As product managers we spend a lot of our time thinking about product metrics, and all companies, from startups to corporates, spend a lot of time figuring out whether their metrics are good enough. Are the metrics good enough to raise money, or good enough to keep working on a feature or product, or good enough to believe the product will grow into something much bigger someday?

In this compelling talk from Mind the Product San Francisco, Josh Elman helps to break through the data noise to define the one product metric that matters based on his experience at LinkedIn, Facebook, Twitter, and the many startups he works with today as a partner at Greylock Ventures.

From zero data to overwhelming data

Whether it’s a new product or new feature we start with zero users, says Josh. Then we start hearing stories and anecdotes of individual experiences of our product, and then the data starts piling in. We have so much data right now it can be overwhelming. We have so much data we spend a lot of time looking for benchmarks to compare our metrics with. But Josh says benchmarks are dangerous since they may tell very different stories for different products. There really isn’t an easy answer. There’s no clear threshold where it becomes clear whether something is working or not. The reality is that it depends a lot on the actual product.

So where do we start? We are all trying to build products that matter, products that have an impact on our customers’ lives, so Josh reminds us to focus on just one thing: are people using your product?

Are people really using your product?

This sounds like a really simple question to answer, but even here there is complexity. Josh breaks down three key metrics you need to understand to be able to answer it:

1. Purpose. The first thing you need to understand and articulate is why they’re using your product. What is the core need or purpose that you’re trying to serve with your product? If you can’t define this you won’t know if your users are using your product for this purpose or for something else.

2. Core Action. You need to understand the key behaviour users take in order to use your product. Your users might have a need your product solves, but are they taking the action that solves that problem?

3. Cycle. Finally it’s important to consider the frequency of use. How often should your users be returning and using your product? We often don’t look at this often enough. The cycle is different depending on the core action required, but it also has an impact on your business model. A daily interaction like Facebook is great for advertising businesses, but an infrequent cycle like Airbnb might require a transactional value instead.

This boils down your key metric to: How many times do your users perform the core action on the expected cycle? Now you have something to measure, and you can understand if your product is used in a meaningful way. And if it’s not being used in the way you intended then that can be fine too – there might be a different behaviour which is also valuable, but without your own thesis to start measuring from you’ll never know this.

Your core users drive the product

Once you have a sense of this key metric, it’s also important to understand who your best users – your core users – are. Is your product top of mind, or are they coming to your product through search or a special deal? Are they recurring users? And do they refer your product to other users? By understanding and defining your core users you can understand the behaviour required to become a core user, which helps you to focus your product experience on what matters – from onboarding to virality.

Watch this insightful talk, packed full of examples and hard-earned experience, to learn how to understand your product’s metrics and core users. And remember, there isn’t one metric to rule them all, the metric that matters is unique to your product and company.