Key Performance Indicator: Don’t measure everything

Shruti Dwivedi
3 min readMay 8, 2020

I have seen many businesses trying to measure everything; the fewer metrics you chase, you will have more focus as a team.

Key Performance Indicators

KPIs, or Key Performance Indicators, are a type of metric that measures the performance of your product against your strategy. They capture the big picture and help you to understand how well your product is working (or isn’t working) and are aligned with business objectives. Additionally, they help to measure how changes you make to your product move the needle (or don’t).

Types of KPIs:

  • Business: How are you doing against business goals?
  • Product: How is the product being used? How is the product helping users to meet their goals?
  • Quality: How often user encounter issues and problems?
  • Development: How well the team is executing when it comes to building and delivering the product?

How to pick KPIs:

  • Don’t measure everything: First and foremost, I know it’s really tempting to do because it’s a lot of different data and lots of things that you can measure but you wanna be super selective when you are picking KPIs. It’s better to have few actionable KPIs rather than having a ton of KPIs that are difficult to understand. If you have too many KPIs, you will waste a lot of of time trying to understand what they all mean and what’s causing them to change over time.
  • Align user, product, and business goals: It’s good to have few KPI’s that touch on each of these. If one of your business goals is related to revenue then revenue will likely be one of your KPIs. User goals are related to the problem that your product is trying to solve. Product goals are generally related to the usage of your product, usually around engagement.
  • Make sure KPIs are measurable: Team agrees on how those KPIs will be measured. At first, this seems very simple and straightforward but often times when you start digging into the data there is a lot of more complexity that appear at first.
  • Use percentages and time periods when setting goals: Always set goals based on percentage and time periods which is generally more helpful to achieve.

Let’s imagine we are defining KPIs for Skype, just to make it more tangible:

Assumption: Business goals are related to revenue.

Defining KPIs: Skype

Thanks for reading! Hope this was helpful for you to identify the right KPIs for your business/product. From now on, try to measure based on the business goals and the strategy that helps to keep the focus of your team. Remember, 80% of the result comes from 20% of the efforts: Pareto Principle, you can read in detail.

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Shruti Dwivedi

Data Product Manager. Building products that are capable of solving the customer’s problem. Customer obsession & ownership are the two principles that I believe