Isi Fischer at AMDthanks very much, this is not only helpful but also great to listen to, I´d love to get the ppt and see more!3 years ago
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ocabreraWow, love it, AARRR! will become my next war cry! Thanks Mr. McClure!4 years ago
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Blacksonville Community Network (BCN) at Blacksonville Community Network (BCN)This was an awesome presentation DAVE. Although you were a bit rushed, the content and depth of your recommendations could save a developer or marketer a lifetime. I will be following more of your content - marketing suggestions. Please post or send me some feedback on Blacksonville as you learn more about the brand. Thanks for making this accessible on the web!4 years ago
Startup Metrics for Pirates (FOWA/Miami, Feb 2009)Presentation Transcript
Startup Metrics for Pirates: AARRR! Future of Web Apps (FOWA) Miami, February 2009 Dave McClure, Founders Fund http://www.foundersfund.com/ http://500hats.typepad.com/ http://slideshare.net/dmc500hats/
Startup Metrics for Pirates
A cquisition: users come to site from various channels
A ctivation: users enjoy 1 st visit: " happy ” experience
R etention: users come back , visit site multiple times
R eferral: users like product enough to refer others
R evenue: users conduct some monetization behavior
(note: If you’re in a hurry, watch 5 min video after slide 23) AARRR !
Note: eventually need to turn Users / Usage -> Money
AARRR!: 5-Step Startup Metrics Model Website.com R evenue $$$ Biz Dev Ads, Lead Gen, Subscriptions, ECommerce A CQUISITION SEO SEM Apps & Widgets Affiliates Email PR Biz Dev Campaigns, Contests Direct, Tel, TV Social Networks Blogs Domains R etention Emails & Alerts System Events & Time-based Features Blogs, RSS, News Feeds
Just Gimme the GOOD Metrics. Users, Pages, Clicks, Emails, $$$...?
Q: Which of these is best? How do you know?
1,000,000 one-time, unregistered unique visitors
500,000 visitors who view 2+ pages / stay 10+ sec
200,000 visitors who clicked on a link or button
20,000 registered users w/ email address
2,000 passionate fans who refer 5+ users / mo.
1,000 monthly subscribers @ $5/mo
the good stuff.
3 Key Metrics Frameworks: biz model, conversion dashboard, mktg channels
Define 1-Page Biz Model : customer segments + desired actions / behaviors
Identify critical Conversion Events & Dashboard for each segment & prioritize
Example Marketing Channels disclaimer: estimates of vol, cost/user, time & effort are subjective – actual costs are dependent on your specific business
M AARRR keting Plan
Marketing Plan = Target Customer Acquisition Channels
3 Important Factors = Volume (#), Cost ($), Conversion (%)
Measure conversion to target customer actions
Test audience segments, campaign themes, Call-To-Action ( CTA s)
[Gradually] Match Channel Costs => Revenue Potential
Increase Vol. & Conversion, Decrease Cost, Optimize for Revenue Potential
Avg Txn Value ( ATV ), Ann Rev Per User ( ARPU ), Cust Lifetime Value ( CLV )
Design channels that (eventually) cost <20-50% of target ATV, ARPU, CLV
Consider Costs, Scarce Resource Tradeoffs
Actual $ expenses
Marketing time & resources
Product/Engineering time & resources
Cashflow timing of expense vs. revenue, profit
One Step at a Time.
Make a Good Product : Activation & Retention
Market the Product : Acquisition & Referral
Make Money : Revenue & Profitability
“ You probably can’t save your Ass and your Face at the same time… choose carefully .” – DMC
Summary
Measure Stuff. Keep It Simple.
5 Steps: Startup Metrics for Pirates ( AARRR !)
3 Items: Biz Model, Conversion, Mktg Channels
Iterate & Optimize. Feedback Loop. (Loop. Loop).
One Step at a Time.
Links & Resources
Additional References:
“ Influence: The Psychology of Persuasion ”, Robert Cialdini (book)
“ Putting the Fun in Functional ”, Amy Jo Kim (etech 2006 preso)
“ Futuristic Play ”, Andrew Chen (blog)
“ Don’t Make Me Think ”, Steve Krug (book)
“ Designing for the Social Web ”, Joshua Porter (book, website)
“ Startup Lessons Learned ”, Eric Ries (blog)
“ Customer Development Methodology ” Steve Blank (presentation)
Appendix
Startup Metrics Activation
Website.com
Activation Criteria:
10-30+ seconds
2-3+ page views
3-5+ clicks
1 key feature usage
do LOTS of landing page & A/B tests – make lots of dumb guesses & iterate FAST Activation SEO SEM Apps & Widgets Affiliates Email PR Biz Dev Campaigns, Contests Direct, Tel, TV Social Networks Blogs Domains
Activation What do users do on their first visit?
Example Activation Goals
Click on something!
Account sign up / Emails
Referrals / Tell a friend
Widgets / Embeds
Low Bounce Rate
Activation Tips
Less is more
Focus on user experience / usability
Provide incentives & call to actions
Test and iterate continuously
Activation What do users do on their first visit?
Key Metrics to Track
Pages per visit
Time on site
Conversions
Activation
Tools
Crazy Egg (Visual Click Mapping)
http://crazyegg.com
Google Website Optimizer (A/B & Multivariate Testing)
Retention SEO SEM Apps & Widgets Affiliates Email PR Biz Dev Campaigns, Contests Direct, Tel, TV Social Networks Blogs Domains Emails & Alerts System Events & Time-based Features Blogs, RSS, News Feeds
Website.com Focus on driving referrals * after * users have a “ happy ” experience; avg score >= 8 out of 10 Referral Acquisition SEO SEM Apps & Widgets Affiliates Email PR Biz Dev Campaigns, Contests Direct, Tel, TV Social Networks Blogs Domains Retention Emails & Alerts System Events & Time-based Features Blogs, RSS, News Feeds
Referral How do users refer others?
Referral Methods
Send to Friend: Email / IM
Social Media
Widgets / Embeds
Affiliates
Referral Viral Growth Factor
Viral Growth Factor = X * Y * Z
X = % of users who invite other people
Y = average # of people that they invited
Z = % of users who accepted an invitation
A viral growth factor > 1 means an exponential organic user acquisition.
Website.com Revenue This is the part *you* still have to figure out… (we don’t know jack about your business) R evenue $$$ Biz Dev Ads, Lead Gen, Subscriptions, ECommerce Acquisition SEO SEM Apps & Widgets Affiliates Email PR Biz Dev Campaigns, Contests Direct, Tel, TV Social Networks Blogs Domains Retention Emails & Alerts System Events & Time-based Features Blogs, RSS, News Feeds
Revenue How do you make money?
Revenue Tips
Don’t Rely on AdSense (only)
Start Free => 2% “ Freemium ”
Subscription / Recurring transactions
Qualify your customers -> Lead generation (arbitrage)
Sell something! (physical or virtual)
Revenue
Resources & Tools
Revenue Metrics (Andrew Chen)
http://tinyurl.com/47r63a
How to Create a Profitable “Freemium” Startup (Andrew Chen)
http://tinyurl.com/8z9ygk
2008 Affiliate Marketing Review (Scott Jangro)
http://tinyurl.com/86wak4
Be Bold. Be Humble.
Stuff That Matters:
Passion for Problem/Solution + Hypothesis of Customer Lifecycle
1-page Business Model : Prioritized List of (Users + Conversions)
Critical, Few, Actionable Metrics + Dashboard of Measured User Behavior
Cedric Giorgi
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