Cohort analysis the basics

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Presentation on cohort analysis as a better alternative to growth metrics for startups that are pre-market fit. Presented at Imperial College, London in Feb 2012.

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Cohort analysis the basics

  1. 1. Measuring success: Cohorts and Product/Market Fit a.k.a WTF are we doing and why!? @stephenrapoport | Crashpadder.com | @londonFAIL
  2. 2. A bit about me• Founder - Crashpadder.com (Sold to Airbnb)• Organiser – Failboat Londonhttp://www.meetup.com/Failboat-London/ @stephenrapoport | Crashpadder.com | @londonFAIL
  3. 3. Summary• What is a startup?• What is your startup?• How do most measure success?• How should you measure success?• Corhort analysis? @stephenrapoport | Crashpadder.com | @londonFAIL
  4. 4. What is a startup?• “Organisation trying to create value in an environment of extreme uncertainty.” • Eric Ries, The Lean StartupIf you’re a disruptive startup, uncertainty is x10: – Product fit – Model – Value Hypothesis @stephenrapoport | Crashpadder.com | @londonFAIL
  5. 5. What are you doing?• Name?• Model/elevator?• Stage?• Founders – Tech/Commercial/Other @stephenrapoport | Crashpadder.com | @londonFAIL
  6. 6. Measuring progressWhat is usual?• Users• Revenue• Basket value• Dwell/stickiness @stephenrapoport | Crashpadder.com | @londonFAIL
  7. 7. What are you measuring?Who’s feeling brave?Be honest – NOT what should you be measuring. @stephenrapoport | Crashpadder.com | @londonFAIL
  8. 8. Measuring progress Revenue140 What does this actually tell us about the120 company’s growth?100 80 What might better 60 metrics be? 40 20 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec @stephenrapoport | Crashpadder.com | @londonFAIL
  9. 9. Product/market fit“Being in a good market with a product thatsatisfies the needs of that market.” - Marc Andreessen Users 3500 3000 2500 2000 1500 Users Aka ‘The Hockey Stick’ 1000 500 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec @stephenrapoport | Crashpadder.com | @londonFAIL
  10. 10. Problem/solution hypothesis• Who is this for?• What pain are you solving?• What is their current solution?• Why is yours better?• Do they care? @stephenrapoport | Crashpadder.com | @londonFAIL
  11. 11. What should you be measuring?• Lifetime value of new users• How has that changed since new features were added?• Is our problem/solution hypothesis holding true? @stephenrapoport | Crashpadder.com | @londonFAIL
  12. 12. What is the user’s value chain?Track the lifetime journey of one of your users.• Register?• Transact?• Review?• Share on social networks?• Refer/Resell? @stephenrapoport | Crashpadder.com | @londonFAIL
  13. 13. CohortsSegmenting your users as a means to assesswhether you are getting better rather thansimply bigger. - Dan Hill, Technical Ninja @ Crashpadder.com @stephenrapoport | Crashpadder.com | @londonFAIL
  14. 14. E.g. Cohort Analysis250200150 Jan Feb100 Mar50 0 Visit Register Purchase Recommend @stephenrapoport | Crashpadder.com | @londonFAIL
  15. 15. SummaryGet BETTER, then get BIGGER(whilst still getting better…..) @stephenrapoport | Crashpadder.com | @londonFAIL

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