Any company needs a mission for the employees to know where the company is heading and what the north star is. And each product team needs to know how their product is actually helping achieve this mission. It’s the senior leaders’ job to connect the dots and ensure the right product investment areas are funded and are contributing to the mission, but it is the product team’s job to come up with the metrics and goals which will indicate the progress of the product as well as the contribution to the company’s mission.
If you haven’t, please read Product Development Best Practices post first.
Product Metrics and Goals Example: Building a community at Meta
The mission for Meta (formerly known as Facebook Inc) is
Giving people the power to build community and bring the world closer together.1
Let’s assume we are leading the Facebook Groups product team. Now, we need to think how our product’s mission is helping with the company’s mission. There are several ways to approach this:
- Increase number of people joining groups
- Increase number of groups
- Increase variation of group categories (Sport, Politics, Health etc)
- Increase engagement of people in the groups
- Increase the engagement of group admins
- Increase promotions of the groups by the group admins
Product Mission Prioritization
Now, which of these missions should we first prioritize? If there is not enough groups, then there wont be any groups for people to join. If there is not enough people in the groups, it does not make sense to prioritize engagement etc.
Among these, we prioritize “Increase number of groups”. Now our entire product efforts will focus on this, but how do we track whether we are making progress? Meaning which metric should we use?
Is it “total number of new groups created”? Well, but if we focus on this number only, then we are ignoring the rest of the groups in the Facebook platform.
Is it “total number of groups”? Yes, this helps but it still does not address whether these groups are active or not.
Is it “total number of active groups”? Good metric, but what if all the active groups are only related to few categories, rather than a wide range of categories. We would prefer different type of categories to exist so that people can find groups that are the most relevant for them. Also, what is ‘active’? We need to clearly define it. For example, should it be a person posting in the group for the last 7 days or 28 days? Or a person commenting or liking a post in the last X number of days?
Counter Metrics
Instead of adding more complexity to the original metric of “total number of active groups”, in order to incorporate these other important factors, we can utilize ‘counter metrics’. Counter Metrics means;
A Counter Metric is what you measure to ensure that when you optimize your primary metric, you’re not causing harm to another aspect of your business.2
Here, if we dont have a counter metric like “number of categories with more than X number of groups”, then the harm we are causing is that our groups ecosystem will be highly concentrated to small not number of categories, and not diversified enough to flourish with more people.
Let’s say we have both “number of active groups” as the primary metric, and “number of categories with more than X number of groups” as the counter metric.
Is this enough? As a starting point, yes. But there are other metrics we should also keep track of. For example, how many of these groups are churning? While we are increasing the number of groups, maybe the growth could have been much higher if we could retain the existing groups better. Another example would be, how many people are using these groups? What is the minimum number of people that need to be achieved in a group to stay active? Which groups are under this number?
Of course, the more metrics you track, the more complicated the product team’s work will be. It is crucial to keep the team’s focus on few but the most important metrics. However, keeping an eye on other metrics should give clues to the product team on whether there are any unusual activity happening, and whether that should guide them to think differently in the product strategy.
Metrics vs Goals: Best practices to define the product goal
Metric is different than goal. Metric is ‘how you are measuring success’, goal is ‘what success is’.
Product Goals need to be very clear, as quantitive as possible and needs to be achieved during a finite time frame. Understandably in the early days of product development, goals might have to be more qualitative such as ship goal, positive feedback from users/clients etc, but there are still goals that can be quantitative and not directly associated with product adoption or revenue etc before even the product is launched, such as error rates, number of testers etc, which can help the team have a good sense of where the product is and how it is progressing.
Goal setting is usually owned by Data Science team, as a relatively neutral party in the product organization. They analyze the progress, growth expectations, and even sometimes discuss the company goals with finance department, and proposes the product goal to Product Manager, and the rest of the team. There is back and forth among key stakeholders within the team to align on the final figures before these figures are discussed with senior leadership for final alignment.
It is critical that the goal is ambitious enough, and ‘not too easy to hit’ which means the team wouldn’t push for further progress, or ‘not too hard to achieve’ which would affect the team’s morale and motivation.
This ambitious goal must be determined based on clear assumptions. For example, there should be assumption on number of groups that the team can realistically hit with different product efforts in a given 6 months period. Each product effort should be assigned to an expected contribution (e.g number of new groups, or number of groups resurrected), so it is clear how each effort is adding up to the total goal. 6 months later, it will be much easier to see which the assumptions were wrong, and which areas did not perform as expected, not to point the blame on people or teams per se, but more to understand how to predict these goal contributions better in the future.
What is Non-Goal?
By the sound of it, it feels like anything that is not a goal could be a ‘non-goal’. In fact, there is a more precise definition for it.
A ‘non-goal’ is a goal that is still critically important for the product or the company, BUT it is not a goal at the moment, and is not prioritized. In our example, a non-goal could be generating advertising revenue from the groups product. Eventually, we would want to monetize the engagement in the groups when it is bigger, but it is not the goal today.
Important Note: None of the details above is related to any actual product team’s goals, or metrics. They are all made up for the purpose of this exercise.
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Any successful product organization has all these metrics laid out and communicated internally for full transparency and alignment across the board. This is crucial to keep each person and each project team accountable for their part of the work, and also crucial for Product Managers to make progress with the product and fine tune product strategy over time to achieve the north star mission/vision.
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