An introduction to Lean Analytics (for #LeanLondon)

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A quick introduction to the core principles of Lean Analytics -- what makes a good metric, how to track metrics, what to track based on your business model and stage. As well, covers the One Metric That Matters and shares a couple case studies.

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An introduction to Lean Analytics (for #LeanLondon)

  1. 1. LEAN ANALYTICSUsing data to build a better startup faster Ben  Yoskovitz @byosko
  2. 2. A little about me… Acquihired Instigator Blog Exited (but Big win! not a real win)
  3. 3. YEAR ONE LABSYEAR ONE LABS
  4. 4. Pre-order today! (please)http://leananalyticsbook.com
  5. 5. what. why. when. how.✓what makes a good metric✓the one metric that matters✓business model flipbook✓lean analytics stages✓problem / solution canvas✓analytics in the enterprise http://leananalyticsbook.com
  6. 6. Case studies galore
  7. 7. WE’RE ALL LIARS
  8. 8. DON’T IGNOREYOUR GUT
  9. 9. Your Gut Increased + = likelihood ofLean Analytics success
  10. 10. PARTONE The basics of good analytics.
  11. 11. Analytics is the measurementof movement towards yourbusiness goals.
  12. 12. In a startup, the purpose of analytics is to iterate to product/market fit before the money runs out.
  13. 13. Five categories of metrics to think about: • Qualitative vs. quantitative • Vanity vs. actionable • Exploratory and reporting • Leading vs. lagging • Correlated vs. causal
  14. 14. What makes a great metric? • Comparative over time, against a baseline • Understandable • Ratios and rates, not numbers • Improves the accuracy of your predictions • Your behavior changes when it does
  15. 15. PARTTWOWhat metricsshould you track?
  16. 16. What you should track is dependent on: Your basic The stage your business model startup is at How you make $$ Lifecycle • E-­‐commerce • Empathy • SaaS • S>ckiness • Free  mobile  app • Virality • Media  site • Revenue • Collabora>ve  content  site • Scale • Two-­‐sided  marketplace
  17. 17. Example business model: E-commerce Quick summary: • Are you focused on loyalty or acquisition? • Don’t overlook logistics, delays, and ratings • Old “average conversion rates”
  18. 18. Loyalty or acquisition?How many Then you are in Your customers You are Focus oncustomers buy this mode will buy from you just likea second timein 90 days? Low CAC, 1-15% Acquisition Once 70% high of retailers checkout15-30% Hybrid 2-2.5 20% Increasing per year of retailers returns Loyalty, >30% Loyalty >2.5 10% inventory per year of retailers expansion (Thanks to Kevin Hillstrom for this.)
  19. 19. Don’t forget the real world Shipping time, stock availability, logistics, ratings, and other factors haveShipping time, stock availability, a real impact on most e-DON’T FORGET commerce companies.and other factors logistics, ratings, have a real impact on most e-THE REAL WORLD commerce companies.
  20. 20. Case study:WineExpress increases revenues • Stage: Revenue • Model: E-commerce • Exclusive wine shop partner of the Wine Enthusiast catalog and website. • “Wine of the day” page is highly trafficked, needed optimization
  21. 21. A
  22. 22. B
  23. 23. WineExpress: Before and After 41% increase  in  revenue   per  visitor
  24. 24. Lifecycle stage Discover a known need within a sizeable market Identify a solution reachable people will pay for Develop and validate a viable product to sell profitably Create a sustainable business model Attract and appease investors Find a successful exit
  25. 25. Where’s the risk? Real need? Key: Empathy Right solution? Key: Stickiness Key: Growth rate Good product? Key: Virality Sustainable biz? Key: Revenue Healthy market? Successful exit? Key: Scale
  26. 26. Case study: Buffer goes fromStickiness to Scale (through Revenue) • Stage: Scale • Model: SaaS (consumer) • Popular social sharing application. • Focused primarily on customer acquisition • Charged from day one
  27. 27. Buffer charges early to prove peoplewant the problem solved of visitors create an account 20% (acquisition / Empathy) of sign-ups become active 64% (start of Stickiness) of sign-ups return in the 1st month 60% (engagement / Stickiness) of sign-ups are active after 6 months 20% (engagement / Stickiness) convert from free to paid 2% (Revenue)
  28. 28. PARTTHREE The One Metric That Matters
  29. 29. Choose only one metric.
  30. 30. Benefits of the OMTM: • It should answer the most important question you have • There’s a clear goal • Focuses the entire company • Instills a culture of experimentation
  31. 31. Case study: Timehop aims forvirality through content sharing • Stage: Virality • Model: Mobile app • Social network around the past • Focused on virality (but not the viral coefficient)
  32. 32. The One Metric That Matters:Content sharing • Focused on % of daily active users that share content • Aiming for 20-30% of daily active users to share content “All that matters now is virality. Everything else—be it press, publicity stunts or something else—is like pushing a rock up a mountain: it will never scale. But being viral will.” - Jonathan Wegener, co-founder
  33. 33. METRICS ARE LIKESQUEEZE TOYS
  34. 34. Thank you.follow me. email me. @byoskoinstigatorblog.com byosko@gmail.com subscribe. pre-order! leananalyticsbook.com

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