One of the most key steps to building a succesful startup is figuring out what works — and what doesn’t. To do this, many companies rely on things like A/B testing to figure out which workflows and designs work best. But there are some things that are a bit trickier to measure, like exactly which features your users are taking advantage of, and how they’re using them. Mixpanel, a Y Combinator company launching today, is looking to solve this problem by offering companies a suite of analytics tools that go well beyond what tools like Google Analytics measure.
Founder Suhail Doshi says that most significantly large companies, like Slide for example, have entire teams dedicated to tracking user behavior. If you throw a virtual sheep at your friend using one of Slide’s apps, you can be sure that every element of that action — including who the sheep’s receipient was, the time you threw the sheep, and even what prompted you to throw the sheep in the first place — is being tracked.
Unfortunately, most fledgling companies simply don’t have the resources to put together this kind of analytics tracking. Mixpanel solves this problem by giving developers a library of stat tracking functions that they can quickly integrate with their code, saving them the development costs that would have been required to build their own analytics tools. Doshi says this can take as little as ten minutes to integrate, requiring only a line of code wherever there’s something you want to track.
After implementing these functions in their code, companies can track stats from the Mixpanel control panel, which updates in real time. Beyond tracking stats like the number of times a certain song is played or a given feature is used, Mixpanel can also do funnel analysis, which allows startups to measure when in a signup flow users begin to drop off (this allows them to figure out the pain points and lower barriers to entry as much as possible).
Mixpanel’s pricing is based on usage, which it measures by looking at the number of ‘points’ of data the service tracks. The company is already in use by a number of other startups (many of them fellow YC alumni) including Posterous and HeyZap.
Analytics and stat tracking is extremely important to the growth of any company, especially one that’s trying to gain users for the first time. Mixpanel is definitely honing in on a large market — its ultimate success will be decided by how useful the data it collects really is, and in how many datapoints it can track that free services can’t.