Startup Metrics 4 Pirates Lean Startup Camp Montreal – July 2011 #AARRR #LeanStartup #StartupFest Dave McClure @DaveMcClure http://www.500startups.com http://500hats.typepad.com http://slideshare.net/dmc500hats AARRR !

500 Startups Seed Fund & Accelerator (150+ investments @ ~$50K avg)

[ This Talk ]

[ Interesting Stuff ]

Read Geoffrey Miller Sex + Evolution + Consumer Mktg = Awesome Sauce

More Great Stuff. Psychology + Comics

[The Lean Startup]

Discover Customers (Steve Blank, SteveBlank.com)

Iterate , Dammit. (Eric Ries, StartupLessonsLearned.com) LEARN BUILD MEASURE IDEAS CODE DATA

Product/Market Fit b4 “Launch” (Sean Ellis, Startup-Marketing.com) Startup-Marketing.com

[Startup Metrics 4 Pirates ]

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

[ Constructing MVP ]

Example Conversion Metrics (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

[ Getting 2 PMF ]

Better or Different . Funny! Shocking !!! Accepted Not Funny.

[ Testing 4 AUX ]

Discover Meaning Why Should Users CARE About Your Product? Kathy Sierra: “ Creating Passionate Users”

How 2 Tell if Design is Good?

[ Metrics 4 ACQ ]

[ What is WINNING? ]

# TigerBlood 4 Startups # WINNING

[ The Lean Investor ]

Appendix

Startup Metrics Activation

Startup Metrics Retention

Startup Metrics Acquisition

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

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

500 Hats Investments (13+ deals, 2004-2008, ~$310K) Results: 1 exit @ $170M (9x) , +3-6 future wins (i hope ;) 2 exits @ $50M, $70M (advisory roles) (acq YHOO) (acq GOOG) (acq INTU)

Founders Fund Investments (43 deals, 2009, ~2.9M) Results : 8 raised seed rd $500K+ 1 raised $4M; 3 early exits Results : 6 raised next rd $2M+ 1 raised $12M; 1 early exit fbFund REV (Facebook Incubator) 22 deals ($850K total) ~$40K avg FF Angel LLC 21 deals ($2M total) ~$100K avg

[ Don’t Pitch Me, Bro. ] Seriously : Don’t. Fucking . Pitch Me. (and don’t email me either, cuz i won’t read it)