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Startup Metrics 4 Pirates (DogPatch Labs, Boston, March 2010)

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Dave McClure
Dave McClure

Startup Metrics 4 Pirates, latest & greatest (DogPatch Labs, Boston, March 2010) #aarrr

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Startup Metrics for Pirates: AARRR! Dogpatch Labs Boston, March 2010 Dave McClure @DaveMcClure 500 Hats / Founders Fund http://www.500hats.com http://500hats.typepad.com http://slideshare.net/dmc500hats HashTags: #DPL #aarrr
Why am I Here?!? (hint: it ain’t the Weather , bitches…) ,[object Object],[object Object],[object Object],[object Object],YOUR SILLY FRIGGIN HOPES & DREAMS, ABOUT TO BE CRUSHED THE REALITY : U SUCK , YOUR PRODUCT SUCKS , & U WILL FAIL … HARD.
Startup Challenges ,[object Object],[object Object],[object Object],[object Object]
3 Core Models: biz model, conversion dashboard, mktg channels ,[object Object],[object Object],[object Object],[object Object]
[Pardon The Blatant Commercial]
Dave McClure ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],GEEK, CODER, ENTREPRENEUR Blogger, Startup Advisor Internet Marketing, Angel/VC Investor
Personal Investments (21 deals, 2004-2010, ~$20K avg) LinkDex oneforty Networked Blogs MyGengo Votizen
Professional Investments (43 deals, Dec 2008 – Mar 2010, ~$75K avg) fbFund Incubator 22 deals ($850K) ~$15-75K FF Angel LLC 21 deals ($2M) ~$50-250K
Web 2.0: Hell Yes , Good Times. ,[object Object],[object Object],[object Object],[object Object],[object Object],R.I.P. *BAD* TIMES
Be Bold. Be Humble. ,[object Object],[object Object],[object Object],[object Object],[object Object]
Just Gimme the GOOD Metrics. Users, Pages, Clicks, Emails, $$$...? ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],the good stuff.
Lean Startup Church of Metrics: Priests & Principles ,[object Object],[object Object],[object Object],[object Object],[object Object]
Minimize TOTAL time through the loop LEARN BUILD MEASURE IDEAS CODE DATA Source: Eric Ries Startup Lessons Learned
The Startup Pyramid (Sean Ellis, Startup-Marketing.com) [email_address] Blog: startup-marketing.com
Design, Optimize for Conversion
Optimize 4 Happiness (both User + Business) ,[object Object],[object Object],[object Object],[object Object],[object Object],$$$
Discover Meaning What Do Users Care About Enough to Fuck or Kill ? Kathy Sierra: “ Creating Passionate Users”
Discover Meaning Keywords, Images, Call-to-Action ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
The Faces, The MotherF ** king Faces … Or, a BIG -ass Butt[on]
KILL A FEATURE. Something Sucks . Find It. KILL It. ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Q: What’s My Business Model? ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Startup Metrics for Pirates ,[object Object],[object Object],[object Object],[object Object],[object Object],(note: If you’re in a hurry, Google “Startup Metrics” & watch 5m video) AARRR !
AARRR!: 5-Step Startup Metrics Model Website.com R evenue $$$ Biz Dev Ads, Lead Gen, Subscriptions, ECommerce A CQUISITION SEO SEM Apps & Widgets Affiliates Email PR Biz Dev Campaigns, Contests Direct, Tel, TV Social Networks Blogs Domains R etention Emails & Alerts System Events & Time-based Features Blogs, RSS, News Feeds
Startup Challenges ,[object Object],[object Object],[object Object],[object Object]
3 Core Models: biz model, conversion dashboard, mktg channels ,[object Object],[object Object],[object Object],[object Object]
Role: Founder/CEO ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
The 1-Page Business Model (Users + Conversions + Priorities) ,[object Object],[object Object],[object Object],[object Object],[object Object]
TeachStreet Metrics v1: Eye Chart Madness
TeachStreet 1-Page Business Model: Teachers & Students Teachers Students Activation ,[object Object],[object Object],[object Object],[object Object],Retention ,[object Object],[object Object],Referral ,[object Object],[object Object]
Role: Product / Engineering ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Example Conversion Dashboard (note: *not* actuals… your mileage may vary) Stage Conversion Status Conv. % Est. Value (*not* cost) Acquisition Visitors -> Site/Widget/Landing Page (2+ pages, 10+ sec, 1+ clicks = don’t abandon) 60% $.05 Activation “ Happy” 1 st Visit; Usage/Signup (clicks/time/pages, email/profile reg, feature usage) 15% $.25 Retention Users Come Back; Multiple Visits (1-3x visits/mo; email/feed open rate / CTR) 5% $1 Referral Users Refer Others (cust sat >=8; viral K factor > 1; ) 1% $5 Revenue Users Pay / Generate $$$ (first txn, break-even, target profitability) 2% $50
Role: Marketing / Sales ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Example Marketing Channels ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
M AARRR keting Plan ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
One Step at a Time. ,[object Object],[object Object],[object Object],“ You probably can’t save your Ass and your Face at the same time… choose carefully .” – DMC
Startup 2.0: “Lean Investor” Model ,[object Object],[object Object],[object Object],[object Object]
Investment #1: Incubate (“Product”) ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Investment #2: Seed (“Market”) ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Investment #3: Venture (“Revenue”) ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Links & Resources ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Appendix
Startup Metrics Activation
Website.com ,[object Object],[object Object],[object Object],[object Object],[object Object],do LOTS of landing page & A/B tests – make lots of dumb guesses & iterate FAST Activation SEO SEM Apps & Widgets Affiliates Email PR Biz Dev Campaigns, Contests Direct, Tel, TV Social Networks Blogs Domains
Activation What do users do on their first visit? ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Activation What do users do on their first visit? ,[object Object],[object Object],[object Object],[object Object]
Activation ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Startup Metrics Retention
Website.com ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Retention SEO SEM Apps & Widgets Affiliates Email PR Biz Dev Campaigns, Contests Direct, Tel, TV Social Networks Blogs Domains Emails & Alerts System Events & Time-based Features Blogs, RSS, News Feeds
[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Retention How do users come back? How often?
[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Retention How do users come back? How often?
Retention How do users come back? How often? ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Retention ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Startup Metrics Acquisition
Website.com ,[object Object],[object Object],[object Object],[object Object],Acquisition SEO SEM Apps & Widgets Affiliates Email PR Biz Dev Campaigns, Contests Direct, Tel, TV Social Networks Blogs Domains
Acquisition Where are users coming from? ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Acquisition Keyword Vocabulary ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Acquisition Where are users coming from? ,[object Object],[object Object],[object Object],[object Object],Example
Acquisition ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Startup Metrics Referral
Website.com Focus on driving referrals * after * users have a “ happy ” experience; avg score >= 8 out of 10 Referral Acquisition SEO SEM Apps & Widgets Affiliates Email PR Biz Dev Campaigns, Contests Direct, Tel, TV Social Networks Blogs Domains Retention Emails & Alerts System Events & Time-based Features Blogs, RSS, News Feeds
Referral How do users refer others? ,[object Object],[object Object],[object Object],[object Object],[object Object]
Referral Viral Growth Factor ,[object Object],[object Object],[object Object],[object Object],A viral growth factor > 1 means an exponential organic user acquisition.
Referral ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Startup Metrics Revenue
Website.com Revenue This is the part *you* still have to figure out… (we don’t know jack about your business) R evenue $$$ Biz Dev Ads, Lead Gen, Subscriptions, ECommerce Acquisition SEO SEM Apps & Widgets Affiliates Email PR Biz Dev Campaigns, Contests Direct, Tel, TV Social Networks Blogs Domains Retention Emails & Alerts System Events & Time-based Features Blogs, RSS, News Feeds
Revenue How do you make money? ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Revenue ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Types of Measurement ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

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Startup Metrics 4 Pirates (DogPatch Labs, Boston, March 2010)

  • 1. Startup Metrics for Pirates: AARRR! Dogpatch Labs Boston, March 2010 Dave McClure @DaveMcClure 500 Hats / Founders Fund http://www.500hats.com http://500hats.typepad.com http://slideshare.net/dmc500hats HashTags: #DPL #aarrr
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  • 5. [Pardon The Blatant Commercial]
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  • 7. Personal Investments (21 deals, 2004-2010, ~$20K avg) LinkDex oneforty Networked Blogs MyGengo Votizen
  • 8. Professional Investments (43 deals, Dec 2008 – Mar 2010, ~$75K avg) fbFund Incubator 22 deals ($850K) ~$15-75K FF Angel LLC 21 deals ($2M) ~$50-250K
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  • 13. Minimize TOTAL time through the loop LEARN BUILD MEASURE IDEAS CODE DATA Source: Eric Ries Startup Lessons Learned
  • 14. The Startup Pyramid (Sean Ellis, Startup-Marketing.com) [email_address] Blog: startup-marketing.com
  • 15. Design, Optimize for Conversion
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  • 17. Discover Meaning What Do Users Care About Enough to Fuck or Kill ? Kathy Sierra: “ Creating Passionate Users”
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  • 19. The Faces, The MotherF ** king Faces … Or, a BIG -ass Butt[on]
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  • 23. AARRR!: 5-Step Startup Metrics Model Website.com R evenue $$$ Biz Dev Ads, Lead Gen, Subscriptions, ECommerce A CQUISITION SEO SEM Apps & Widgets Affiliates Email PR Biz Dev Campaigns, Contests Direct, Tel, TV Social Networks Blogs Domains R etention Emails & Alerts System Events & Time-based Features Blogs, RSS, News Feeds
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  • 28. TeachStreet Metrics v1: Eye Chart Madness
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  • 31. Example Conversion Dashboard (note: *not* actuals… your mileage may vary) Stage Conversion Status Conv. % Est. Value (*not* cost) Acquisition Visitors -> Site/Widget/Landing Page (2+ pages, 10+ sec, 1+ clicks = don’t abandon) 60% $.05 Activation “ Happy” 1 st Visit; Usage/Signup (clicks/time/pages, email/profile reg, feature usage) 15% $.25 Retention Users Come Back; Multiple Visits (1-3x visits/mo; email/feed open rate / CTR) 5% $1 Referral Users Refer Others (cust sat >=8; viral K factor > 1; ) 1% $5 Revenue Users Pay / Generate $$$ (first txn, break-even, target profitability) 2% $50
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  • 60. Website.com Focus on driving referrals * after * users have a “ happy ” experience; avg score >= 8 out of 10 Referral Acquisition SEO SEM Apps & Widgets Affiliates Email PR Biz Dev Campaigns, Contests Direct, Tel, TV Social Networks Blogs Domains Retention Emails & Alerts System Events & Time-based Features Blogs, RSS, News Feeds
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  • 65. Website.com Revenue This is the part *you* still have to figure out… (we don’t know jack about your business) R evenue $$$ Biz Dev Ads, Lead Gen, Subscriptions, ECommerce Acquisition SEO SEM Apps & Widgets Affiliates Email PR Biz Dev Campaigns, Contests Direct, Tel, TV Social Networks Blogs Domains Retention Emails & Alerts System Events & Time-based Features Blogs, RSS, News Feeds
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Editor's Notes

  1. I know, too many bullets…
  2. BUILT TO LEARN This is the core feedback loop that powers startups. Their goal is not to optimize the time it takes to do any one of these steps. There are many specific practices that can power lean startups, and we’ll cover a few in this presentation. But more important than any specific practice is this core idea: startups should be built to learn.
  3. If you don’t remember anything else, perhaps this graphic & the next 2-3 might be useful.
  4. Qualitative: SurveyMonkey (surveys), CrazyEgg (heatmap), TechSmith Morae / UserVue (ux recording), RobotReplay, TapeFailure. Quantitative: Google Analytics (free), MyBlogLog, ClickTracks, Index Tools, Visual Sciences / Webside Story, Omniture, WebTrends, etc. Comparative: Google Website Optimizer, SiteSpect, Optimost, Offermatica, Vertster, Kefta. Competitive: Quantcast, Compete.com, Alexa, Hitwise, Comscore, Nielsens. see more info at: http://webanalyticsassociation.com/ (WAA) http://kaushik.net/ (Avinash Kaushik) http://grokdotcom.com/ (Eisenbergs) http://www.emetrics.org/ (Jim Sterne)