One major flaw with Google Analytics is its last click attribution which simply distorts your view of where traffic is coming from. If visitor first came via a Tweet, reads about your product and the next day he searches or types in your web address, GA would attribute the last traffic source as the real source of this visitor. You would never realize that it was tweet that brought him to the website.
Seldom any visitor converts on first visit and so it becomes extremely hard to calculate true conversion rate for different mediums in GA. How would you know which medium is most effective?
I haven't worked with this setting myself so I can't say whether it works on all traffic sources or only campaigns. First Referrer information is stored in one of the GA cookies, so it's always available on the page, even if it's not getting passed to the GA servers. If you really wanted to get creative, you could yank it out of the cookie and throw it into a Custom Variable. This has the advantage of giving you First and Last Attribution, in different reports.
What are really good resources on using Google Analytics? I don't check more than my pageviews, referrers and popular search terms, but I know that barely scratches the surface of what it can do.
A really great resource is Google's Conversion University. They have video lessons and if you want a test you can take at the end to get certified. (disclaimer: I am certified)
I'd suggest goals and segmentation are two of the most interesting things you should look into. Goals allow you to track things like conversions. E.g. how many people filled out my contact form, how many people purchased something, etc. Segmentation allows you to see how groups of users are behaving. E.g. are my first time visitors looking at as many pages as my returning visitors?
I was thinking of the cycle that startups typically go through in trying to discover what makes their business tick as I wrote the article, but you're completely right that it's also applicable to pretty much any company on the web.
I think Abe Lincoln said "If you look for the bad in people expecting to find it, you surely will."
Because Alan (the author) learned and implemented this advanced GA strategy in our startup. It's something specifically that should be done in startups that will help increase profitability. Basically, it's all about using GA in startups. I think that qualifies for adding "startup" to the title ;)
You should also have a look at my server-side Google Analytics client http://code.google.com/p/php-ga which opens the door for many many advanced usages.
Seldom any visitor converts on first visit and so it becomes extremely hard to calculate true conversion rate for different mediums in GA. How would you know which medium is most effective?