The Real Story on How Google Analytics Got Started

There’s nothing small about Google Analytics. After all, it’s used by around half of the world’s most popular websites.

While current startups are still dreaming of the day when they can use the phrase “market share,” Google Analytics already has the largest market share in its industry.

But this is far from how it all began. Before being acquired by Google, a small web consultancy team created a product called Urchin. This is the story of how they made it big.

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Where it all started

In 1995, the founders of Google Analytics built a company called Web Depot, which provided web development and hosting services to San Diego businesses. It had four co-founders: Paul Muret was both the CEO and the engineering/technical end of the company, Jack Ancone was the CFO and brothers Brett and Scott Crosby took care of business development and sales.

Two years later, Paul wrote the first version of their analytics software, Urchin. It was planned to just be part of their services until he had a lightbulb moment:

“One of our large clients was struggling with the fact that it took 24 hours to process a single day’s worth of website tracking results. We tried out our new analytics tool, and it took 15 minutes to process the same data. That’s when the light bulb went off – that Urchin was for real.”

So the team were faced with a choice: keep providing web consultancy services, or pivot and focus on building and selling Urchin?

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They chose the latter and slowly moved away from doing hosting and development work. It wasn’t an easy process, but it was a move that paid off in the long run. As Brett Crosby said:

“We built our business around a very scalable product, which allowed us to do things like target hosting companies and get massive numbers of users with one deal, rather than focusing on one very complex deal.”

As they started landing top web hosts as customers, Urchin quickly became the standard analytics software for thousands of websites.

As a result, it didn’t take long for Google to notice them.

From Urchin to Google Analytics

When startup founders attend trade shows, there are some common things they expect to achieve. Get new customers. Generate interest about their product. Or if they’re really lucky, bring in some new investors.

So when Google representatives approached the Urchin team at a trade show in 2004, it’s likely that the encounter was beyond anything they expected at the time. An offer was made, and negotiations began, which would take several months to wrap up.

The deal eventually went through on Brett Crosby’s wedding day on March 2005.

“I was in my tux, literally just about to walk down the aisle when I signed the contract,” he recalled in an interview.

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Where Are They Now?

After the acquisition, Urchin’s web-hosted analytics software, Urchin On Demand, became the Google Analytics we’re now familiar with. Their client-hosted version, simply named Urchin, was rebranded as “Urchin from Google”.

But more than just the product names changed after the acquisition.

Paul Muret became the Director of Engineering at Google Analytics. After spending more than a decade working on the product, he gave his first keynote speech during the Google Analytics Summit last October.

Jack Ancone became the Senior Director of New Business Development at Google.

Brett Crosby is now the Director of Product Marketing at Google. He also sits on the board of directors at Euclid Inc., which provides in-store consumer analytics for retailers.

Like the other founders, Scott Crosby also worked for Google as Senior Program Manager after the acquisition. Upon joining Google he made 2 key decisions: to live in San Francisco and not drive to work. So with his brother Brett, he founded SF2G, a community that promotes cycling to work. He left Google in 2010 and is also now the COO of Euclid Inc.

As for Urchin, while its web-hosted version lives on as Google Analytics, the client-hosted version wasn’t so lucky. Though they released 3 more version upgrades since the acquisition, sales for Urchin software were discontinued on March 2012.

And the moral is…

Google Analytics has a history that’s as long and as colorful as the reports it generates. Even if its startup days were over a decade ago, there are a few things up and coming entrepreneurs can learn from this story.

Startup Lesson #1 – A successful idea doesn’t need to be unique or flashy. But it has to be useful.

The Urchin team’s “big idea” wasn’t their development and hosting services, but the analytics tool they developed to process website tracking results.

Analytics software isn’t really the first thing that comes to mind when you try to think of a product idea that could change the world.

But the thing is, they did change the world – at least online. They provided something faster and more user-friendly than what was available at the time, which became the widespread standard.

Startup Lesson #2 – Recognize your opportunities for pivoting.

Sure, Urchin software could have been just another feature in their web hosting and development services, but if the team had persevered with their original business plan, they wouldn’t have realized the full potential of their new product.

Some Things Don’t Change

It’s clear that whatever they pursue, the founders of Google Analytics are still passionate about empowering people by giving them easy access to important data. The Crosby brothers are still working in analytics, only now it’s for brick-and-mortar retail interactions. And Paul Muret is still working on the product he’s been building all these years.

While there are lessons to be learned, the history of Google Analytics proves how successful you can be despite hurdles, pivots and taking risks, which is encouraging for those of us in the early chapters of our own startup stories.