Introduction to Lean Analytics for Lean Startup Circle SF
An introduction to Lean Analytics for the Lean Startup Circle SF event. Covers the basic topics of analytics, Lean Analytics framework, and a number of case studies from companies such as Circle of Friends, Localmind, Static Pixels and more.
Finding the answer in the data•Started as Circle of Friends•Leveraged Facebook early•Grew to 10M usersBut engagement sucked!
Moms are crazy!(in a good way)Engagement solved!• Messages to one another were on average 50% longer.• 115% more likely to attach a picture to a post they wrote.• 110% more likely to engage in a threaded (i.e. deep) conversation.• Friends, once invited, were 50% more likely to become engaged users.• 180% more likely to click on Facebook news feed items.• 60% more likely to accept invitations to the app.
Historical metricthat shows youhow you’re doing:reports the news.Number today thatshows a metrictomorrow: makesthe news.Try and get here.Start here.Lagging Leadingvs.
h"p://www.ﬂickr.com/photos/bloke_with_camera/401812833/sizes/o/in/photostream/Analytical Superpowers(or what the heck is growth hacking?)
110100100010000Ice cream consumption DrowningsJan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec
SummerIce creamconsumptionDrowningCorrelatedCausalCausalTwo variables thatchange in similar ways,perhaps becausethey’re linked tosomething else.CorrelatedAn independent factorthat directly impacts adependent one.Causalvs.
Correlation lets youpredict the futureCausality lets youchange the future“I will have 420 engaged usersand 75 paying customers nextmonth.”“If I can make more ﬁrst-timevisitors stay on for 17 minutes Iwill increase sales in 90 days.”Find correlation Test causalityOptimize thecausal factorCausality is a superpower, because it letsyou change the future.
EMPATHYSTICKINESSGROWTHRATEVIRALITYREVENUESCALELean AnalyticsStagesI’ve found a real, poorly-met need thata reachable market faces.I’ve ﬁgured out how to solve theproblem in a way they will adopt andpay for.I’ve built the right product/features/functionality that keeps users around.The users and features fuel growthorganically and artiﬁcially.I’ve found a sustainable, scalablebusiness with the right margins in ahealthy ecosystem.“Gates” needed tomove forward
•Stage: Empathy•Model: UCG/Mobile•Real-time Q&A platform tied to locations•Needed to ﬁnd out if a core behavior--answering questions about a place--happenedenough to make the business realLocalmind hacks Twitter
Localmind hacks Twitter•Before writing a line of code, they wanted to answer this question•This was their biggest risk: if questions went unanswered, the experience would suckWould people answer questions?Test results•The response rate to tweeted questions was very high•Good enough proxy to de-risk the solution and convince the team to continueRan an experiment on Twitter•Tracked geolocated tweets in Time Square•Sent @ messages to people who had just tweeted, asking a question about the area
•Stage: Empathy / Stickiness•Model: E-Commerce•Eco-friendly prints of your photos•Originally tied exclusively to Instagram andbuilt a custom InstaOrder featureStatic Pixels simpliﬁes to focus onimmediate success
★ 2x transactions★ lower bounce rate★ sign-in goals increasedwith InstaOrderClick checkoutSign into PayPalConﬁrmation pageConﬁrm orderBack to PayPalAuthorize pre-approved paymentsSuccess pagewithout InstaOrderClick checkoutSign into PayPalConﬁrmation pageConﬁrm orderSuccess pageOptimize for 1st time purchases orrepeat orders?
One MetricThat Matters.How It All Comes TogetherThe business you’re inE-Com SaaS Mobile 2-Sided Media UCGEmpathyStickinessViralityRevenueScaleThestageyou’reat
•Stage: Scale•Model: SaaS•SEO toolkit (product suite)•Reduced KPIs to focus on Net AddsSEOMoz reduces the KPIs ittracks
If Net Adds: Why & Next Steps:Net Adds = “business health”indicator•Was a marketing campaign successful?•Were customer complaints lowered?•Was a product upgrade valuable?• Can we acquire more valuable customers?•What product features can increase engagement?• Can we improve customer support?•Are the new customers not the right segment?• Did a marketing campaign fail?• Did a product upgrade fail somehow?• Is customer support falling apart?
Choose only one metric anddraw a line in the sand.Choosing your OMTM isn’t enough...
•Stage: Virality•Model: Mobile app•Social network around the past•Focused on virality (but not theviral coefﬁcient)Timehop aims for virality throughcontent sharing
• Focused on % of daily active users thatshare content• Aiming for 20-30% of daily active usersto share content“All that matters now is virality. Everything else—be itpress, publicity stunts or something else—is likepushing a rock up a mountain: it will never scale. Butbeing viral will.” - Jonathan Wegener, co-founderThe One Metric That Matters:Content sharing
Some interesting benchmarksGrowth5% / week (revenue or activeusers)Churn2% / monthEngaged visitors30% monthly users10% daily usersTime on site17 minutesPage load time< 5 secondsCLV:CAC3:1Mobile ﬁle size< 50MBFree to paid2% of free users
Identify a key business problem,pick the OMTM, draw a line in thesand, and get started.Time to experiment
Draw a new linePivot orgive upTry againSuccess!Did we move theneedle?Measure theresultsMake changes inproductionDesign a testHypothesisWith data:ﬁnd acommonalityWithout data:make a goodguessFind a potentialimprovementDraw a linePick a KPIThe Lean Analytics Cycle