Building a Web3 startup is like wandering through a dark forest. For Web3 teams, understanding onchain behavior is challenging due to the complexities of data collection and analysis. Without analytics, measuring the impact of new features and campaigns is impossible. In this article, we’ll show you how to effectively use Web3 startup analytics and track important metrics to grow your Web3 startup.

Web3 startup analytics is a critical component of building successful decentralized applications. 

What is Web3 Startup Analytics?

Web3 Startup Analytics refers to tools and methods for collecting and analyzing data from decentralized applications (dApps) and blockchain networks. Onchain data helps you make product decisions, understand Web3 users, and achieve product-market fit.

Web3 analytics highlight onchain user behavior, market trends, and product performance

Startups thrive on testing, feedback, and constant improvement — and Web3 product analytics provide the most actionable insights. Analytics highlight onchain user behavior, market trends, and product performance. For example, product analytics don’t just track sign-ups; they reveal active engagement, identify what users value, and highlight features in need of attention or improvement.

In addition to traditional product metrics, here are the key metrics that Web3 startups focus on:

• Product Performance and Coverage: Track supported chains, user experience (UX), and business development (BD) performance to evaluate product uniqueness and usability.

• Protocol Metrics: Monitor Total Value Locked (TVL), transaction volume, Daily Active Users/Monthly Active Users (DAU/MAU), utilization ratio, fees, and bridge inflows to evaluate protocol performance, engagement, and liquidity.

• Runway: Track fundraising, treasury holdings, and revenue to assess financial health and runway needed to reach long-term goals.

• Thought Leadership: Measure social scores, campaign success, and community health to track engagement and acquisition.

• Future Catalysts: Track major updates, partnerships, and roadmap to assess growth potential and future drivers.

Why does Web3 Startup Analytics matter?

Adopting a data-driven approach and monitoring analytics regularly provides actionable insights critical to your Web3 project. These include:

• Product performance and goal progress

• Product improvement opportunities

• User behavior and demand

• Effective marketing strategies and sales techniques

• Progress toward product-market fit

• Emerging trends and problem areas

With reliable analytics, you’ll know what to prioritize, which activities to adjust, and where you’re headed. You’ll understand how your product is perceived, how to enhance it, which features to focus on, how to optimize processes, and more.

It’s best to start focusing on analytics as early as possible. Don’t wait until later or assume you’ll “grow into it.” Web3 analytics is a powerful tool to drive growth and help you avoid costly mistakes. Solutions such as Formo make analytics accessible, even for those with limited expertise.

The early-stage Web3 startup analytics

Web3 Analytics allows you to build a successful startup by focusing on creating a great product instead of obsessing over data. Here are 5 steps to make the most out of Web3 startup analytics in the shortest time:

5 steps to make the most out of Web3 startup analytics

Step 1: Define your product goals

Identify your business objectives and align your analytics strategy with them. Decide what data will help you achieve these goals and address key questions. For example, if you're launching on Product Hunt, track engagement metrics such as average session duration to measure user interest and product value. Select metrics that reflect your startup's progress (acquisition, activation, revenue) and adjust over time.

Step 2: Set up analytics tools

Start tracking basic metrics with Web2 tools such as Google Analytics or Web3 analytics such as Formo. Select tools that integrate well with your system and are easy to maintain. Formo offers free trials to make it easy for Web3 startups to start.

Step 3: Track a key metrics dashboard

A key metrics dashboard perfectly tracks whether users are engaging with your product. It’s too early to obsess over advanced metrics like AARRR (Acquisition, Activation, Retention, Revenue, Referral). Instead, focus on a simple dashboard that gives you a clear picture of user engagement and feature usage such as DAU/MAU, wallet, transaction volume, or referrers.

Step 4: Capture feedback and talk to users

Metrics provide an overview of user activity, but direct communication through surveys, interviews, and feedback offers deeper insights.  Formo's Form Builder helps product and marketing teams conduct and analyze Web3 surveys at specific times to users, making it easy to gather both quantitative and qualitative feedback.

Step 5: Measure key actions and adjust strategy

Track key user actions such as sign-ups or feature usage, that indicate engagement or conversion. Set alerts for significant changes in metrics to respond promptly. Analyze your data regularly to monitor progress and identify trends. Adjust your Web3 strategy based on the data, then revisit and refine your approach in the next review period.

Top 3 Startup Analytics Mistakes

Top 3 common mistakes in startup analytics

1. Tracking everything

If you're not using the data to drive decisions, there's no point in tracking it. Focus on metrics that directly add value to your Web3 startup such as product feature prioritization or planning key tasks. Avoid wasting time on irrelevant data.

2. Focusing too much on vanity metrics

Vanity metrics, such as website visitors or impressions, may seem impressive but don’t reflect true product success. Instead, track metrics that show real performance, such as daily active users (DAU, to get a clearer picture of growth and impact.

3. Jumping to conclusions too quickly

Avoid reacting impulsively to early signs of trouble in your Web3 analytics. Take time to evaluate trends and assess whether the change is significant enough to warrant action. Sometimes, a bad day in analytics is just that  —  nothing to panic about.

Data-driven insights serve as the foundation of your Web3 product and marketing strategy, guiding key decisions and fueling growth. Relying on Web3 startup analytics rather than gut instinct gives you a clearer understanding of your customers, your market, and your next steps. With this approach, Web3 startups confidently navigate toward success, powered by actionable onchain data.

Starting with data analytics can be challenging for a Web3 startup. Formo harnesses Web3 product analytics, data visualization services, and interactive dashboards that make data accessible and easy for your non-technical Web3 team to manage. 

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