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The Metrics-Driven Startup
Which Metrics Matter and Why


Hiten Shah
Lean LA • September 21st, 2010
Ferrari F430 Spider
152 miles per hour
Most Startups Crash and Burn
Let’s talk about what else is easy.
Stop measuring what’s easy.
Start measuring what matters.
Failure attracted me to The Lean Startup
Vanity Metrics
Actionable Metrics
Are the metrics you are tracking
 helping you make decisions?
Example SaaS Web App

• People sign up and pay online
• They first sign up for a 7 day free trial
• Then they pay $97 per month
Example SaaS Web App

• People sign up and pay online
• They first sign up for a 7 day free trial
• Then they pay $97 per month



What are your assumptions?
Software as a Service Product
           (Assumptions)

Key Actions   % of people        # of people
 Visit Site     100%                1000

  Sign Up        10%                    100

  Activate        5%                    50

 Upgrade          1%                    10

 Revenue               $970 per month
Baseline these key actions and
        assumptions.
Software as a Service Product
         (Actual Baseline)

Key Actions   % of people      # of people
 Visit Site     100%              1000

  Sign Up        3.6%                 36

  Activate       1.2%                 12

 Upgrade         0.4%                 4

 Revenue             $388 per month
What would you try to improve?


Key Actions   % of people      # of people
 Visit Site     100%              1000

  Sign Up        3.6%                 36

  Activate       1.2%                 12

 Upgrade         0.4%                 4

 Revenue             $388 per month
Software as a Service Product
            (Video Test)

Key Actions    % of people         # of people
 Visit Site       100%                 1000

 Sign Up           6.5%                 65

  Activate         1.8%                 18

 Upgrade           0.3%                 3

 Revenue      $291 per month vs. $388 baseline :(
Get Inspired!
Software as a Service Product
           (Inspired Test)

Key Actions     % of people         # of people
 Visit Site        100%                1000

  Sign Up          7.7%                 77

  Activate         2.8%                 28

 Upgrade           1.2%                 12

 Revenue      $1164 per month vs. $388 baseline :)
Software as a Service Product
              (Compare all 3)

Key Actions   Baseline   Video Test   Inspired Test
 Visit Site    100%        100%          100%

  Sign Up      3.6%        6.5%          7.7%

  Activate     1.2%        1.8%          2.8%

 Upgrade       0.4%        0.3%          1.2%

 Revenue      $388 per   $291 per     $1164 per
               month      month        month
Crazy Egg Pricing Before
Crazy Egg Pricing After
Crazy Egg Pricing Results

• Before - 150 sign ups per day
• After - 15 sign ups per day
• But revenue doubled in the first month!
Start measuring what matters.
Questions?


Got questions? Want advice? Email Me!
      hiten@kissmetrics.com

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