Analytics for consumer Internet companies

This post is in response to a question on branch.

It completely depends on the type of business you’re building.

For a B2C startup that’s looking for millions (if not 100s of millions) of users, you’re going to outgrow your analytics tool. It doesn’t really matter what you start off with. Sooner or later, you’ll need to do it yourself.

After you’ve found product-market fit, have begun to build a growth team, and are looking to focus on accelerating user growth, your only option will be to bring your analytics in-house.

This is because your needs radically shift depending on the evolution of your product. You might have to go really deep into predicative analytics. Or maybe you want to build a robust sharing engine that need it’s own tracking.

But getting to this point doesn’t happen on day one.

What are the few key benefits that you’ll need from an analytics tool before you have enough resources to handle everything yourself?

Data Export

Since you know that you’re going to outstrip the tool at some point, a reliable data export will make that transition much smoother. No sense in getting locked into a tool that won’t be able to keep up with you in the long run.

Long-term Data on Users

Most of your analysis will be user-centric. You’ll want to know what people are doing, when they’re doing it, how different types of users differ from each other, and how user behavior evolves. Get yourself an analytics tool that will connect all the data back to individuals.

Remember, the tool is temporary. There will be a point where you’re diving into all sorts of historical data to build algorithms that will help grow your business. It’s absolutely critical that all the historical data has been connected to a user. If not, it’ll be useless. Find a tool that can keep track of people over the long-term. And when a new user signs up, make sure you can connect that user profile to all the data you were collecting while that user was anonymous.

Cohort Reports

As you expand your market beyond the early adopters, your user behavior will start shifting. But a standard analytics tool will merge all of your data together. Users acquired 6 months ago look exactly the same as users acquired today. It’s impossible to track how user behavior is changing. Cohort reports completely solve this problem by tracking how behavior changes over time. Other than your user acquisition funnel, this will probably be the report you spend the most time with.

We have many B2C customers at KISSmetrics that focus on user growth. This is why we built KISSmetrics to provide these benefits flawlessly. Data exports are a breeze, we connect all your data back to customers for as long as you want (even historical data from before the user signed up), and our cohort reports show you exactly how user behavior is changing.

And for many of these customers, there will come a time when our product no longer provides the depth of insight that they need. That’s okay.

KISSmetrics truly shines when used at SaaS and ecommerce businesses. We’re not the perfect fit for a B2C company that needs to acquire millions of users. And neither is any other analytics tool.

So when you’re looking at different analytics tools for your consumer Internet company, keep in mind that the choice is temporary. Sooner or later, you’ll be doing all of it on your own. Pick the tool that will help you get there and transition to the next step.