Web analytics tool of choice for startups

What is the best (preferred) free and/or paid web analytics tool(s) available for startups?

EDIT: Can any free web analytics really compare to a paid web analytics tool?

It all depends on what you are looking to extract from your analytics, the right tool changes according to the metrics that are most important for you. I'll put some of my favorites and the reasons why and when I use each of them:

1. Google Analytics : Free, decent and gives you more than enough data if you are the average Joe, learning how to interpret this data and act upon it is a job all in itself. Good post to start I would say Avinash Kaushik's Google Analytics Maximized.
2. Clicky : Clicky shares the same problem of Google Analytics, javascript based etc, but I use it to delve deeper into real-time results. If I'm running a campaign and I need short term data, I always use Clicky. A good article to get started: How Clicky can maximize your web marketing efforts.
3. Web Log Analyzers : I'm piling up a whole category of analytics programs here because what matters is that with this tool you will get RAW DATA, and it will be the VERY complete but making sense of it will also take a while. Although there are free versions in AWStats I personally use Advanced Web Stats Since it is more powerful.
4. Specific page tools : These ones work the most when you are analyzing and funneling on a page by page basis, a good example would be Crazyegg, KISSMetrics and Clicktale They will give you the best bang for your buck if you are looking to optimize funnels and understanding your users from that perspective, but I would not rely on them sitewide.

This is a problem of understanding if you have a screw or a nail, then choosing the right tool for it. Hope this helped.

I'm partial to Clicky (getclicky.com ). It's not free, but it's darn cheap and it's awesome.

Google Analytics is also quite good, of course, and it's free.

There are also more specialized analytics tools like ChartBeat (which I didn't love) and KISSMetrics.

Google Analytics is free. StatCounter has a free model and paid one.

xiti (now 'at internet') offers good paid analytics tools. It is originally a French company, now with customers from Canada and UK (as far as I know).

I am not a direct customer, but I am a user (our ad network is paying for us) and the service is great and the numbers seems to be closer to reality than with other analytics tool.

Depends precisely on the business requirement for analytics information during the startup phase.

Do you just need a general overview ? Then google or piwik are free and useful.

Do you need something highly specific such as realtime geolocation and mobile client types to make day-to-day business decisions ? Then you need to look at the specifics of each offering.

The best answer for your specific needs might be paid, free or internal dev or some blend thereof.