How to Measure User Traction

This post is part of a series that I’m doing to respond directly to reader questions.

Today’s question is: “How do I get early traction, and then how do I follow that up?”

I’m not a marketing expert or a growth expert, so I could say something smart like “Build a product that people love”, but I’m going to answer the question slightly differently than what the reader probably intended.

There’s a corollary to the above question that I would ask, which is: “How do you know when you have traction?”  That’s the question I’m going to address in this post because it’s closer to my sweet spot.

Here are some tools and concepts you MUST understand in order to be successful with measuring your user’s activity:

• Understand what your funnel is. You can’t operate any app (web or mobile) without having this clearly defined. And, you can’t clearly define your funnel until you’ve clearly define what success looks like for your app. Every single investor will want you to fully understand your sales funnel and how you track it. This is table stakes in the technology product game.
• Once you’ve articulated your funnel, implement funnel measurement tools. If you’re using a web app, the standard is Google Analytics. You can also use tools like Optimizely to refine your experiments. If you’re using a mobile app, you can use tools like MixPanel (which also works for web) or there’s an open source tool called Piwik.
• Regardless of tool, you’re going to want to instrument your application heavily. Generally speaking, that means creating these things called Events that keep track of what a user’s doing. For example, when a user creates an account on your app, that’s an event. When they click / touch the next thing after logging in, that’s an event. As you create these events in your application, you’ll then be able to tell exactly what your users are doing and where they’re falling out of your funnel.
• Identify and patch the holes in your bucket. Every app has places where users fall out of the process. These are called holes in the bucket, and it’s where your business eventually wins or loses because those holes represent, at some point, revenue. If you leak revenue (either directly or indirectly), you lose.

Tying this all back to the question of traction, once you’ve instrumented your application, you can then measure traction. If you’ve not taken the time to instrument your application, you’re not ready to have a serious discussion about getting traction, because all evidence will be anecdotal at best.