YC Stack: Recommendations for Analytics and Marketing Tools for 2020 Startups
Enough people have asked us for recommendations that I figured writing a post would be a good way to scale this. Other YC founders know that we’ve worked in the space for a few years and that we’re familiar with the ecosystem of tools. We even started Freshpaint to make it easier to use these tools.
To a new founder, selecting a stack of tools can be head-spinning. Many YC founders are either new to startups or they’re unfamiliar with the parts of running a startup like analytics, marketing, product, etc.
I get it. You don’t want to spend a ton of time doing research, waste effort implementing the wrong tools, or stick with the wrong tool for too long. You just want to know the best tools you should be using for your stage and type of business.
This post is completely tailored towards early-stage companies in the $0 to under $1 million in revenue range.
Stack Recommendations For Early-stage Companies
If you’re currently in YC or from a recent batch, here's what I recommend for a stack:
- Event tracking
- Session replay
- Product analytics
- Google Analytics
- Error tracking
- Maybe an email tool (see below for commentary on how to choose)
Read on for more detail for each category including tradeoffs, how these tools will grow with you, and what to avoid right now.
More Details
Event tracking & data federation: Freshpaint or Segment
What this is: This the foundation of your stack. Think of it as the layer between your site/app and your stack of tools. These tools collect customer data from your site or app and then send it to your tools in the proper format.
Why you need this: Makes it dead simple to turn tools on and off quickly, switch to different vendors and backfill past data in 3 clicks, and test tools against each other with less burden.
Instead of doing 5 different integrations with 5 different tools, you do one integration with Freshpaint or Segment. Then each new tool you bring on can be added with a few clicks.
This part can also be super painful as you grow: It avoids multiple sources of truth as everything is receiving the same data from the same place. It’s a big ol’ can-o-worms if your product analytics tool and your BI tool/data warehouse combo have different numbers for the same metric. Trust me, you don’t want to have to detangle that mess.
What’s the difference between them: Freshpaint automates data collection, so it’s faster and less resource intensive to get going. Freshpaint has retroactive data – meaning if you install Freshpaint today and create a new event 6 months from now, you’ll have 6 months of data available to retroactively backfill to your tools. This additional level of flexibility eliminates cases where you “forgot to track that”. Freshpaint has 100+ integrations and we’re building more on a daily basis.
Segment is manual, hard-coded data collection. It’s slower and more labor intensive because you’re forcing a developer to spend time on something that’s not building product. Segment is a great product that’s been around for a long time. They have a lot of features that are geared towards helping larger companies customize their data pipelines. Segment has backfills, but lacks retroactive data. Segment has over 200 integrations.
As a founder of Freshpaint, obviously I’m biased ;)
Price: Both are free for early-stage YC companies. Segment is known to balloon in cost over time (ask around to verify this).
Qualitative session replay: Fullstory
What this is: Think of this as a DVR for your website. You can see a full recording of a user’s session on your website or in your product. Although they try to tout their analytics capabilities, it’s a qualitative tool and no substitute for actual product analytics.
Why you need it: This lets you see how people use your product. It’s super helpful to find obvious UX fails or confusing experiences. It’s also useful for debugging, as you can see exactly what steps a user took to produce an error.
Session relay is a good fit because most companies in YC will have a small amount of users (especially if you’re a B2B company). Since you don’t have a lot of usage in your product yet, you can watch each session individually. You might even be able to get away with just this for a while.
For those new to analytics Fullstory is more approachable as you don’t need to know which queries to run. It’s less daunting than a product analytics tool (see below) and you can still get valuable information out of it. Just don’t fall into the trap of using session replay in place of product analytics. Instead, use the qualitative tool in addition to the quantitative tool.
Price: As with everything on this list, Fullstory is free or heavily discounted for most YC companies. They have a free forever plan up to 1,000 sessions per month. If you’re above the free tier, they offer 80% to YC companies.
As far as how pricing scales in the future, we’ve seen pricing for Fullstory sort of all over the place. For companies of similar data volume, we’ve seen pricing as low as $15k and as high as $50k. My guess is this is the result of Fullstory iterating on their pricing as well as poor negotiating from some buyers.
Product analytics: Amplitude
What this is: Product analytics answers questions around what a user did. It’s a powerful exploratory tool for product health, how users are using your product, etc. usage
Why you need it: You absolutely need this if you’re a business that has any type of scale (consumer product, high volume/low revenue B2B SaaS, etc). Even if you don’t have many users, you still need to understand how your product (aka your business) is performing.
Questions like, "How much time do users spend in my product every day?", "What actions do my users perform the most?", and "Which features get used least?" are incredibly valuable for understanding your users. As a founder, it gives you an understanding of what’s working, what’s not, and how to make your product better.
Depending on your business, investors might ask you for some product metrics. You’ll need a product analytics tool to answer these questions. Top tip: Do not try to use a BI tool like Looker or Tableau for this. These tools rely on SQL and are not good for exploratory product analysis.
Price: Amplitude has a generous free forever plan that is free up to 50 million events per month. In the future, if you have the scale where you need to pay and you’re beyond the YC deal they offer, their enterprise tier starts around $24k annually. They have lower tier options available.
Marketing analytics: Google Analytics
What this is: GA is the granddaddy of web analytics, and as such its style is a bit...outdated. Google Analytics answers questions around page visits, rather than user actions. This is helpful for attributing ad spend or tracking metrics for content businesses (articles, blogs, etc).
Why you don’t need this: Don't be tempted to use this for your product questions.
If you’re a B2B software, consumer software, or even e-commerce company, Google Analytics isn’t going to be super helpful. It should not be the first analytics tool you gravitate to.
It’s everyone’s first inclination to use GA, and marketers are the biggest violators here. Google Analytics doesn’t tell you anything useful about the health of your product or your business. Great, your homepage got 5,000 pageviews last month and your bounce rate is whatever. What actionable insight can you gain from that? GA doesn’t tell you who those people are, what they did in your product, or your rate of converting those leads to users.
GA is all anonymous, and is not set up well to show you information like user fitz@freshpaint.io clicked button A, then button B, then button C. Once you start to scale, the data becomes sampled.
Honestly, we just use a product analytics tool for everything. Product analytics also handles pageviews, UTMs, etc.
Why you do need this: GA is great if you’re spending a lot on ads or your business is content heavy. Pageviews are a key business metric in content businesses. For all the early-stage founders out there, let me clarify what “a lot on ads” means: it’s not $500 per month. It’s orders of magnitude larger than that.
Even if you’re spending small money on ads, GA has some great reporting features for your ad spend.
Price: Free.
Error Tracking: Sentry
What this is: This tracks errors and bugs that occur in the wild. It alerts you when these things occur in your product.
Why you need this: You're so early, your product is undoubtedly broken or buggy in lots of places. The only way to fix critical issues is to know about them.
Price: Free. Scales pretty inexpensively.
Live chat: Intercom or Drift
What this is: They’re chat tools that put a little widget on your site. Great for sales and support. There’s other features and add-ons for marketing and sales. They integrate with Slack (and others) so people can chat right into you.
Why you need this: You might as well have these – at the YC stage it’s free and not much effort to set up. These tools help with 3 things: sales, customer engagement, and support. It gives people an easy, low-friction way of asking you questions on your marketing site, getting support in your product, or engaging users about some new feature or ebook.
If you’re B2B and have any sort of inbound, I've personally experienced how effective chat be at setting meetings and closing revenue at a past startup.
You can also build chatbots that fire messages based on certain behaviors in the product. For example, you can build tailored onboarding and activation messages for new users in your product. Or tailor messaging to someone looks at your pricing page (presumably they’re showing some level of intent).
Based on our experience, marketers seem to prefer Drift and product managers prefer Intercom.
Price: Drift has a free forever plan, and Intercom offers startups a plan discounted to $49/month. If you’re at the point where you have to pay, pricing starts at just a few dollars per month. Intercom is notorious for getting expensive as you scale so take that into account.
Things you might need – depends on your business
These tools depend on mainly on your stage and somewhat on the type of business you’re running.
CRM: Hubspot
Why: Only use this if you’re tracking customer calls and deals. If you’re just doing research and don’t want to drop any balls, Trello might be a better solution because it’s more lightweight.
Hubspot’s CRM is free and easy to use (way easier than Salesforce) so it’s great if you’re getting started. It doesn’t have all the bells and whistles of Salesforce, and you’ll probably switch to Salesforce around Series A anyways.
Price: The CRM is free. There is a premium version that’s a few dollars per month.
Basic email: Mailchimp
Why: It’s free, easy to use, and does the basics well. Only set this up if you want or need to send emails to your users (you’d be surprised at how many people set up tools to “use them in the future” and then never do). You can even just send emails through Gmail BCC if you only have a handful of users.
Price: Starts free. Really cheap to scale up.
Automated marketing software: Hubspot, Autopilot, or Customer.io
Why: Avoid this if you’re super early. If you were already an established company before starting YC, or you’re B2B and already have a lot of users then it makes sense to set this up. I don’t think you can go wrong with any of them – you can fire emails based on actions users take in your product.
Hubspot is a great marketing platform with a ton of features, nice integration with their free CRM, and any future marketer you hire will likely have used it in the past. The one downside is that everything in the product feels like an upsell (especially if you’re on the free plan).
Autopilot makes it super fast and easy to build and send automated email drip campaigns with a drag-and-drop “whiteboard” type interface. It’s a strong product, but they haven’t much additional functionality and new features over the last few years.
Price: Scales with your size, starting from a few dollars per month.
Email for e-commerce: Klaviyo
I won’t go into detail here – if you’re starting an ecommerce company, you likely know and/or use this tool already.
Price: Free up to 250 contacts. Can start small and grow from there.
Things you probably don’t need right now, but will in the future
These tools might not be super useful for the average new YC company hunting for product-market fit. But keep in mind everyone’s business is different. These tools will be helpful for companies that are further along.
A/B Testing: Optimizely
What it does: A/B testing and personalization.
Why you don’t need it now: Don’t waste your time on this in the early days. You’ll get small, incremental impact (if any)...but you really need things that will help you grow 10% week-over-week. It also requires some level of scale for it to work, which you probably don’t have yet.
Why you might need it in the future: Great way to increase conversions and get more out of the marketing dollars you’re investing.
Product onboarding: Appcues
What it does: Onboarding and product adoption for new users.
Why you don’t need it now: If you’re not a B2B SaaS company you might not need this, ever. At this stage an open source thing (like this) might be better (or Intercom/Drift).
My suggestion (and I’m sure your YC partners would say the same) is that you should be working super closely with your users. For example, at Freshpaint we aim to do onboarding in person with every new user.
Appcues is a great product, but it’s on the expensive side. Mostly more established startups will take advantage of this.
Why you might need it in the future: Most companies (usually B2B SaaS) use this because activating new users has high revenue impact for them. This is best under a freemium go-to-market model, where revenue depends on how well you’re converting users from free to paid.
Appcues is also useful if you have an existing user base and you want to educate them about new features or a key feature they’re not using.
A data warehouse: Redshift, Snowflake, or BigQuery
What it does: Literally what the name sounds like. A cheap way of storing and querying all data on your users or the rest of your business.
Why you don’t need it now: It’s probably more trouble than it’s worth, and you won’t really use the data for anything right now.
Why you’ll need it in the future: You’ll probably use this in the future. As you grow into multiple teams and you’re managing more with your company, you’ll want dashboards that regularly update on KPIs and other performance/health metrics. People usually use a BI tool like Looker or Tableau visualize data in the warehouse (product performance, sales performance, etc).
It’s also nice to have a historical record of all user/product data stored in one place that can be queried if needed.
Top tip #1: For a data warehouse, go with whatever cloud service provider you use. Trust me, it will remove a bunch of complexity and you’ll thank me later. So if you use AWS, go with Redshift (or Snowflake if you’re cool). If you use GCP go with BigQuery.
Top tip #2: Make sure your team has resources that know SQL. I once saw a company that spent over $100k having a consultant move their data over to a data warehouse, only to realize that nobody on the team knew SQL. They couldn’t access or query the data.
Business intelligence: Looker, Mode, or Tableau
What it is: Tools to create dashboards and visualize all types of data. Helps track how all aspects of your business is performing (sales, revenue, product usage, etc).
Why you don’t need it now: Out of the box tools like Amplitude (even Google Sheets) will be faster and give you whatever information you need.
These tools rely on SQL. SQL is not the best language for exploring product analytics, and as such, BI tools are not the best tools for exploring product analytics and are not a replacement for something like Amplitude, Mixpanel, or Heap.
Why you might need it in the future: This will probably be one of the main tools you use in the future to run your company.
If you’d like our take on some other tools you’re curious about, please do give us a shout. We love talking about this stuff, and we especially love hearing people’s experiences with these tools.
If you want to implement these tools quickly – or if you’re already using some of these tools and the maintenance is painful – please consider using Freshpaint. Freshpaint automatically collects data from your site or app, and in one click sends it to 100+ analytics, product, and marketing tools. You can get started for free, and if you’re a YC company in the recent batch Freshpaint is totally free.
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