Startup Dashboards and How to Create One
Imagine driving a car without a dashboard. It can be done, but at what cost? No speedometer might cost you a few tickets. You also wouldn’t have a fuel gauge. So, you could end up paying tow trucks bills too. The the list goes on. Thankfully, most cars have dashboards. However, many startups don’t.
Launching a startup without a dashboard is like driving a car without one. Except, launching without a startup dashboard is way more costly. So, why do so many founders do it?
My guess is because some think it’s too hard or too time consuming to create a startup dashboard. Well it’s not. You can create a startup dashboard quickly and it isn’t very hard. In this article, I’ll outline how.
What is a startup dashboard?
A startup dashboard is a tool for tracking key business metrics in one place. The idea is to make monitoring your metrics easy. Here are examples of some things you might monitor:
– cash burn rate
– new customer costs
– new user totals
– new customers
– average sale size
– customer attrition
– feature usage
– average time to purchase
There are a lot more things you could track. Just make sure your startup dashboard includes the most valuable metrics first.
Step 1: Decide what to track
The first step is deciding what to track. Start by creating a list of your biggest assumptions. These are the big variables in your business model. Then, list questions you want answers to on a regular basis. The questions, should help validate your assumptions. For example, say you make the assumption that it will cost $25 to get a new customer. In this case, your questions might ask how much you spent on marketing and how many new customers you got. With the answers to those questions, you can validate your assumption.
Step 2: Prioritize and focus
Some assumption and questions are more important than others. So, no need to get carried away. A dashboard tracking a few key items is usually better than one trying to track everything. Plus, you can always add items later. Stay focused on key metrics. The ones that are most important. Avoid the urge to track low value metrics. Vanity metrics can be fun. But, they can also be distracting so avoid them. Your most valuable metrics are the ones that keep you in business. Those are the metrics you want to track.
Step 3: Identifying your data sources
A startup dashboard is only as good as the data behind it. So, after you’ve identified your key metrics you’ll need to figure out how to get the raw data you’ll need. Sometimes this is easy. Other times, not so much.
Generally, you will need the following types of data:
– Financial Data
– Marketing Data
– Customer and Usage Data
Financial data comes from an accounting system. It’s mostly sales and expense data. Getting this data is usually easy. Most accounting systems let you export data. Most also have an API that makes automating simple. We’ll talk about that in a minute. For now, let’s move on to marketing data.
Marketing data is also easy to get in most cases. There are a tons of tools that make it simple – especially if your marketing online. Marketing data will include things like:
– Website visitors
– Email inquiries
– Landing page conversions
– New Leads
Customer and usage data can be harder to get. If you sell software products it might be easy. However, if you sell hard goods, it’s not so simple. Customer and usage data tells you how and when your products are being used. Examples of customer and usage metrics are:
– Daily use
– Shares with others
– Average use time
– Bugs encountered
Step 4: Decide how to present your data
Your startup dashboard needs to present data in meaningful way. The visual design isn’t so important. You don’t need fancy charts and graphs. You just need to answer the questions that validate your main assumptions.
Think about what needs to be done to make your data meaningful. For example an export of raw sale transactions from an accounting system isn’t super meaningful. You’re probably going to want to see sales data rolled up, sorted or filtered. You might also want to see your sales data combined with other data points. For example; say one of your assumptions is that it takes 30-days after a signup before before a user makes a purchase. You might be tracking a metric named “Average days to purchase”. To got this metric you need financial data (sales) and usage or marketing data.
Step 5: Automate if possible
In a perfect world a startup dashboard will collect and format your data automatically. This isn’t always possible. But if maintaining your dashboard is too hard, it might not get done. Also, you want answers on demand. You want to wait for someone to collect, format and import data. To make that happen automation is key. If you’re technical you can probably figure out the automation. If you’re not technical there are a number of services and tools that can help.
The services available to help put your startup dashboard on auto pilot range from data tools to full blown dashboard managers. For moving data around you can check out https://zapier.com. This is an easy to use service that makes it simple to automate lots of data tasks. You can also search the term “startup dashboard” and you’ll find a number of turnkey service providers. Prices for complete dashboard systems range from free to hundreds of dollars per month. So you’ll probably be able to find one that meets your needs and your budget.
So, there you have it. Startup dashboards and how to create one.Roll your own or find a service provider but don’t go without. It’s not too complicated, it’s not too time consuming and there are plenty of tools help.