“What do investors look for in a beta? What are the key metrics?” That is the question Omar Tellez poses to Chris Dixon of Founder Collective and Hunch and Josh Kopelman of First Round Capital in this episode of Founder Office Hours (a special format of Founder Stories we are trying out). Tellez is the CEO of Sched.it, a social online calendar app getting ready to launch.
Kopelman notes that “investors are always tempted and teased by large numbers,” but cautions that any site can manufacture a bump in visitors. “The real data is retention and repeat usage. Instrument your site to track that data,” he advises. Services like Kissmetrics and RJMetrics are designed to track different cohorts of users, for instance.
Dixon agrees that focusing on “vanity metrics” will get startups nowhere. It’s much better to try to understand the “users you lost” and what excites your most engaged users. And don’t be afraid to launch a “minimal viable product” and retool quickly. “If you aren’t embarrassed by your first product, you have launched too late,” he says. Learn from your early mistakes, improve the product, stay lean, and keep moving forward quickly.
And what about limiting access to the beta to create a sense of exclusivity like at a nightclub? If you can do that, fine. But the “velvet rope works for four nightclubs,” notes Dixon, and everyone else has to beg people to come in from the sidewalks.