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Analytics for startups
 

Analytics for startups

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    Analytics for startups Analytics for startups Presentation Transcript

    • Analytics for Startups Lars Lofgren - April 2014
    • Hit me up @larslofgren
    • 1 The data problems that startups face We’ll cover… 2 Gateway metrics 3 4 gateways and the metrics for each #KISSwebinar
    • I’m not going to spend any time on Google Analytics.
    • How healthy is this business?
    • 1 MRR, Churn, LTV, acquisition cost It’d be great to track metrics like these: 2 Virality, DAU, MAU 3 Average order value, repurchase rate #KISSwebinar 4 Funnels and conversions
    • But you don’t have any data yet
    • Your data is in a constant rate of decay
    • You data is messy
    • Use metrics that measure your biggest problem. Ignore the rest.
    • Gateway Metrics
    • When picking metrics, always ask yourself: What’s my biggest constraint right now and which metric will tell me if I’m making progress?
    • You need to do the right things in the right order.
    • Gateway #1: Is your idea any good?
    • Your main constraint: Getting anyone to care about your idea.
    • Your main metric: Get someone to pay or use your product regularly.
    • Bad metrics for this gateway: 1 Asking people if they’ll pay 2 AdWords clicks 3 Beta or waiting list signups 4 Traffic
    • Gateway #2: Is your product good enough?
    • Your main constraint: Having a product that’s good enough to build a business on.
    • Your main metric: Ask 500 users the Product/Market Fit Question
    • What is the P/M Fit Question? 1 Very disappointed 2 Somewhat disappointed 3 Not disappointed (it isn’t really that useful) How would you feel if you could no longer use [your product]?
    • Your goal for the P/M Fit Question: At least 40% of users should say “Very disappointed.” *Sean Ellis and Hiten Shah get credit for this one.
    • How do you get to the first 500 users/customers? Hustle.
    • The P/M Fit Question isn’t perfect, verify with a retention metric.
    • Gateway #3: Can you grow?
    • Your main constraint: Acquiring customers consistently from at least one channel.
    • You have plenty of options to choose from: 1 Inbound (Google, Content, Social) 2 Paid (PPC, Affiliates) 3 Virality (Invites, Referrals)
    • Pick just one to start Work on your channel for at least 3 months. Assume it’ll work and get the resources needed to execute.
    • Your main metrics: Your main business metric and acquisition funnel.
    • Main business metrics: 1 SaaS: Monthly Recurring Revenue 2 Ecommerce: Monthly Revenue 3 Consumer Tech: Monthly Active Users
    • SaaS Funnel
    • Ecommerce Funnel
    • Consumer Tech Funnel
    • Why not cost per acquisition or lifetime value? You have no idea how much it costs to acquire customers or how much they’ll spend (yet).
    • Gateway #4: Do you have a stable model?
    • Your main constraint: In order to keep scaling, you need a stable model for your business.
    • Your main metrics: Depends entirely on what business model you have.
    • The SaaS Model 1 LTV is at least 3x acquisition cost 2 Recover acquisition cost within 12 months 3 Get monthly churn below 2%
    • The Ecommerce Model 1 2 3 It’s all about profit margin.
    • The Consumer Tech Model 1 Virality > 1 2 Usage 3 out of 7 days 3 30% of users active day after signup 4 Organic growth of 100s signups/day. 5 Clear path to 100,000+ users *Andrew Chen’s “Zero to Product/Market Fit”
    • Find someone in your industry that knows the key benchmarks.
    • Finally, get serious with data.
    • If you have a sales team, pile data into your CRM.
    • If consumer tech, do everything in-house.
    • Google Analytics plus an internal database will take you far.
    • Start with constraints, hack together what you need to measure them.
    • How to get data you really need: 1 One team owns data quality. 2 Hire a data engineer. 3 Clean up and integrate your data. 4 Use customer analytics. 5 Build a Growth Team.
    • Q&A Time! Lars Lofgren @larslofgren llofgren@kissmetrics.com