Session on Metrics delivered to Wayra (early stage) Startups on Bootcamps celebrated in Madrid and Barcelona on March - April 2013. @marcoseguillor www.marcoseguillor.com

1. Startup Metrics
Wayra BCN & MAD
Bootcamp, March – April 2013
April 2013
Marcos Eguillor
@marcoseguillor
www.marcoseguillor.com

2. @marcoseguillor
www.marcoseguillor.com
Startup Metrics
20130112 @marcoseguillor

3. Objectives of the session
• Apprehend the Metrics of a Startup: Why, what, how
• Relate Startup Business Model and Value Proposal to
Phasing of a project and Metrics
• Assess Customer Lifecycle in term of Metrics
• Identify and Funnel Metrics for your Business
• Prepare Metrics for pitching
Wayra Startup Metrics >3
Bootcamp @marcoseguillor

4. WHY Startup Metrics
@marcoseguillor

5. your Value Proposal
is how you get
attention
Startup Metrics
@marcoseguillor

6. your Business Model
is how you get
interest
Startup Metrics
@marcoseguillor

7. yourplan
is how you get
analyzed
Startup Metrics
@marcoseguillor

8. yourteam
is how you get
credibility
Startup Metrics
@marcoseguillor

9. yourMVP
is how you get
engagement and
validation
Startup Metrics
@marcoseguillor

10. yourMetrics
is how you get the
deal
Startup Metrics
@marcoseguillor

11. need any more reasons?
Startup Metrics
@marcoseguillor

12. need any more reasons?
For the Founding Team
1.
• Focus on your design/execution
• Be coherent
• Iterate/pivot based on findings,
not just gut feeling
Startup Metrics
@marcoseguillor

13. need any more reasons?
For your Team
2.
• Have a (clear and profitable)
goal
Startup Metrics
@marcoseguillor

14. need any more reasons?
For your Investors
3.
• Assess whether know what
you’re doing
• Know more about the business
• Reduce uncertainty
• Evaluate the opportunity
(current and future)
Startup Metrics
@marcoseguillor

15. need any more reasons?
#FUD
… Fight
Fear
Uncertainty
Doubt
Startup Metrics
@marcoseguillor

16. WHAT
Startup Metrics
@marcoseguillor

17. Financial Metrics
Operational Metrics
Startup Metrics
@marcoseguillor

18. Financial Metrics
cash flow – ROI – NPV – WACC
– 5 year projections
…
blah blah blah*
Startup Metrics
* When speaking about Startups in their first heart-beats @marcoseguillor

19. Financial Metrics
Startup Metrics
http://i190.photobucket.com/albums/z57/lighthouse_emporium/no-bullshit.jpg @marcoseguillor

20. Financial Metrics
Revenue rate
vs.
Burn rate
(i.e. When would you run out of cash)
Startup Metrics
@marcoseguillor

21. Financial Metrics
Operational Metrics
Startup Metrics
@marcoseguillor

22. total subscribers – unique monthly users –
pages viewed – CPx
…
blah blah blah
Operational Metrics
Startup Metrics
@marcoseguillor

23. but, are they really relevant to your
business?
Operational Metrics
Startup Metrics
@marcoseguillor

24. Operational Metrics
What is your business about?
What is your Value Proposition?
What is it that perfectly and accurately defines the
core of your business?
Startup Metrics
http://farm8.staticflickr.com/7012/6667395893_4ee82710e1.jpg @marcoseguillor

25. Operational Metrics
What is a key driver to the business and needs to happen in
order to succeed with it?
Startup Metrics
http://www.coachfederation.org/includes/media/images/Business-Model-Canvas.jpg @marcoseguillor

26. Operational Metrics
Metrics
=
f(type, stage)business
• Proto – MVP
• B2B, B2C, B2B2C
• Comercially available
• Retail, Banking, Internet,
(with REVENUE)
Media Biotech, etc.
• Expansion, etc.
Startup Metrics
@marcoseguillor

27. Operational Metrics
a Good Metric is
?
What is a good Metric? Startup Metrics
@marcoseguillor

28. Operational Metrics
a Good Metric is
relevant
Tells you something KEY about YOUR biz at THIS moment.
It’s an add-on for your Tweet-Pitch Startup Metrics
@marcoseguillor

29. Operational Metrics
a Good Metric is
actionable
It allows you to decide, take actions, move forward.
It ties to specific and repeatable actions Startup Metrics
@marcoseguillor

30. Operational Metrics
a Good Metric is
x/y
A ratio. Truth is relative. Make you Metric relative Startup Metrics
@marcoseguillor

31. Operational Metrics
a Good Metric is
a<>b
Something comparable; now vs. then, here vs. there,
this vs. that, they vs. us Startup Metrics
@marcoseguillor

32. Operational Metrics
a Good Metric is
• Listen to the outside
• Be humble
• Learn from others
a<>b
Something comparable; now vs. then, here vs. there,
this vs. that, they vs. us Startup Metrics
@marcoseguillor

33. Operational Metrics
a Good Metric is
KISS
SIMPLEdefine, simplemeasure, simpletrack, simpleact-upon,
simplecommunicate, simpleunderstand Startup Metrics
@marcoseguillor

34. Operational Metrics
a Good Metric is
today tomorrow
¤ ¤
Something that moves you forward, helping
accurately predict and get your goal Startup Metrics
@marcoseguillor

35. Operational Metrics
a Good Metric is
change
xperiment
The one that helps you test and evolve Startup Metrics
@marcoseguillor

36. Operational Metrics
a Good Bad Metric is
?
What is a bad Metric? Startup Metrics
@marcoseguillor

37. Operational Metrics
a Good Bad Metric is
vanity
How’s your ego doing? Startup Metrics
@marcoseguillor

38. white noise
Startup Metrics
http://www.coins-bloc.com/wordpress/wp-content/uploads/2011/07/white-noise2.jpg @marcoseguillor

39. too many (variables) Metrics
INFORMATION ≠ DATA
Startup Metrics
http://upload.wikimedia.org/wikipedia/commons/d/d3/White.noise.png @marcoseguillor

40. TOMTMN
The One Metric That Matters Now
Startup Metrics
@marcoseguillor

41. Startup Metrics
http://www.salient.com.au/images/XR-Series/Days%20To%20Go.jpg @marcoseguillor

42. TOMTMN
The One Metric That Matters Now
• It changes throughout the time
• Answers the most important question
• No more noise. No more paralysis by
analysis
• It helps the whole Team focusing
• Encourages experimentation
Startup Metrics
@marcoseguillor

43. HOW Startup Metrics
@marcoseguillor

44. Don’t cry (yet),
it’s not that difficult!
Startup Metrics
http://howtowasteyourtime.files.wordpress.com/2012/02/643792388-1.jpeg @marcoseguillor

45. Where do you want to go?
Draw a map for the journey!
B
A
Startup Metrics
http://andrewskurka.com/wp-content/uploads/map-and-compass.jpg @marcoseguillor

46. What
happens
when you
push one
of the
buttons?
Startup Metrics
http://www.freakarq.es/wp-content/Metropolis-05.jpg
@marcoseguillor

47. As projects evolve and pass through different
phases, Metrics should change according to the
goals and conditions of each phase
Startup Metrics
@marcoseguillor

48. Typical conversion funnel
But it depends on the business!
Startup Metrics
http://www.slideshare.net/njvitto/lean-startup-metrics-analytics @marcoseguillor

49. Startup Metrics Framework - AARRR
Dave McClure Startup Metrics for Pirates
Acquisition
Activation
Retention
Referral
Revenue
Startup Metrics
http://cannons.com/wp-content/uploads/2012/09/Talk-Like-a-Pirate-Day-at-Cannons-Marina.jpg @marcoseguillor

50. Startup Metric for Pirates - AARRR
Acquisition
How do you get Users? At what rate? What is the
Bounce rate?
What is the cost of acquiring these users?
Customer Acquisition Cost
vs.
Customer Lifetime Value*
* Total revenue a customer has provided while being a customer; i.e. Total number of Months x Revenue/Month, Startup Metrics
where Month can be substituted by Year, Day, Hour, etc @marcoseguillor

51. Startup Metric for Pirates - AARRR
Activation
Do Users go beyond just asking for information,
sharing personal/professional details, signing up the
service or newsletter or following in the Social
Media?
Active Users or Subscribers
vs.
Registered Users
Startup Metrics
@marcoseguillor

52. Startup Metric for Pirates - AARRR
Do Users come back?
Retention
• Found what they were looking for? Met
expectations?
• Cohort analysis
• Churn rate
Startup Metrics
@marcoseguillor

53. Startup Metric for Pirates - AARRR
New Members vs. Existing
Members
Do Users tell others?
• Viral Coefficient
Referral
• Viral Cycle Time
• Net Promoter Score
Startup Metrics
http://technori.com/wp-content/uploads/NPS-en.jpg @marcoseguillor

54. Startup Metric for Pirates - AARRR
How do you make money?
• Related to Cost
• Lifetime Value; one shot vs. multi-shot
• Cancellation rate
Revenue
Startup Metrics
@marcoseguillor

55. Startup Metrics
http://farm2.staticflickr.com/1337/577630651_00f0ccdf87_o.jpg
@marcoseguillor

56. Startup Metrics Framework - AARRR
Example: OneProfile
Tweetpitch:
Bio, CV and Certifications personal repository for quick
automated sign-up to Social Media and services. Avoid
retyping
Business Model:
Makes money through profile completion signup success
to service providers. Per certificate to issuers
(professional, educational) + sales/ad channel
Startup Metrics
@marcoseguillor

57. Startup Metrics Framework - AARRR
Example*: OneProfile
Acquisition Visits Sign-up per visit
Activation Profiles/Certificates per User
Retention Rules per User Profile update per month
Referral Requests to Certificate Issuers per User Invites per User
Requests to Service Providers per User
Revenue Profiles exported per User Profile updates per Serv. Prov.
Outbound Sales per Serv. Provider Certif. linked per User
Startup Metrics
* Not necessarily right; objective is to foster debate @marcoseguillor

58. Startup Metrics Framework - AARRR
Example:
Acquisition
Activation
Retention
Referral
Revenue
Startup Metrics
@marcoseguillor

59. HOW
Startup Metrics
http://www.teatroguiniguada.es/images/background_cortina.jpg @marcoseguillor

60. How to present figures (if not graphic)
*
* TSM Average: Trailing Six Month Compound Growth Rate; (ending_value/starting_value)^(1/num_periods-1)-1 Startup Metrics
http://tomtunguz.com/your-startups-10-most-important-metrics @marcoseguillor

61. TOMTMN
The One Metric That Matters Now
(at least, keep the focus)
Startup Metrics
@marcoseguillor

62. When seeking investment and
pitching, objectives of Metrics are
showing:
• there is a business opportunity
• how (well) you’re doing things and
getting (positive) results
• you know how to exploit the market
opportunity, by proper execution
• your business is scalable
> 62
Startup Metrics
@marcoseguillor

63. Do you have a solid Value NO Where the hell are you going!? Keep on
Proposal and Business
working!
Model?
YES
Stop looking for investment; just
bootstrap* and keep on working
*Unless your product/service needs hundreds of thousands or millions to be built
and there’s no way to test it against your market before moving forward
Do you have a MVP; i.e. Have you NO
tested the product/service against Customer Acquisition Cost vs. Customer Lifetime Value
the market? Customer Acquisition rate
Active vs. Acquired Subscribers (Conversion)
YES # Subscribers
Bounce rate
Burn rate
…
Do you have a relevant income Metrics now depend (more) on your
already? business…
Startup Metrics
@marcoseguillor

64. Examples of some Metrics related to GROWTH
Tomasz Tunguz - Your Startup’s 10 Most Important Metrics
• New users added last month by channel/TSM
growth rate: How well are we growing the user
base? Which user sources are the best?
• Total user base/TSM growth rate: How important
is our monthly growth compared to our total user
base?
• Cost of customer acquisition, lifetime value,
pay back period: Can we grow faster through
paid acquisition? Are we acquiring customers
profitably? How much can we afford to spend on
new customers? How is this changing over time?
Wayra Startup Metrics
Bootcamp @marcoseguillor

65. Examples of some Metrics related to
ENGAGEMENT
Tomasz Tunguz - Your Startup’s 10 Most Important Metrics
• Active users (can defined in several
different ways depending on your
product) by channel/TSM growth rate: Are
we getting better at giving our customers
what they want/need? Which channels of
users are most effective in finding us the right
kind of user?
• % of users using top 3 key features in a
given month: Are our product initiatives the
right ones?
Wayra Startup Metrics
Bootcamp @marcoseguillor

66. Examples of some Metrics related to REVENUE
Tomasz Tunguz - Your Startup’s 10 Most Important Metrics
• Revenue / TSM Revenue growth: Are we growing
our revenue?
• Conversion to paid rate in that month/by
cohort: How many users converted to paid? Are we
improving our ability to convert customers to paid?
• Avg spend per paying customer of a managed
account vs solo account: What is the impact of the
account management team?
• Churn rate/ TSM Churn rate: How well do we
retain our customers?
• Burn rate: When are we profitable? When do we run
out of cash? When do we need to raise?
Wayra Startup Metrics
Bootcamp @marcoseguillor

67. remember Startup Metrics
@marcoseguillor

68. • It’s about doing it BETTER. So that you need to
take DECISIONS, for which you NEED
INFORMATION (not just data) extracted from
MEASUREMENT
• RELEVANCY. For this Value Proposal and
Business Model, for this Product/Market, from here
to there, at this moment, with the surrounding
conditions
• Substantial IMPROVEMENT
• FOCUS. It’s not about you, it’s about the GOAL, the
TEAM and the INVESTOR
• KISS; Automate. Dashboard vs. TOMTMN
• KEEP DOING
• EVOLVE
Startup Metrics
@marcoseguillor

69. Well-dones, buhs and takeaways
1.- 1.- 1.-
2.- 2.- 2.-
3.- 3.- 3.-
http://www.agm.cl/userFiles/fotos/articulos/inline/carro%20europeo.jpg
http://upload.wikimedia.org/wikipedia/commons/1/13/Facebook_like_thumb.png
Wayra Startup Metrics > 69
Bootcamp @marcoseguillor

70. If it can be measure, it can be analyzed, then managed and
improved
Various sources
Startup Metrics
Wayra BCN & MAD
Bootcamp, March – April 2013
March 2013
Marcos Eguillor
@marcoseguillor
www.marcoseguillor.com

71. References and material
• Dropbox. Startup Lessons Learned. Drew Houston, 2011.
http://www.slideshare.net/gueste94e4c/dropbox-startup-lessons-learned-3836587
• Guy Kawasaki on startup Metrics, mistakes, and enchantment. Paul Hontz, 2011.
http://thestartupfoundry.com/2011/04/29/guy-kawasaki-on-startup-Metrics-mistakes-and-
enchantment/
• How Startups Can Use Metrics to Drive Success. Mark Suster, 2011.
http://www.bothsidesofthetable.com/2011/04/04/how-startups-can-use-Metrics-to-drive-
success/
• How to Use a Single Metric to Run Your Startup. Ben Yoskovitz, 2012.
http://blog.kissMetrics.com/single-startup-Metric/
• Lean Startup Metrics. @stueccles, 2012,
http://www.slideshare.net/stueccles/lean-startup-metrics
• Lean Startup Metrics & Analytics. Nicola Junior Vitto, 2012.
http://www.slideshare.net/njvitto/lean-startup-metrics-analytics
• Startup Metrics 4 Pirates. Dave McClure, 2012.
http://www.slideshare.net/dmc500hats/startup-metrics-for-pirates-nov-2012
• Startup Metrics in plain english. Raymond, 2012.
http://flowventures.com/startup-Metrics-in-plain-english/
• Your Startup’s 10 Most Important Metrics. Tomasz Tunguz, 2013.
http://tomtunguz.com/your-startups-10-most-important-metrics
Wayra Startup Metrics > 71
Bootcamp @marcoseguillor