Innovation accounting is a method to measure progress in startups, focusing on actionable metrics that provide clear insights into customer behavior and product performance. Traditional metrics like total revenue and customer count can be misleading. Instead, startups should use cohort analysis to track the performance of specific customer groups over time. 'If we’re not moving the drivers of our business model, we’re not making progress,' Ries emphasizes. This approach ensures that startups can make data-driven decisions and avoid the pitfalls of relying on vanity metrics. | Eric Ries | The Lean Startup

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Innovation Accounting and Metrics

Innovation accounting is a method to measure progress in startups, focusing on actionable metrics that provide clear insights into customer behavior and product performance. Traditional metrics like total revenue and customer count can be misleading. Instead, startups should use cohort analysis to track the performance of specific customer groups over time. 'If we’re not moving the drivers of our business model, we’re not making progress,' Ries emphasizes. This approach ensures that startups can make data-driven decisions and avoid the pitfalls of relying on vanity metrics.

-- Eric Ries