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Analytics for Startups - 500 Startups Accelerator Marketing Hell Week

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Analytics for Startups - 500 Startups Accelerator Marketing Hell Week

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Analytics for Startups - 500 Startups Accelerator Marketing Hell Week

  1. 1. Andy Young // @andyy // andy@500.co How do I Analytics? a practical guide for pragmatic startups
  2. 2. Andy Young // @andyy // andy@500.co Hi, I’m Andy! @andyy #fb PhotobyDanTaylor-dan@heisenbergmedia.com
  3. 3. Andy Young // @andyy // andy@500.co Wait what, why? Analytics?
  4. 4. Andy Young // @andyy // andy@500.co What do we measure, and why? Vanity metrics Revenue metrics Conversion rate metrics Pirate metrics.. We need to know how we’re doing.
  5. 5. Andy Young // @andyy // andy@500.co If you're not keeping score there's no point playing the game - you'll never know if you're winning or not - @distrodom
  6. 6. Andy Young // @andyy // andy@500.co Today’s tools make it super-easy to track things Google Analytics Mixpanel Localytics KissMetrics Branch Metrics..
  7. 7. Andy Young // @andyy // andy@500.co Today’s tools make it super-easy to track things BUT they also make it really easy to - become overwhelmed with data - focus on the wrong things
  8. 8. Andy Young // @andyy // andy@500.co Typical analytics challenges/pitfalls Drowning in too much data Failure to select + focus on the top metrics that matter Not tracking the data you need to answer key questions
  9. 9. Andy Young // @andyy // andy@500.co Why analytics? 1. How are we doing? - are KPIs on the right track? 2. What are the results of our experiments? - so we can learn 3. What’s happening right now? - did something great or terrible just happen?
  10. 10. Andy Young // @andyy // andy@500.co How are we doing?
  11. 11. Andy Young // @andyy // andy@500.co How’re we doing? 1. Identify top-level KPI
  12. 12. Andy Young // @andyy // andy@500.co Identify top-level KPI it’s hard.
  13. 13. Andy Young // @andyy // andy@500.co Identify top-level KPI if you pick the wrong KPIs, you're screwed. If you pick KPIs and then ignore them, you're screwed. If you pick and monitor KPIs diligently, but don't assess everything you and your whole team does on the basis of whether your tasks are the most effective way to grow your KPIs, you're screwed.
  14. 14. Andy Young // @andyy // andy@500.co Identify top-level KPI How?
  15. 15. Andy Young // @andyy // andy@500.co Identify top-level KPI Keep it simple! The good news: there’s probably a pre-determined answer for what drives your business
  16. 16. Andy Young // @andyy // andy@500.co Identify top-level KPI There’s probably a pre-determined answer for what drives your business Spoiler: ultimately it’s $$$
  17. 17. Andy Young // @andyy // andy@500.co How’re we doing? There’s probably a pre-determined answer for what drives your business Commerce: # sales Subscription / SaaS: # subscribers Marketplace: # transactions
  18. 18. Andy Young // @andyy // andy@500.co How’re we doing? 1. Identify top-level KPI
  19. 19. Andy Young // @andyy // andy@500.co How’re we doing? 1. Identify top-level KPI 2. Next, add nuance
  20. 20. Andy Young // @andyy // andy@500.co How’re we doing? Nuance behind your top level KPI E.g. for commerce: # sales Nuance: average sale $; # customers
  21. 21. Andy Young // @andyy // andy@500.co How’re we doing? 1. Identify top-level KPI 2. Add nuance 3. Add drivers
  22. 22. Andy Young // @andyy // andy@500.co How’re we doing? Drivers behind your top level KPI E.g. for marketplaces: # transactions Drivers: # suppliers, # customers
  23. 23. Andy Young // @andyy // andy@500.co How’re we doing? 1. Identify top-level KPI 2. Add nuance 3. Add drivers 4. Add funnel for these drivers
  24. 24. Andy Young // @andyy // andy@500.co How’re we doing? 1. Identify top-level KPI 2. Add nuance 3. Add drivers 4. Add funnel for these drivers End up with AARRR
  25. 25. Andy Young // @andyy // andy@500.co How’re we doing? 1. Identify top-level KPI 2. Add nuance 3. Add drivers 4. Add funnel for these drivers Put in a spreadsheet (Template Google Sheet: http://bit.ly/kpi-sheet)
  26. 26. Andy Young // @andyy // andy@500.co - How’re we doing? - it.ly/kpi-sheet -
  27. 27. Andy Young // @andyy // andy@500.co How’re we doing? Put in a spreadsheet - key KPI at the top, nuance and drivers below, finally the detailed funnel below for reference - columns for weekly numbers, w/w growth
  28. 28. Andy Young // @andyy // andy@500.co How’re we doing? Put in a spreadsheet - review weekly - share with whole team - set targets - use as a model to predict and prioritize
  29. 29. Andy Young // @andyy // andy@500.co Weekly/Monthly reporting % week-on-week or month-on-month growth in your One Metric That Matters Focus. Set a target. How to choose? Read this Lean Analytics post
  30. 30. Andy Young // @andyy // andy@500.co Other key metrics CAC, LTV, churn
  31. 31. Andy Young // @andyy // andy@500.co Other key metrics Customer Acquisition Cost (CAC) how much you spend (on average) to acquire a customer Lifetime Value (LTV) How much revenue $$ an average customer brings you in all time
  32. 32. Andy Young // @andyy // andy@500.co If your LTV is greater than your CAC then you’re in business
  33. 33. Andy Young // @andyy // andy@500.co If your LTV is greater than 3x your CAC then you’re in a good business
  34. 34. Andy Young // @andyy // andy@500.co CAC & LTV: nuances Payback period: time to recoup CAC Magnitude of your numbers e.g. enterprise vs. social
  35. 35. Andy Young // @andyy // andy@500.co Calculating CAC Simple approach: total spend / total signups “50% of the money I spend on advertising is wasted - the problem is I don't know which half” - John Wanamaker Eventual goal: calculate CAC per channel
  36. 36. Andy Young // @andyy // andy@500.co Calculating LTV Problem! You don’t have a lifetime of data Measured LTV vs. estimated LTV Measure actual LTV per cohort Extrapolate revenue curve over time
  37. 37. Andy Young // @andyy // andy@500.co Calculating LTV Know your definitions! MRR?! GMV?! A16Z blog posts: 16 Startup Metrics & 16 MOAR Startup Metrics
  38. 38. Andy Young // @andyy // andy@500.co Analysing your data
  39. 39. Andy Young // @andyy // andy@500.co
  40. 40. Andy Young // @andyy // andy@500.co
  41. 41. Andy Young // @andyy // andy@500.co
  42. 42. Andy Young // @andyy // andy@500.co How not to do Metrics Outdated information Just 1 view of your data Manual calculations Bad metrics lead you astray
  43. 43. Andy Young // @andyy // andy@500.co Growth Accounting wha..?
  44. 44. Andy Young // @andyy // andy@500.co Growth Accounting
  45. 45. Andy Young // @andyy // andy@500.co Growth Accounting
  46. 46. Andy Young // @andyy // andy@500.co Cohort analysis?
  47. 47. Andy Young // @andyy // andy@500.co
  48. 48. Andy Young // @andyy // andy@500.co
  49. 49. Andy Young // @andyy // andy@500.co Analytics = Knowledge
  50. 50. Andy Young // @andyy // andy@500.co Knowledge = power confidence sanity
  51. 51. Andy Young // @andyy // andy@500.co Good luck!
  52. 52. Andy Young // @andyy // andy@500.co ● A16Z: 16 Startup Metrics - and 16 MOAR ● Lean Analytics Book - Choosing your OMTM ● Josh Elman - The only metric that matters ● Dave McClure's Startup Metrics for Pirates ● Eric Ries’s Three Engines of Growth ● Mark Suster - Why misunderstanding startup metrics can cost you your business ● Intercom - SaaS metrics for fundraising ● Social Capital - Accounting for User Growth ● Sarah Tavel: Engagement Hierarchy-Core Actions Further references..

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