Just Gimme the GOOD Metrics.
Users, Pages, Clicks, Emails, $$$...? Q: Which of these is best? How do you know? • 1,000,000 one-time, unregistered unique visitors • 500,000 visitors who view 2+ pages / stay 10+ sec • 200,000 visitors who clicked on a link or button • 20,000 registered users w/ email address • 2,000 passionate fans who refer 5+ users / mo. • 1,000 monthly subscribers @ $5/mo the good stuff.
Lean Startup -> Startup Metrics
• Talk to Customers; Discover Problems • Progress ≠ Features (Less = More) • Fast, Frequent Iteration (+ Feedback Loop) • Focus on Product/Market Fit • Measure Conversion (compare 2+ alternatives) • Track Metrics that are Simple & Actionable
AARRR!: Startup Metrics Model Website.com
Revenue $$$ Biz DevAds, 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
Startup Metrics for Pirates •
Acquisition: users come to site from various channels • Activation: users enjoy 1st visit: "happy” experience • Retention: users come back, visit site multiple times • Referral: users like product enough to refer others • Revenue: users conduct some monetization behavior AARRR! (note: If you’re in a hurry, Google “Startup Metrics” & watch 5m video)
One Step at a Time.
1. Make a Good Product: Activation & Retention 2. Market the Product: Acquisition & Referral 3. Make Money: Revenue & Profitability
Role: Founder / CEO Q:
Which Customers? Problems? Metrics? A: Focus on Critical Few Actionable Metrics (if you don’t use the metric to make a decision, it’s not actionable) • Hypothesize Customer Lifecycle • Target ~3-5 Conversion Events • Test, Measure, Iterate to Improve
Optimize 4 Happiness (both
User + Business) • Define States of User + Business Value • Prioritize (Estimate) Relative Value of Each State • Move Users: Lower Value -> Higher Value • Optimize for User Happiness + Business $$$ • Achieve High Cust Value + Low ACQ$ @ Scale
What is Minimum Viable Product
? MVP = F(Customer, Problem, Time or $$$) • Focus on CUSTOMER – Qualitative Discovery, Quantitative Validation • Get to know habits, problems, desires (FUN MATTERS) – what causes pain? what causes pleasure? • Ship the simplest, fastest solution that solves the problem; better or cheaper or faster than the available competition. • Define 1-5 TESTABLE Conversion Metrics of Value – Attention/Usage (session time, clicks) – Customer Profle Data (email, connect, profile) - Revenue (direct or indirect) - Retention (visits over time, cohort behavior) - Referral (users evangelize to other users)
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” 1st 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 $$$ (first txn, break-even, target profitability) 2% $50
Role: Product / Eng /
Design Q: What Features to Build? Why? When are you “Done”? A: Easy-to-Find, Fun/Useful, Unique Features that Increase Conversion (stop iterating when increase decelerates) • Wireframes = Conversion Steps • Measure, A/B Test, Iterate FAST (daily/weekly) • Optimize for Conversion Improvement – 80% on existing feature optimization – 20% on new feature development
What is Product/Market Fit ?
PMF = F(Customer, Solution, Alternatives*) • Product / Market Fit occurs when: – Customers like your stuff better than other options – Not static, Not optimal – just Local Max F(customers, solution, time) – make sure you’re moving in optimal direction 2 local max • Q: what competitive solutions are available? – … that your customers know about? – how are you diff/same? – in ways that people care about? (will pay for)
Discover Meaning Keywords, Images, Call-to-Action
Top 10 - 100 words • Your Brand / Products • Customer Needs / Benefits • Competitor’s Brand / Products • Semantic Equivalents • Misspellings Relevant images • People • Products • Problems • Solutions Call-to-Action • Words • Images • Context • Button/Link • Emotion Result • Positive? • Negative? • Neutral (= Death) • A/B test & Iterate
How To Tell if Design/UX
is Good? AUX = F(Customer, Design/UX, Metrics) • If Users Use Your Product Then It’s GOOD. – Define Metrics, Measurability for Design / UX – Focus on Psychology of User – Relative to Competitive Alternatives (that your customers know about) – Keep Testing 4 Awesomeness • RAMP Mktg & $$$ AFTER it’s clear your MVP is: – Functional = useful for >1 customers – Awesome (enough, see above) – Differentiated = better than other stuff availabile
Choose #WINNING Metrics WIN =
F(Customer, Usage, Dist, Revenue) • after MVP functional use, several options: – better Usage – Activation & Retention (AUX) – more Users -- Distribution / Acquisition – more Money --- Monetization – more Profit — Margin • understand ACQ$ vs REV$, optimize 4 short-term – higher volume usually a priority – costs may change as volume increases
Startup 2.0: “Lean Investor”
Model Method: Invest in startups using incremental investment, iterative development. Start with lots of small experiments, filter out failure, and expand investment upon success. • Incubator: $0-100K (“Product Viability”) • Seed: $100K-$2M (“Expand Distribution”) • Venture: $1M-$10M (“Maximize Revenue”)