sure 16
  • 19. SECTION SIX: FINDINGS - DATA COMMUNICATION RESPONDENT COMMENTS: ‘ARE THERE ANY PROCESSES IN PLACE TO MAKE SURE THAT DATA IS UNDER- STOOD AND ACTED UPON?’ “Analysts and managers “Bonuses based on key “Creation of a data review reports.” metrics” warehouse” “Trending service usage “Verbal report out, each “Custom dashboard” prompts management section is discussed for review.” clarity” “Tied directly to feature releases, watching “We are looking at “Weekly meetings to metrics move, metric- dashboards to make comment on metrics driven goals, etc.” data accessible” (founders and investors); benchmarking cross- portfolio” “We write blog posts. We set OKRs (objectives and key results) that are basically hypotheses that require data to prove them (or disprove them) within a set period of time.” 17
  • 20. SECTION SIX: FINDINGS - DATA COMMUNICATION Figure 9 shows a chart of the data in Figure It may be the case that these companies 8, combined with data from the question: analyse their data in a more fluid way, in ‘Would you consider your organisation to meetings and ad hoc by individuals, rather be data driven?’ (Figure 3). It is interesting to than having stringent processes in place see that 12% of respondents said that their for acting upon data. Due to the nature of a organisations were data driven, and had startup, these processes may not have yet been since the very beginning, but at the been put in place, but the case may be that same time did not have any processes in in some companies a lot of data is being place to make sure that data is understood collected, without much meaningful insight and acted upon. being gained from it. FIGURE 10: CROSS TABULATION ANALYSIS OF ‘WOULD YOU CONSIDER YOUR ORGANISATION TO BE DATA DRIVEN?’ (FIGURE 3), AGAINST FIGURE 9: ‘ARE THERE ANY PROCESSES IN PLACE TO MAKE SURE THAT DATA IS UNDERSTOOD AND ACTED UPON?’ Are there any processes in place to make sure that data is understood and acted upon? Yes No No, but we are mobilizing resources and efforts to improve 8% 15% in this area No, this is not a priority in my Would you consider organization; only 1% 4% management your organisation to makes decisions be data driven? Yes, we have made great improvements and 19% 27% are still working on it Yes, since the very beginning we made sure data was part of our 13% 12% culture 18
  • 21. 6.4 DECISION MAKING - METRICS FIGURE 11: IS YOUR ORGANISATION CONFIDENT THAT IT IS MEASURING THE RIGHT METRICS AND KPIS? 60% PERCENTAGE OF RESPONDENTS 45% 30% 15% 0% YES NO Almost half of the respondents do not 61% of respondents said that the key feel confident about the metrics they are challenge in choosing the right metrics tracking. When viewed in the context of was in understanding the key drivers of a startup culture, these results are not all the business. Uncertainty is at the core of that surprising. Most of the respondent startups so being flexible to test and try comments on this question are around the different approaches to measurement is need to be flexible and open minded to more a survival practice than an option. changes. It is part of the lean startup culture to avoid making assumptions without having Comments from the survey respondents a way to prove them. Being confident supported this theory, with many stating that about the current metrics could be, to they were still evolving and that there was some companies, like declaring that the always more data that they could look at. organisation has stopped learning. Agility is a key requirement for startups, with changing metrics being part of learning and This is also reflected in Figure 11, where evolving for the benefit of the business. 19
  • 22. SECTION SIX: FINDINGS - DECISION MAKING - METRICS RESPONDANT COMMENTS: ‘IS YOUR ORGANISATION CONFIDENT THAT IT IS MEASURING THE RIGHT METRICS AND KPIS?’ “We could always “You never can be sure “I’d say yes... but always measure more!!” until enough data has learning new ones. So arrived and fine-tuning is 75% confident.” always needed.” “At least confident that we’re evolving in the “Reasonably, there’s right direction.” “Metrics are under always space for continual review for improvements.” relevance and validity.” “We are in the early stages - trying to “Working on switching tackle one area of our “We’re still in our search from vanity metrics to operations at a time.” mode.” pirate metrics.” “Can’t ever be totally “Our KPIs are in “We’re doing our best confident, we’re always significant flux as the as we remain agile.” trying to improve our company is still in a metrics” development phase.” “We’re constantly iterating, whilst “We are confident that we have some good KPIs but expanding are confident they can always be better. We evolve as geographically and in we learn more.” scale, so it would be hard to ever say ‘yes’.”
  • 23. SECTION SIX: FINDINGS - DECISION MAKING - METRICS A cross tabulation analysis of the questions the group that is not confident that they are ‘Is your organisation confident that it is measuring the right metrics, also seem to measuring the right metrics and KPIs?’ and be less likely to have processes in place ‘Are there any processes in place to make in ensure that data is understood and sure that data is understood and acted acted upon. A third (33%) of respondents upon?’ is shown below. There is a lack of answered ‘No’ to both questions. confidence around data and metrics, and FIGURE 12: CROSS TABULATION ANALYSIS OF FIGURE 9 AND FIGURE 11. Are there any processes in place to make sure that data is understood and acted upon? Yes No Is your organisation confident that it is Yes 26% 26% measuring the right metrics and KPIs? No 16% 33% 21
  • 24. SECTION SIX: FINDINGS - DECISION MAKING - METRICS FIGURE 13: HOW DOES YOUR ORGANISATION DECIDE WHICH METRICS AND KPIS ARE IMPORTANT? 60% PERCENTAGE OF RESPONDENTS 45% 30% 15% 0% IT IS A COLLABORATIVE NON-STRUCTURED, KPI’S PROCESS. EVERYBODY CHOSEN BY DIFFERENT CONTRIBUTES PEOPLE. CASE-TO-CASE BASIS TOP LEVEL MANAGEMENT ONLY SPECIFIC MAKES THE DECISION DEPARTMENTS GET INVOLVED Just over half (51%) of respondents embrace seems to be an important characteristic collaborative thinking around metrics. of data driven organisations, with 51% of A quarter (25%) still depend on the top respondents deciding their metrics and management level to define key metrics KPIs through a joined-up process. As seen and 19% have a non-structured/informal in the comments provided in Figure 5, approach to metrics management. The responsibility for data gathering and analysis remaining 5% choose metrics in isolation, is often shared among several people in the potentially by department. organisation, and it therefore makes sense to choose metrics as a team and not in A collaborative approach to metrics isolation. 22
  • 25. SECTION SIX: FINDINGS - DECISION MAKING - METRICS FIGURE 14: CROSS TABULATION ANALYSIS OF ‘HOW DOES YOUR ORGANISATION DECIDE WHICH METRICS AND KPIS ARE IMPORTANT?’ AGAINST FIGURE 11: ‘IS YOUR ORGANISATION CONFIDENT THAT IT IS MEASURING THE RIGHT METRICS AND KPIS?’ Is your organisation confident that it is measuring the right metrics and KPIs? Yes No Top-Level management makes 11% 14% the decision It is a collaborative How does your process. Everybody 31% 20% organisation decide contributes. which metrics and KPIs are important?’ Only specific depart- ments get involved in 2% 3% measurement It is non-structured, KPIs are chosen by different people in a case-by- 7% 12% case basis Figure 13 shows that respondents who only category in which more respondents choose metrics in a collaborative manner answered that they were confident in their feel more confident about their metrics in metrics (31%) than those that said they were comparison to those who do not involve the not confident (20%). team. ‘It is a collaborative process’ is the 23
  • 26. SECTION SIX: FINDINGS - DECISION MAKING - METRICS FIGURE 15: WHAT WOULD YOU SAY IS THE TOP CHALLENGE IN CHOOSING THE RIGHT METRICS? [RESPONDENTS COULD SELECT MORE THAN ONE OPTION] UNDERSTANDING THE KEY DRIVERS OF THE BUSINESS HAVING THE RIGHT TRACKING IN PLACE DEFINING PRIORITIES AND BUSINESS GOALS HAVING THE RIGHT CONTEXT LACK OF SKILLS AND RESOURCES HAVING CONSENSUS WITHIN THE ORGANIZATION 0% 20% 40% 60% 80% The majority of respondents said that a key challenging to identify the key drivers of challenge in choosing the right metrics to the business when, in some cases, the measure was in understanding what the key business model has not been fully defined drivers of the business are (61%), followed by or implemented. However, concentrating having the right tracking in place (42%) and on one key metric can help to minimize defining priorities and business goals (39%). ‘paralysis by analysis’. This is what the authors of Lean analytics call ‘The One The nature of startups implies that historic Metric That Matters’. They explain: data is not always available, so it is “The One Metric That Matters is the one number you’re completely focused on above everything else for the stage you’re at. Looking at CLV (customer lifetime value) isn’t meaningful when you’re validating a problem, but it might be the right metric to focus on as you’re approaching product/market fit. It most certainly is not a vanity metric!” 1 “Customer Lifetime Value (CLV) is a formula that helps a marketing manager arrive at the monetary value associated with long term relationships with any given customer, revealing just how much a customer relationship is worth over a period of time” http://hbsp. harvard.edu/multimedia/flashtools/cltv/index.html 24
  • 27. SECTION SIX: FINDINGS - DECISION MAKING - METRICS Having the right context, skills and crucial as being clear on what the business consensus seem to be important but not as direction is. FIGURE 16: WOULD YOU SAY THAT YOUR ORGANISATION HAS MISSED BUSINESS OPPORTUNITIES IN THE LAST 12 MONTHS AS A CONSEQUENCE OF NOT HAVING ENOUGH DATA VISIBILITY? 60% PERCENTAGE OF RESPONDENTS 45% 30% 15% 0% YES MAYBE NO A third (34%) of respondents believe that enough data visibility. they have missed business opportunities as a consequence of not having enough data There seems to be some inconsistency visibility, and 47% answered ‘maybe’. in the perceived effectiveness of those mechanisms, and it is clear that It is interesting to note that respondents organisations see data collection as almost who said that their organisations had unlimited, with many commenting that it mechanisms to ensure data was acted is impossible to measure everything, upon also said that they have, or may have, so missed business opportunities are missed business opportunities in the last somewhat inevitable. 12 months as a consequence of not having 25
  • 28. 6.5: DECISION MAKING - OPTIMISATION FIGURE 17: HOW OFTEN DOES YOUR ORGANISATION REVISE AND CHANGE ITS METRICS OR KPI FOCUS? 40% PERCENTAGE OF RESPONDENTS 30% 20% 10% 0% WEEKLY MONTHLY 6 MONTHS YEARLY NEVER Respondents were asked the frequency Only once everyone understands the in which they change their metrics or KPIs key metrics, can they collectively work to focus. 37% said every 6 months, and 27% optimise them. The frequency with which said every month. For startups, the key this is done depends on the industry and metrics for driving revenue, profitability and service provided by the organisation, but productivity need to be established and revision of metrics and KPIs is important to understood across the business. ensure a business is collecting the right data and acting on it. 26
  • 29. 6.6: DECISION MAKING - CULTURE FIGURE 18: ARE EMPLOYEES IN YOUR ORGANISATION ENCOURAGED TO BACK UP THEIR DECISION MAKING WITH DATA? 60% PERCENTAGE OF RESPONDENTS 45% 30% 15% 0% YES, THIS IS NO SOMETIMES CRUCIAL YES, BUT WE ALSO BELIEVE IN INTUITION AND EXPERIENCE ON ITS OWN When asked if employees are encouraged of the key mantras of the lean startup to back up their decision making with data, methodology is to base all decisions 51% of respondents said that they also on metrics, assumptions and validation. believe in experience and intuition when Feelings and intuition are not necessarily it comes to decision-making. Just over a part of the equation. However, as startups quarter of respondents (27%) said data is try to move fast and manage uncertainty, crucial. some decisions are inevitably made based on experience and the data availability and The lean startup and lean analytics gut feelings. The challenge will always be in community would strongly agree with establishing the right balance. the latter quarter of respondents. One 27
  • 30. SECTION SIX: FINDINGS - DECISION MAKING - CULTURE FIGURE 19: WHAT IS THE BIGGEST CHALLENGE YOU HAVE FACED WHEN BUILDING A DATA DRIVEN CULTURE? LACK OF RESOURCES FOR THE RIGHT DATA COMMUNICATION TOOLS ATTITUDE: DATA NOT CONSIDERED A PRIORITY DATA OWNERSHIP. UNCLEAR WHO SHOULD GATHER, ANALYSE AND REPORT LACK OF RESOURCE TO INVEST IN TRAINING LACK OF CLARITY ABOUT WHAT DATA CAN BE DISTRIBUTED OR NOT INTERNAL POLITICS. PEOPLE REFUSED TO SHARE INFORMATION 0% 10% 20% 30% 40% The SaaS data communication industry in creating a data driven culture. Lack of clarity fairly new and even though status boards was also a challenge; specifically in data technology and real time solutions are ownership (18%) and data distribution issues emerging rapidly, the benefits of data (10%). visualization and visibility are still widely unknown. In an industry where data is needed to analyse performance and rapidly make Respondents were asked to select the changes to remain agile, having the biggest challenges they have faced when resources to invest in data communication building a data driven culture. Resources tools is important, as without the data, were a key issue; 37% of respondents said the drivers of the business cannot be that a lack of resources to invest in the ascertained, and performance cannot be right data communication tools was their improved. The lean startup methodology main challenge, with 10% citing a lack of would advocate that organisations should resources to invest in training. be built on their data, and therefore investing in resources for data collection A fifth (20%) of respondents blamed and communication is vital. attitudes towards data for difficulties in 28
  • 31. THANKS TO EVERYONE WHO RESPONDED TO THE SURVEY. COMMENTS OR QUESTIONS - EMAIL SOFIA@GECKOBOARD.COM A global survey on the state of data driven culture within startups ©2013 GECKOBOARD/ECONSULTANCY - ALL RIGHTS RESERVED. NO PART OF THIS PUBLICATION MAY BE REPRODUCED OR TRANSMITTED IN ANY FORM OR BY ANY MEANS, ELECTRONIC OR MECHANICAL, INCLUDING PHOTOCOPY, RECORDING OR ANY INFORMATION STORAGE AND RETRIEVAL SYSTEM, WITHOUT PRIOR PERMISSION IN WRITING FROM THE PUBLISHER.