Startup Metrics + Case studies 11-16-2015

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Metrics

Metrics for pirates…
AARRR!

MAARRRketing for
startups

ACQUISITION
Users come to the site; you
have their attention

ACTIVATION
User performs some key activity that
indicates a good first visit

RETENTION
User continues to do that key activity
indicating they like your product

REFERRAL
User gets other users to join

REVENUE
User pays you

AARRR Funnel: Customer Lifecycle / Conversion Behavior
@polvallssoler

Emails
&

Alerts

Blogs,
Content

System
Events
&
Time-‐
based
Features

Biz
Dev

Ads,
Lead
Gen,

SubscripBons,
etc

Emails
&

widgets

Campaigns,

Contests

Homepage
/
Landing

Page

Product

Features

SEO
SEM

Apps
&

Widgets

Aﬃliates

Email

PR

Biz
Dev

Campaigns,

Contests

Direct,
Tel,

TV

Social

Networks

Blogs

Domains

@polvallssoler

BLOG EXAMPLE
Acquisition -‐ users come to the site from a search engine
Activation -‐ user signs up for RSS/newsletter or stays for at least 5 minutes
Retention -‐ user reads at least one post a week or opens the newsletter
Referral -‐ user promotes your blogs contests and drives traffic
Revenue -‐ user buys your ebook

SAAS EXAMPLE
Acquisition – user comes to our landing from a FB ad
Activation -‐ user successfully makes a document
Retention -‐ user continues to make documents. As long as they're
successfully making documents they will continue to use the service.
Referral – Users send other users to our web, possibly with a coupon code
Revenue -‐ yay! money!
(﴾Web-‐based app to convert HTML to PDF or Excel documents)﴿

MOBILE EXAMPLE
(﴾Smartphone videogame)﴿
Acquisition
Activation
Retention
Revenue
Referral
Social Share
10%

AND…

if CLV > CAC, then PROFIT

Emails
&

Alerts

Blogs,
Content

System
Events
&
Time-‐
based
Features

Biz
Dev

Ads,
Lead
Gen,

SubscripBons,
etc

Emails
&

widgets

Campaigns,

Contests

Homepage
/
Landing

Page

Product

Features

SEO
SEM

Apps
&

Widgets

Aﬃliates

Email

PR

Biz
Dev
Campaigns,

Contests

Direct,
Tel,

TV

Social

Networks

Blogs

Domains

@polvallssoler!

AARRRP!

Example Conversion Metrics
(note: your mileage may vary…)
Category User Status Conv % Est. Value
Acquisition Visit Site
(or landing page, or external widget)
100% $.01
Acquisition Doesn't Abandon
(views 2+ pages, stays 10+ sec, 2+ clicks)
70% $.05
Activation Happy 1st Visit
(views X pages, stays Y sec, Z clicks)
30% $.25
Activation Email/Blog/RSS/Widget Signup
(anything that could lead to repeat visit)
5% $1
Activation Acct Signup
(includes profile data)
2% $3
Retention Email Open / RSS view -> Clickthru 3% $2
Retention Repeat Visitor
(3+ visits in first 30 days)
2% $5
Referral Refer 1+ users who visit site 2% $3
Referral Refer 1+ users who activate 1% $10
Revenue User generates minimum revenue 2% $5
Revenue User generates break-even revenue 1% $25

KEY METRICS TO TRACK
@polvallssoler

ACQUISITION
Key Metrics To Track:
• Volume(﴾#)﴿
• Cost (﴾$)﴿
• Conversion (﴾%)﴿

Acquisition tips (﴾for the top 10 -‐ 100 words)﴿
• Your brand / Products
• Customer needs / Benefits
• Competitor’s brand / Products (﴾Steal traffic)﴿
• Semantic equivalents
• Misspellings

ACQUISITION

ACQUISITION
Extra tip: Reverse Engineered App Store’s ranking algorithm
(﴾approximation)﴿
AppStore Ranking = H + D + R + E + S

H = # of installs weighted for the past few hours

D = # of installs weighted for the past few days

R = Reviews (﴾star rating + number of reviews)﴿

E = Engagement (﴾# of times app opened etc.)﴿

S = Sales (﴾$)﴿

Extra tip: Reverse Engineered App Store’s ranking algorithm
(﴾approximation)﴿





S = Sales (﴾$)﴿

Luck? AppStore Bot? Dark pattern?
ACQUISITION

ACQUISITION
Extra tip: How to get your first 100 users
1)﴿ What existing solution do you believe your product is better than?
2)﴿ Where can you find a critical mass of people who use the existing solution?
3)﴿ Go there. Talk to them. Show them your product.

ACTIVATION
Key metrics to track:
• Pages per visit (﴾2-‐3+ page views)﴿
• Time on site (﴾10-‐30+ seconds)﴿
• Conversions (﴾1 key feature usage)﴿
• Clicks (﴾3-‐5+ clicks)﴿
• Bounce rate (﴾low)﴿
Activation Tips:
• Less is more
• Focus on UX / Usability
• Provide incentives & call to actions
• Perform A/B tests and iterate fast

ACTIVATION
@polvallssoler

ACTIVATION

RETENTION
• Source (﴾email, RSS, affiliates…)﴿
• Volume (﴾Low spam rating)﴿
• Conversions (﴾20% open rate / CTR)﴿
• Visitor Loyalty (﴾1–3+ visits per month)﴿
• Session Length
• Long customer life cycle / Low decay
• Identify fanatics and cheerleaders

RETENTION

RETENTION
Retention Tips:
• Email is simple and it works
• But make Unsubscribe easy
• 80% subject line / 20% body text
• Actually… 99% subject line / 1% body text
• Status / “best of” weekly/monthly emails
• “Something happened” emails
• Lifecycle emails @ +3, +7, +30 days
• RSS / News feeds
• Widgets / Embeds
• Gamification
• Fanatics = Virality + affiliate channels (﴾like bloggers)﴿

Hooked Canvas by Nir Eyal
RETENTION -‐ THE HOOK

REFERRAL
Viral Growth Factor = X * Y * Z

X = % of users who invite other people

Y = average # of people that they invited

Z = % of users who accepted an invitation
A viral growth factor > 1 means an exponential organic user acquisition.

REFERRAL

REFERRAL
Referral Tips:
• Personal send to friend (﴾Email / IM)﴿
• Social Media
• Widgets / Embeds
• Affiliates
@polvallssoler

RETENTION + REFERRAL

RETENTION + REFERRAL
Compound interest applied
to user acquisition

REVENUE
• Conversion to revenue (﴾%)﴿
• Volume (﴾$$$)﴿
Revenue Tips:
• Don’t just rely on AdSense, iAd…
• Offer something free (﴾at least when starting out)﴿
• Subscription / Recurring transactions
• Qualify your customers / Traffic for lead generation.
• Sell somethig (﴾physical or virtual)﴿

REVENUE
@polvallssoler

PROFIT
…

linkedin.com/in/polvallssoler! @polvallssoler! slideshare.net/polvallssoler!@polvallssoler!

CAC (﴾Customer Acquisition Cost)﴿
Take only a portion of those salaries and expenses
in the early days to give a better indication of how
CAC will look when you are at scale.

CLV or LTV (﴾Customer Lifetime Value)﴿
if the Customer Churn rate is a monthly % or yearly %, then the
Customer Lifetime will be for the same time period.

CLV or LTV (﴾Customer Lifetime Value)﴿
In most SaaS businesses, the gross margin % is high (﴾above
80%)﴿, and it’s quite common to use the simpler version of
the formula that is not Gross Margin adjusted.
To truly get an accurate picture of LTV, you should
take into consideration Gross Margin:

a = initial ARPA per month (﴾ x GM %, if you prefer)﴿
m = monthly growth in ARPA per account
c = Customer Churn Rate (﴾in months)﴿
CLV or LTV in a More Complex Scenario
(﴾Where you expect ARPA to change over the lifespan
of the customer due to expansion revenue)﴿
(﴾This formula makes an assumption that revenue increases at a roughly
fixed rate every month for the entire lifetime of the customer)﴿

if
1
<
LTV/CAC
<
3

if
LTV/CAC
<
1

LTV : CAC Ratio Awesomeness
> 3if

(It’s
ok.
As
a
startup,
don’t
worry

iniBally
about
LTV>3*CAC)

your business model is broken!

Over time, all marketing strategies
result in shitty clickthrough rates

Growth Hacking

Less Budget, More Creativity, More Automation -‐> Maximize Output
Growth Hacking

Classic “scam-‐like” scheme
Step 1: Build a product.
Step 2: Release a product.
Step 3: Growth Hack your way to success.

System approach

•  No isolated micro metrics
•  Pair every metric with its appropriate counter
metric e.g
– signups with activations
– new paid customers with churn
– new paid customers with total revenue

System approach

•  Track what you can…
•  … But focus on few
•  Don’t try to blindly copy competition
•  Track time consuming processes (﴾cashflow,
client satisfaction…)﴿

System approach

•  Relate metrics in all levels:
– Financial
– Marketing
– Operations
– Capacity
↳ Financial projections & Strategic Map

Marketing
Operations
Capacity
Financial
Strategic Map

Acquisition
Revenue
Burn Rate
Costs
SEO Buzz
Activation
Usability Persuasion
Retention
Value
offering
Customer
Service
A/B Tests
Breadth of
product
offerings.
% of
deliveries
in 2 days
% issues
Technical
debt Implemented
user stories
% training plan
completed
% recruitment
plan completed

Tools for metrics analysis

Growth Hacking
Case Studies

Dropbox ACQUISTION

Signup driven homepage:
before
after

Dropbox REFERRAL

Sharing simplicity and availability on Multiple Devices & Platforms:

Dropbox REFERRAL & REVENUE

Get more space

Dropbox ACQUISTION & REFERRAL

Dropbox Great Space Race!

Dropbox REFERRAL & REVENUE

Dropbox growth hack in numbers…
1. September 2008: 100,000 registered users
2. January 2010 (﴾15 months later)﴿: 4,000,000
3. Mostly from word-‐of-‐mouth and viral:
• 35% of daily signups from referral program
• 20% from shared folders, other viral features
• Sustained 15-‐20%+ month-‐over-‐month growth since launch

Different landing pages according to traffic source
(﴾Search Engines for SEO –> Footer vs Direct
Traffic -‐> No footer)﴿
Groupon ACQUISITION
Caution! Use at your own risk! This is cloaking!

Groupon ACTIVATION & RETENTION

Groupon RETENTION

Groupon REFERRAL

Sharing is in Groupon’s DNA

Linkedin ACTIVATION

Gamification example:

Linkedin RETENTION & REFERRAL

Linkedin REVENUE

Linkedin ACQUISITION & REFERRAL

This person passed away about a year ago. For the
majority of her life, she ran a small hardware shop
and she barely understood email, let alone LinkedIn.
From Linkedin’s People You May Know page…
(﴾NOT THE BEST THING TO DO… people can hate you)﴿

REVENUE & PROFIT
@polvallssoler

REVENUE & PROFIT

REVENUE & PROFIT
Unlock all books is the clear top revenue generator.

Reverse Engineered App Store’s ranking algorithm (﴾approximation)﴿





S = Sales (﴾$)﴿

ACQUISITION

Reverse Engineered App Store’s ranking algorithm (﴾approximation)﴿





S = Sales (﴾$)﴿

Luck? AppStore Bot? Dark pattern?
ACQUISITION

ACQUISITION
hack

Caution! Use at your own risk! This is cloaking!
-‐>
-‐>

ACQUISITION
1-‐ Setup domain with a WordPress news theme.
2-‐ Hire writers to rewrite news articles for $2 each.
(﴾Avoid copying to ensure “journalistic quality”.)﴿
3-‐ Start with 150 back-‐dated articles to show that
the site has some momentum.
4-‐ Setup a nice logo and real phone number.
5-‐ Double check that the site complies with the
Google webmaster guidelines.
6-‐ Submit for approval.

•  Defining their market space and identifying user pain
•  Nailing the product experience by focusing on doing
a few things exceptionally well
•  Using a freemium model that fueled bottom-‐up word
of mouth growth
ACQUISITION & REFERRAL

ACQUISITION & REFERRAL!
!

ACQUISITION, REFERRAL & REVENUE

Panda
@polvallssoler

Panda victim

Pigeon

It doesn’t need to be online (﴾initially)﴿

@polvallssoler

-‐ 1 Private domain (﴾forwarded to affiliate link)﴿ -‐ made a very easy domain name -‐ $23
-‐ 1,000 copies (﴾cut into 4 = 4,000 flyers)﴿ -‐ $40
-‐ 2 custom tshirts -‐ $50
-‐ 2 promo girls (﴾$20/hr each x 4 hrs = 8 hours total)﴿ -‐ $160
-‐ 2 accounts on the hook up site (﴾trial)﴿ -‐ $10

Total Advertising Cost = $283
Hand out all 4,000 flyers + do some heavy flirting

-‐ 1 Private domain (﴾forwarded to affiliate link)﴿ -‐ made a very easy domain name -‐ $23
-‐ 1,000 copies (﴾cut into 4 = 4,000 flyers)﴿ -‐ $40
-‐ 2 custom tshirts -‐ $50
-‐ 2 promo girls (﴾$20/hr each x 4 hrs = 8 hours total)﴿ -‐ $160
-‐ 2 accounts on the hook up site (﴾trial)﴿ -‐ $10

Total Advertising Cost = $283
Hand out all 4,000 flyers + do some heavy flirting
Got 118 conversions (﴾2,95% conversion rate)﴿ -‐>
118 x $45 payout = $5,310 Revenue -‐ $283 cost

= $5,027 PROFIT!

It doesn’t need to be online

ACQUISTION,
ACTIVATION,
RETENTION
&
REFERRAL
ACQUISTION,
ACTIVATION
&
RETENTION

ACQUISITION: SEO hacks

From advertising here…

PS: I Love You. Get Your Free
Email at Hotmail
To simply writing this footer on each email…

And here are the results:

ACQUISITION & REFERRAL (﴾Through viral content)﴿

ACQUISITION & PROFIT
@polvallssoler

REFERRAL
@polvallssoler

REFERRAL -‐> Card design

REVENUE & PROFIT
The $144,146,165 Button
@polvallssoler

REVENUE & PROFIT
The $144,146,165 Button
When cabs were cash only, the average tip was roughly 10%. After the
introduction of this system, the tip percentage jumped to 22%. Those
three buttons resulted in $144,146,165 of additional tips per year.

When Growth
Hacking Goes
Fail Hacking

linkedin.com/in/polvallssoler! @polvallssoler! slideshare.net/polvallssoler!@polvallssoler

Path
Facebook blocked Path’s “Find Friends” access following spam controversy

Path
Path texts your entire phonebook

Glide
Same…

Tinder
Same…

Exploiting Tinder

Rap Genius: No SEO Genius

Rap Genius: No SEO Genius
Rap Genius fell from around 700,000 uniques a day to around 100,000.

Spontaneity

Planned spontaneity

Gracias!

Startup Metrics + Case studies 11-16-2015

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Startup Metrics + Case studies 11-16-2015