All too often, struggling start-ups lull themselves into a false sense of security with vanity metrics, says Watson.
“Vanity metrics are where you fool yourself into thinking everything’s going well,” he says.
Dave Kuhn, who co-founded Chorus with Dave Trindall in late 2010, admits he fell into this trap.
“Our product helped to rapidly identify the most volatile customers and flag them for immediate attention so as to limit the collateral damage to brand and reputation,” Kuhn says.
“After attending a talk at 500 Startups by Hiten Shah, CEO and founder of KISSmetrics, titled ‘Metrics that Matter’, I was challenged to start looking at our numbers.
“We’d been gauging success on the number of signups that we were able to gather. This is a prime example of what’s called a vanity metric because it lacks actionable insights.
“We realised that our retention numbers sucked and nobody was referring us. Desperate for reasons, we surveyed our beta customers, which revealed what we already felt in our guts for the last six months.
“Our customers didn’t consider the problem we were solving to be a burning issue and hence considered our product a ‘nice to have’.
“It was at that point we decided continuing was pointless. No B2B business can survive selling a ‘nice to have’.”
Menon says it was difficult to walk away from Moojive.
“It’s tough walking away from something you worked on or thought about practically every waking moment for almost a year,” he says.
“But as an entrepreneur it is essential to remain objective and know when it’s time. One should not confuse passion with addiction.
“As a founder you should be passionate about the product but you need to be always mindful of the metrics and ensure that you don’t spend years on something that is not viable.”
While it was tough for Menon to see Moojive fold, he learnt a bunch of lessons.
“Metrics, as in numbers, are essential for any start-up. Always have a list of key metrics you will use to measure growth,” he says.
“Do market research. As a founder we are all passionate about our products but we need to know what our customers think. Get out there and talk to people.
“Get to the market quickly. Identify your MVP, build and release. Don’t spend six months building the ‘perfect’ product.
“Finally, network, leverage any connections to the start-up community and try to learn from other people’s experiences.”
Rather than crawl into a corner and never emerge, both Menon and Kuhn have made a point of redirecting their energy towards other start-up projects, proving there is indeed life after death.
While Menon is prototyping a few different ideas for his next start-up, Kuhn has launched tubes.io, a scalable web scraping and automation platform.
“We turn web pages into data feeds, which our customers use for everything from lead generation to competitive analysis,” he says.
“The end is only the beginning of the next adventure.”
