Lean Analytics Book Summary

Each startup has a mission to search for a good business model that’s both scalable and repeatable. Eric Ries wrote Lean Startup, a book that came before Lean Analytics. It’s about efficient product and business development as a framework, or to be more clear, about:

  • Customer Development,
  • Agile Software Development methodologies, and
  • Lean Manufacturing practices.

Startups were the target of this process, but it’s become so popular with time that now companies of all sizes use it for improvement. What makes it so popular is that it isn’t about being small or cheap, but making quick and efficient changes without leaving waste. That makes Lean Startup great for any company out there, big or small.

The core concepts of Lean Startup are:

  • Build.
  • Measure.
  • Learn.

KickAssGrowth Build Measure Learn

With Lean Startup, you can create and work on a fully established vision by developing marketing strategies, and Lean Analytics is what takes it to the next level. Lean Analytics focuses on measuring. For any organization following this concept, it’s important to go through the cycle as quickly as possible, because it leads to quick results.

It makes sense—if your product scales faster and better, it has a higher chance of being a success. However, don’t think of this cycle as a simple way of improving your product; it’s much more than that. Innovation accounting is what gets the minimum product together, thus providing an actual measure of how well you’re doing.

Lean Analytics is what quantifies your innovation and gets you one giant step closer to your goals. Being viral requires focus.

Let’s take a look at how several companies managed to hack their way to the top.



In the beginning, Airbnb‘s main focus was on the quality of their photos, because the team had an idea that high-quality pictures would make an impact on the number of rentals per month. With that in mind, they hired 20 professional photographers to take pictures of all hotels and apartments Airbnb offered, and put the Concierge MVP* concept to the test. This required little to no effort, yet it gave Airbnb outstanding results.

Once their experiment showed good results, Airbnb made it live for all visitors. Their photographers were available to anyone, and within a year, Airbnb went up to 10 million nights booked.

Lean Analytics—Lesson Learned:

Most of the time, you cannot expect what your main source of growth will be. Once you find your test idea, make sure to invest as little money and time in it as possible. Make a firm definition of what your success story should be before testing. If your idea is the right one, plan on what you’re going to do with it.

*A Concierge MVP is a Minimum Viable Product that creates value you promised to your audience. It doesn’t necessarily scale, but for the short term, it’s easy to create. Why “concierge”? Because when creating a startup, you’re the main man in engaging your first batch of customers—most often in person.

Circle of Moms


Circle of Friends was founded as an independent social graph app when Facebook’s API started allowing web devs to integrate their own apps, but it came with one huge issue. It was targeting the wrong market, even though it went live at the right time.

A simple, yet effective analysis of each user’s engagement/behavior was ultimately what led to a good solution. As soon as they found their target, Circle of Friends changed its name and purpose to Circle of Moms. It was a huge risk, but one that brought significant changes. Be prepared to burn some bridges.

Lean Analytics—Lesson Learned:

Circle of Moms was willing to dig deep into their data and find patterns that meant the most to them. Their leader, Mike, stumbled upon an “unknown area” that led to a complete makeover—one that focused on a more specific niche. What’s important is that it was focused on data itself. Although Circle of Moms faced retention issues, it’s always better to have an easily searchable, but small target audience you can work on.



Ever since its inception, SEOmoz has been all about metrics, but that does not necessarily mean it has to swim in data. Back in 2012, SEOmoz relied on so many KPIs that it was counterproductive. One of their investors suggested to rely on one metric only, and make it more valuable than all others: Net Adds.

This KPI was the best option for SEOmoz, because it’s nearly impossible to improve on various KPIs at the same time.

Lean Analytics—Lesson Learned:

Tracking many metrics can often be a great thing, but you can lose focus quickly. A good solution is to pick as few KPIs as possible, because that’s the best way to organize your team.



In its early stages, Clearfit focused on revenue that was based on subscriptions. Their own customers misinterpreted their move, as they thought low price tags were a weak offer.

When the paid listing model was introduced, sales increased by ~300%, making the revenue ten times greater. This means the problem was in the pricing itself, rather than the business model.

Lean Analytics—Lesson Learned:

If you consider SaaS a recurring service, then it doesn’t have to be priced like one. Your job posting platform should offer more transactional price tags—as the book says, “pricing is a tricky beast”. Obtain customer feedback whenever you can, because for Clearfit, a low price does not always mean something valuable is up for grabs.

Lean Analytics: What Makes a Good Metric?

Drawing business formulas: chart

First of all, let’s define what a good metric is.

A good metric is something comparative and understandable. A metric is basically a ratio or rate, and it aims to change how you behave.

Prior to choosing the right metric, here’s what you have to know:

  • Qualitative metrics are not structured and, most of the time, very hard to aggregate. Quantitative metrics are those that involve numbers and statistics. They give you the numbers you need, without any concrete insight.
  • Vanity metrics don’t impact the way you act. The ones that change your behavior are actionable metrics. Their mission is to help you pick a course of action.
  • Leading metrics give you an insight into the near future, whereas lagging metrics give more info about the past. The ones that are better here are leading metrics, because you can still make impact on them.
  • Finally, if two metrics change in parallel, they are correlated, causal otherwise.

Also, use the One Metric That Matters. Why? Because:

  • It answers the most important question you have.
  • It forces you to draw a line in the sand and have clear goals.
  • It focuses the entire company.
  • It inspires the art of experimenting.


businessman leaning against a concrete wall with color city concept

Make Things Simple to Digest

A good metric can be interpreted with ease; there’s absolutely no need to provide an abundance of unnecessary numbers. This frustrates people, and to make things worse, it can mislead them. Once they’re looking at the wrong numbers, you know something’s not right. Metrics are often very valuable, but when not used right, they can lead you in the wrong direction.

Don’t forget the One Metric That Matters. Use it to ease people into your analytics.

Ask Good Questions

Startup or not, it’s mandatory to know your market. Each click, subscription, like, share, or purchase counts from the moment they hear or read about you, all the way to them ditching your services for good. You can start making changes when and if you have data on your consumers. For you, that data is an exclusive insight into their needs and lifestyles.

Times have changedfrom a leader telling others there’s no use in consumer data, to having so much valuable data up for grabs. This change tells us to focus on the most important metrics only. A disciplined approach helps identify and overcome all risks. Nowadays, leaders only have questions they can ask their consumers, so go ahead and ask good questions!

For the full, 400+ page version of Lean Analytics, click here to purchase it and crush your competition!

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