12/30: Top Five Product Success Metrics
We struggle with measuring product success generally.
Let’s be honest: most product folks have no background in statistics, math, or data.
Very few come to the job with knowledge of experimentation frameworks, A/B or multivariate testing, or hypothesis-driven development. A lot of folks learn this on the job.
Even fewer have experience with the business side of things. So how do we establish product success metrics? The answer is, as always, in collaboration.
There is no such thing as “the top 5 metrics” for product success. Because every product is different.
What is, however, important is to understand the difference between business and product metrics. Business metrics are sometimes called lagging indicators, while their product counterpart are leading indicators.
For example, in a SaaS company, revenue is a lagging indicator. But number of signups can be a leading indicator that leads to revenue. While signups can be tracked quickly, revenue might take longer to materialize, depending on your model. You might have a freemium product version that ultimately leads some users to pay for a higher tier.
The point here is that success metrics are product- and context-specific.
And the right way to figure out what they are is to talk to your cross-functional partners, and test a variety of approaches to determine what truly drives user and business value.