Metrics for Startups - Tetuan Valley Startup School Fall Session, 2013

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Presentation given to Tetuan Valley startup school students during the fall of 2013. Introduction to metrics for startups, with examples from 24symbols

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Metrics for Startups - Tetuan Valley Startup School Fall Session, 2013

  1. 1. Metrics: because everything counts Justo Hidalgo @justohidalgo TAKE YOUR READINGS WHEREVER YOU GO
  2. 2. Hi! ■ Co-founder, • Worry about metrics ■ Data Integration and Management, Product Strategy and Innovation ■ Ph.D. in Computer Science on Data Integration and Web Automation ■ Ergo: Love Data  ■ @justohidalgo
  3. 3. reading + discovery + any device + mobile A service to read and discover digital books that works on any device
  4. 4. @justohidalgo
  5. 5. My goals today Metrics A/B Testing (if we have time!) Some tools Conclusions Eat pizza
  6. 6. What I won’t talk about Qualitative measurement • Competitive landscape, UX quality, … Standard financial metrics • Revenue, Balance, Burn rate, Runway, … All possible metrics in the world • As many as asses
  7. 7. Let’s talk about metrics and startups!
  8. 8. Watch this… 500startups’ Dave McClure
  9. 9. … and this… Carsonified’s Ryan Carson
  10. 10. … and read this!
  11. 11. AARRR Acquire Activate SEO SEM Campaigns Email Blogs … Landing Page Product Features … traffic Retain Content (blogs, articles, …) Emails Alerts … Refer Get Revenue Campaigns Emails … Shopping cart Subscriptions Lead Gen … social business
  12. 12. Traffic Metrics
  13. 13. Acquisition How do people find your site?
  14. 14. @justohidalgo
  15. 15. 15 seconds in “La 1”
  16. 16. http://www.youtube.com/watch?v=YSRlDqRUizg
  17. 17. Metrics Number of visits Distributions (per browser, region, …) Bounce rate Number of page views
  18. 18. AActivation How sticky is your site?
  19. 19. Metrics # Sign ins!!! 85000 Recency (time since user did something meaningful) 80000 75000 70000 65000 60000 55000 50000 45000 40000 Time per page Time on site (and churn as well!!!)
  20. 20. Biggest Apple Reseller in Spain 1-year subscription to 24s per iPad/Mac purchased @justohidalgo
  21. 21. AARetention Why do users come back?
  22. 22. Metrics. The standard ones… Number of unique/returning visitors Visits over time Average session time
  23. 23. … engagement… D/WAU: Daily/Weekly Active Users MAU: Monthly Active Users Stickiness = D/WAU MAU
  24. 24. … but also domain-specific!!! # Active readers # Books read per user Pages read per active reader per month Pages read per paid user per month
  25. 25. Social Metrics
  26. 26. AARReferral Do people talk about your site?
  27. 27. Types of users Visitor Contributor Distributor
  28. 28. Curation the unbeatable experience of a bookstore
  29. 29. Curation bookshelves Every user, a librarian
  30. 30. Virality Amplification rate: • (#shares, #RTs, …) K-Factor = AR * conversion rate • = 1: steady state • > 1: growth ➤ 1.4 < x < 2.1 => hot & viral!!! • < 1: decline
  31. 31. The Four Viral App Objectives % viral hosts Contact rate per active host Duration of each active host’s infectious time period Infection conversion Source: http://framethink.wordpress.com/2008/01/15/the-four-viral-appobjectives-aka-social-network-application-virality-101/
  32. 32. @justohidalgo
  33. 33. Business Metrics
  34. 34. AARRRevenue Do you make money?
  35. 35. Source: Lean Analytics – Alistair Croll, Ben Yoskovitz
  36. 36. Churn
  37. 37. Lifetime Value = 100% ARPU * Churn rate Source: http://blog.kissmetrics.com/how-to-calculate-lifetime-value/ LTV
  38. 38. LTV vs CAC Of course, LTV > CAC But, moreover: LTV > 3x CAC
  39. 39. Freemium. Conversion Rate Free Users Delayed subscription (test the service & engage) Premium Conversion Rate Time @justohidalgo
  40. 40. Price/page Freemium for Books. Price per page Profit threshold Growth Consolidation time/conversion rate @justohidalgo
  41. 41. Source: Startup Metrics, a love story - @andreasklinger
  42. 42. Source: Lean Analytics – Alistair Croll, Ben Yoskovitz
  43. 43. One key question for the whole AARRR cycle ■ How effective is a web page compared to another? ?
  44. 44. What’s A/B Testing? Version A Visitors are randomly distributed Version B time 1200 new users 1000 new users Version A is better than B
  45. 45. What should you test?  The call to action’s (i.e. the button’s) wording, size, color and placement,  Headline or product description,  Form’s length and types of fields,  Layout and style of website,  Product pricing and promotional offers,  Images on landing and product pages,  Amount of text on the page (short vs. long) … anything that you think it might affect your Key Metrics.
  46. 46. Is A/B testing perfect? Very good for ONE-SINGLE-GOAL projects where the KPI can be measured by counting actions • E.g. Downloads vs Quality perceived Granularity of the A/B test is paramount • If “A” better than “B” or is it just that the headline in B is horrible, but the rest is much much much better than “A”? A/B testing is suboptimal* * Recommended: http://untyped.com/untyping/2011/02/11/stop-ab-testing-andmake-out-like-a-bandit/
  47. 47. Analytics Heatmaps Social media
  48. 48. Conclusions
  49. 49. @justohidalgo
  50. 50. 2. Have someone taking care of it
  51. 51. 3. Only measure what you truly care about @justohidalgo
  52. 52. But again, choose right
  53. 53. 4. Beware vanity metrics…
  54. 54. … they may hide an awful truth
  55. 55. Thanks for your time! Justo Hidalgo http://www.loscuentosdelabuelo.com jhidalgo@24symbols.com @justohidalgo
  56. 56. Credits Olivier Guin, from The Noun Project Dima Yagnyuk, from The Noun Project Redesign from Otl Aicher’s icon, from The Noun Project Axsys, from The Noun Project Monika Ciapala, from The Noun Project Rob Schill, from The Noun Project Martin Karachorov, from The Noun Project Alexandre Mendes, from The Noun Project All other icons from The Noun Project Publishers trademarks, logos and brands belong to their respective companies.

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