How to Create A KPI Dashboard
Our KPI Dashboard Story
A couple of months ago, I was reading Suhail Doshi's post on Bullshit Metrics, another name for vanity metrics. In the post, he describes the idiocy of focusing on metrics that don't matter like new users or pageviews. His argument made sense to me: Pageviews don't correlate with the bottom line, and businesses/startups would be all the smarter to find the metrics that really matter to them, (a.k.a. their Key Performance Indicators).Unfortunately, Team TrueLoyal was tracking all of the wrong numbers. For example, our second monitors displayed our google analytics realtime pageviews ticker and on Fridays we would congratulate each other on reaching new records for daily pageviews. The only problem was that the majority of the pageviews were being served for free customers, and that higher pageviews meant higher server costs. Fail.After realizing our mistake, I decided to change our team's attitude regarding the "pageviews=success" mentality. The trouble was that the easiest metrics to see on Google Analytics were the vanity metrics. I had to find a way to make our real metrics even easier to access. Thus, we went to create a KPI dashboard.
Which metrics to track?
But first, I had to ask myself, what were our most important metrics, or in business jargon, "Key Performance Indicators"? There is a lot of great reading regarding the topic, and the post that influenced me the most was Cristoph Janz post on KPI's for early stage startups and David Skok's advice for SAAS businesses. He also provides a google drive spreadsheet that makes it easy to start plugging in monthly numbers and seeing graphs. After plugging in some of our numbers, I realized that tracking every single metric on the sheet might be overkill for the first version of our KPI dashboard, so I distilled out our key metrics to the following:
- Total Monthly Recurring Revenue
- Lost Monthly Recurring Revenue
- New Monthly Recurring Revenue
I also added some metrics to track the size/growth of our customers:
- Users in each plan
- New customers today
- New TrueLoyals created today
In addition, I wanted to display some other information that I thought would be useful for us including:
- New user emails
- New TrueLoyal usernames
That way, if we see a potentially large client signing up, we could immediately follow up and find out their needs.
How we built our dashboard
Now, I had to find a way to build the thing.In investigating solutions and resources to building a KPI dashboard, I came across a number of SAAS solutions for business dashboards:
However, I didn't want to pay monthly, my requirements were small, and I wanted more control over.Luckily for me, I found Dashing, an open source dashboard framework made by the folks at Shopify. Check out their demo to see what a Dashing dashboard looks like. It's easy to create a custom dashboard with Dashing, since the small framework handles all of UI and job scheduling. All I had to do was write two ruby scripts for pulling in data from Stripe and our own database, and in about a day and a half I had a finished first version of our dashboard. Tada!After building it, the next step was to get the team to bookmark the dashboard and have it replace our habit of checking Google Analytics for pageviews. Surprisingly, this habit-forming took longer than building the actual dashboard out. This involved a week of:
- Bothering teammates until they finally relented to putting the KPI Dashboard in their bookmarks bar
- Interjecting every time someone mentioned pageviews and making sure we all understand that pageviews = cost
Results of our KPI Dashboard
After two weeks of use, it is clear to us that our dashboard was well worth the 1.5 day development cost. It has already allowed us to TRIPLE our revenue this month, capture some larger clients (we always keep an eye out for users signing up with high-profile domains) and also allows us to realistically project how long it will take our business to break even. Instead of relying on vanity metrics that have exactly zero utility, our actionable metrics allow us to back up answers to questions such as:
- How much support do we offer to free/plus users?
- How much should we charge for the pro plan?
- Will we ever be a real business?
I hope this article helps other entrepreneurs and managers discard bullshit metrics and expose their truly important metrics.
