"The Only Metric That Matters: Lessons from Twitter, Viaweb, and Y Combinator"

"The Only Metric That Matters: Lessons from Twitter, Viaweb, and Y Combinator"

In the world of tech startups and entrepreneurship, metrics and data play a crucial role in measuring success and growth. However, not all metrics are created equal. Some metrics may seem important on the surface but fail to capture the true essence of user engagement and product value. In this article, we will explore the concept of the only metric that matters, drawing insights from experiences at Twitter, Viaweb, and Y Combinator.

At Twitter, the team discovered that the number of times users visited the platform in a month was a strong indicator of their future engagement. If someone visited Twitter at least seven times in a month, it was highly likely they would continue to use the platform in the following month. This revelation shifted the focus from simply counting the number of users to understanding their behaviors and motivations. It became essential to track how many people were actively using Twitter's features, such as reading tweets or tweeting, rather than just passively being on the platform.

Similarly, at LinkedIn, the team realized the importance of measuring user actions that aligned with the core purpose of the platform. Instead of fixating on the total number of users, they shifted their attention to two key metrics: the number of people using LinkedIn to search for and find others, and the number of people being viewed on LinkedIn. These metrics provided a more accurate reflection of the platform's value and demonstrated how users were actively engaging with the product.

These examples highlight the need to identify and define the metrics that truly reflect user engagement and product success. By focusing on metrics that align with the core purpose of the product, companies can track their growth more effectively on a day-to-day, week-over-week, and month-over-month basis.

In addition to understanding the importance of metrics, it is crucial to recognize the significance of working on projects that may not be prestigious but hold great potential. Paul Graham, the co-founder of Viaweb and Y Combinator, emphasizes the idea that the low end often eats the high end. Being the entry-level option might not be as prestigious, but it can lead to long-term success by capturing a larger market share. Prestige can be a danger sign, as it often distracts from the true value and potential of a project. Instead of seeking prestige, it is essential to focus on the inherent value and the opportunity to make a real impact.

Moreover, Graham shares his personal experience of working on projects that were not initially prestigious but eventually proved to be groundbreaking. Viaweb and Y Combinator were considered unimpressive when they started, but they went on to revolutionize the e-commerce and startup ecosystem, respectively. This observation highlights the significance of pursuing work that genuinely interests and motivates individuals, regardless of its current level of prestige. It is a sign that there may be untapped potential and a unique opportunity to make a meaningful contribution.

To further illustrate the power of pursuing less prestigious work, Graham explains how his trick for writing essays involved giving talks. The prospect of presenting valuable information to an audience served as a great motivator for generating imaginative ideas. When he was asked to give a talk about starting a startup at the Harvard Computer Society, Graham saw it as an opportunity to share his experiences and possibly help others avoid the mistakes he had made. This example emphasizes the importance of seeking opportunities to share knowledge and insights, even if they may not seem prestigious at first glance.

Building a supportive community plays a significant role in the journey of entrepreneurship. Graham recognized the value of creating a close-knit community of startup founders, which is now a central aspect of Y Combinator. By bringing together founders in a batch format, Y Combinator solved the problem of isolation that many entrepreneurs face. Founders not only had colleagues but also individuals who understood and could provide valuable advice on the challenges they were encountering. This sense of community and shared experiences fostered growth and accelerated learning.

As Graham delves into the establishment of Y Combinator and the development of Hacker News, he emphasizes the importance of adaptability and addressing the problems that arise. Y Combinator's work was driven by the problems faced by the startups in each batch. This approach allowed for a diverse range of challenges and solutions, enabling accelerated learning and understanding of the startup ecosystem. Similarly, Hacker News, originally intended to be a news aggregator for startup founders, evolved to cater to a broader audience interested in intellectual curiosity. These examples highlight the need to remain flexible and responsive to the evolving needs of the target audience.

In conclusion, the concept of the only metric that matters serves as a guiding principle for measuring user engagement and product success. By focusing on metrics that align with the core purpose of the product, companies can accurately track their growth and make informed decisions. Additionally, pursuing work that may not be prestigious but holds potential can lead to groundbreaking innovations and long-term success. Building a supportive community and remaining adaptable are crucial elements in the journey of entrepreneurship.

Actionable advice:

• 1. Define metrics that truly reflect user engagement and product value. Shift the focus from counting users to understanding their behaviors and motivations.

• 2. Embrace the potential of less prestigious projects. Look beyond external validation and focus on the inherent value and opportunity for impact.

• 3. Foster a supportive community of like-minded individuals. Surround yourself with colleagues and mentors who understand the challenges you face and can provide valuable insights and advice.

In the world of tech startups, success lies in finding the metrics that truly matter, pursuing unorthodox projects, and building a supportive community. By embracing these principles, entrepreneurs can chart their path to growth and make a lasting impact in their respective industries.