Overcome the Startup Dip with Better Analytics

Rishad Shaikh

The “Startup Dip” is that awful feeling you get when you’ve spent months building a product you’re very enthusiastic about and come launch day, the response you get is meh at best. OK, sure you get a couple hundreds, maybe thousands of users to sign-up but you’re not really being able to trigger that viral hockey stick growth you were dreaming of.


You panic. You doubt. You start thinking; maybe something is wrong with my product, or my team or me!

Frantically you start shipping out new product features hoping that the next iteration is going to attract a ton of users but you’re falling deeper and deeper into The Dip.


It’s not you, it’s not your team and it’s definitely not your product. Ok it might be but in most cases, that’s not what the real problem is. The real problem is, you don’t know what the real problem is!

So stop guessing and start digging into data!

Get a Grip on Your Analytics

So here’s the thing if Traffic->Users->Revenue is all the data you’re looking at, you’ll never be able to get out of the Dip. How many people are coming to my website, how many of them are signing up and how much money am I making? This simplistic view is not very helpful in understanding and identifying gaps and opportunities.

There’s a whole lot of “magic” in the middle that you’re missing out on!

It’s not about the Tool. It’s about the Mindset

There’s no point diving any deeper into your data until and unless you have the right mindset and understanding of user lifecycles. Its only when you understand the different stages of the user in context to your product that you’ll effectively be able to move them from one stage to the other.

Typically, this is how the user story goes:

You hear about this fancy new product through updates from your friends on Social Media.

You visit the shiny new product website and decide to sign-up.

A few days go by without you ever returning to use the actual product and then suddenly you get an email in your inbox enticing you to explore the product further based on your preferences.

You head back, explore, and if you like what you see you’re encouraged to share through social media thereby creating more awareness and increasing the reach for the product.

There’s a funnel for a story like that, it’s called the Lean Marketing Funnel and it looks something like this:


Each step in the story above (and funnel) is a user state and the key thing to do is measure conversions at each step. When you dig into your data with this mindset then only will you be able to identify where you’re actually losing users and what you can do to actually push (read:gently nudge) users from one state to the other.

What to look out for in your Data

The first thing that’s going to hit you when you start mining your data with this approach is; how bad your conversion rate is. But don’t be like that client who stopped using MailChimp because it told them nobody was opening their emails (True Story btw)! Rather, you need to look at things like, how many users are you being able to move from one state to another. For example, if you’re successfully driving lots of traffic to your product but your conversion rate in terms of account activation is low then you need to focus on better landing pages and not driving more traffic!

In essence, there are specific things you can look at for each user state.

For acquisition, look at the quality of your traffic sources.

For activation and retention, look at the effectiveness of your landing pages and your onboarding processes. Use an email drip sequence to get people to come back to your website and improve the overall social integration of your product website.

Tools and Tips

Apart from the awesome and free Google Analytics try looking into Kiss Metrics and Mixpanel for some great analytics fun. You will also definitely want to run control and test experiments (A/B Testing) on your user base to actually test out what works on the web. Again, along with Google Analytics you can try out Unbounce for creating and testing your landing pages. Of course you can (and should) be testing product features too!

Closing Thoughts:

You know what you’ve built is amazing. Don’t give up on it just because you haven’t been able to get millions of people to use it-just yet. Get into the right “mental-mode” of understanding user lifecycles and focus on testing and experimenting with things that will help you improve conversions from one user state to another.

You’ll need to do a lot of experimenting and testing. The best thing to do to get it right is to stalk startups that have experienced the viral growth you desire by incorporating such optimization hacks.Quora, Groupon, Kissmetrics, Okcupid and Pinteret are just some of the names that have gotten it right and can serve as a great source of inspiration when you’re down in the Dip.

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