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Become a Web 2.0 Jedi: How to Use the Force of Product & Marketing Metrics to Optimize Your Business Web 2.0 Expo Apr 3, 2009 #w2e   #metrics
Startup Metrics for Pirates: AARRR!  Web 2.0 Expo SF April 2009 Dave McClure, Founders Fund http://www.foundersfund.com/   http://500hats.typepad.com/ http://slideshare.net/dmc500hats/
Startup Metrics: The Basics ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Web 2.0: Hell  Yes , Good Times. ,[object Object],[object Object],[object Object],[object Object],[object Object]
The Startup Metrics Religion ,[object Object],[object Object],[object Object],[object Object],[object Object]
Optimize  4  Happiness  (both User + Business) ,[object Object],[object Object],[object Object],[object Object],[object Object],$$$
Discover Meaning Keywords, Images, Call-to-Action ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Startup Metrics for Pirates:  AARRR! ,[object Object],[object Object],[object Object],[object Object],[object Object],(note: If you’re in a hurry,  watch 5 min video after slide 23) AARRR !
AARRR!: 5-Step Startup Metrics Model Website.com R evenue $$$ 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
Q: What’s My Business Model? ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Just Gimme the GOOD Metrics. Users, Pages, Clicks, Emails, $$$...? ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],the  good  stuff.
3 Core Models: biz model, conversion dashboard, mktg channels ,[object Object],[object Object],[object Object],[object Object]
Role: Founder/CEO ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
The 1-Page Business Model (Users + Conversions + Priorities) ,[object Object],[object Object],[object Object],[object Object],[object Object]
TeachStreet Metrics v1: Eye Chart Madness
TeachStreet 1-Page Business Model: Teachers & Students Teachers Students Activation ,[object Object],[object Object],[object Object],[object Object],Retention ,[object Object],[object Object],Referral ,[object Object],[object Object]
TeachStreet: 45-day Claim Rates ( Seattle ,  Portland )
Role: Product / Engineering ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Example Conversion Dashboard (note: *not* actuals… your mileage may vary) Stage Conversion Status Conv.  % Est. Value (*not* cost) Acquisition Visitors -> Site/Widget/Landing Page (2+ pages, 10+ sec, 1+ clicks = don’t abandon) 60% $.05 Activation “ Happy” 1 st  Visit; Usage/Signup (clicks/time/pages, email/profile reg, feature usage) 15% $.25 Retention Users Come Back; Multiple Visits (1-3x visits/mo; email/feed open rate / CTR) 5% $1 Referral Users Refer Others (cust sat >=8; viral K factor > 1; ) 1% $5 Revenue Users Pay / Generate $$$ (first txn, break-even, target profitability) 2% $50
Role: Marketing / Sales ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Example Marketing Channels ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
M AARRR keting Plan ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
One Step at a Time. ,[object Object],[object Object],[object Object],“ You probably can’t save your  Ass  and your  Face  at the same time…  choose carefully .”  – DMC
Summary ,[object Object],[object Object],[object Object],[object Object],[object Object]
Links & Resources ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Dan Olsen CEO, YourVersion Web 2.0 Expo Apr 3, 2009 How to Use the Force of Metrics to Optimize your Web 2.0 Product
The Force of Metrics is Real The Force of Metrics? Really?
Approaching Your Product and Business as an Optimization Exercise ,[object Object],[object Object],[object Object],Copyright © 2009 Olsen Solutions LLC
[object Object],Define the Equation of your Business “Peeling the Onion” Unique Visitors   x  Ad Revenue per Visitor Impressions/Visitor   x  Effective CPM / 1000 Visits/Visitor  x  Pageviews/Visit  x  Impressions/PV New Visitors  + Returning Visitors Invited Visitors  + Uninvited Visitors # of Users Sending Invites  x  Invites Sent/User  x  Invite Conversion Rate Copyright © 2009 Olsen Solutions LLC
[object Object],[object Object],How to Track Your Metrics ,[object Object],[object Object],[object Object],[object Object],[object Object],Copyright © 2009 Olsen Solutions LLC Date Unique Visitors Page views Ad Revenue New User Sign-ups … 4/24/08 10,100 29,600 25 490 4/25/08 10,500 27,100 24 480 …
Analyzing the Value of Product Ideas   Importance and Satisfaction ,[object Object],Copyright © 2009 Olsen Solutions LLC See  Anthony Ulwick’s   “What Customers Want” Bad Great
Prioritizing Product Ideas by ROI Copyright © 2009 Olsen Solutions LLC Investment (developer-weeks) Return (Value Created) Idea C Idea B Idea D Idea A Idea F 1 1 2 3 4 2 3 4 ?
Marrying UI Design with Metrics ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Improving Signup Page Conversion Copyright © 2009 Olsen Solutions LLC
Improving Sign In/Registration Flow Copyright © 2009 Olsen Solutions LLC Open Account Sign in Account Selection Register 56% 44% Forget Password Registration Process 45% drop off (20% of total) 36% overall drop off for this step 70% (32% of Total) 17% drop off (10% of total) 20% drop off (6% of total) 30% (14% of Total) 80% (26% of Total) 55% (24% of Total) 64% of Total Change Password 83% (46% of Total)
Redesigned User Flow Improved Registration Conversion Rate Copyright © 2009 Olsen Solutions LLC 37% improvement in conversion rate Released New Design
Optimization through Iteration: Continuous Improvement Copyright © 2009 Olsen Solutions LLC Measure the metric Analyze the metric Identify top opportunities to improve Design & develop  the enhancement Launch the enhancement ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Summary: Using the Force of Metrics ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Copyright © 2009 Olsen Solutions LLC
[email_address] @danolsen www.yourversion.com May the Force of Metrics be with you!
Dogster, Inc. Case Study Ted Rheingold blog.dogster.com /  @tedr   How actionable metrics informed us we were chasing our tail the wrong key results yet still guided us to the primary objective … bacon making money
 
Dogster, Inc. ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Marketing Initiative Feb ‘07 Goal: 2,000 New Registrants a Day ,[object Object],[object Object],[object Object],[object Object],[object Object]
LANDING PAGE Welcome
Landing Page Cute Overload
LANDING PAGE Daily Candy
LADING PAGE Dog Info
REGISTRATION PAGE -Activate
Quantitative Success Doesn’t  Mean Qualitative Success ,[object Object],[object Object],[object Object],[object Object]
Actionable Results ,[object Object],[object Object],[object Object]
HOMEPAGE - Current
CRAZY EGG Searchers
Dogster Search Traffic
Ted Rheingold   Top Dog, Dogster, Inc. blog.dogster.com twitter: @tedr Web2Expo - 2009
Questions?  #metrics @davemcclure  @danolsen  @tedr
Appendix
Startup Metrics Activation
Website.com ,[object Object],[object Object],[object Object],[object Object],[object Object],do LOTS of  landing  page  &  A/B tests  –  make lots of dumb  guesses &  iterate FAST Activation SEO SEM Apps & Widgets Affiliates Email PR Biz Dev Campaigns, Contests Direct, Tel, TV Social Networks Blogs Domains
Activation What do users do on their first visit? ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Activation What do users do on their first visit? ,[object Object],[object Object],[object Object],[object Object]
Activation ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Startup Metrics Retention
Website.com ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Retention SEO SEM Apps & Widgets Affiliates Email PR Biz Dev Campaigns, Contests Direct, Tel, TV Social Networks Blogs Domains Emails & Alerts System Events & Time-based Features Blogs, RSS, News Feeds
[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Retention How do users come back? How often?
[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Retention How do users come back? How often?
Retention How do users come back? How often? ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Retention ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Startup Metrics Acquisition
Website.com ,[object Object],[object Object],[object Object],[object Object],Acquisition SEO SEM Apps & Widgets Affiliates Email PR Biz Dev Campaigns, Contests Direct, Tel, TV Social Networks Blogs Domains
Acquisition Where are users coming from? ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Acquisition Keyword Vocabulary ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Acquisition Where are users coming from? ,[object Object],[object Object],[object Object],[object Object],Example
Acquisition ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
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
Referral How do users refer others? ,[object Object],[object Object],[object Object],[object Object],[object Object]
Referral Viral Growth Factor ,[object Object],[object Object],[object Object],[object Object],A viral growth factor > 1 means an exponential organic user acquisition.
Referral ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
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
Revenue How do you make money? ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Revenue ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Be Bold.  Be Humble. ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Passion  vs.  Precision ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Types of Measurement ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Design, Optimize for  Conversion
Kano Model: User Needs & Satisfaction Copyright © 2008 Olsen Solutions LLC User Satisfaction User Dissatisfaction Performance (more is better) Delighter (wow) Need not met Need fully met Must Have Needs & features migrate over time
Olsen’s Hierarchy of Web User Needs (adapted from Maslow) Copyright © 2008 Olsen Solutions LLC Is the site up when I want to use it? Is the site fast enough? Does the functionality work? Does the functionality meet my needs? Customer’s Perspective What does it mean to us? Uptime Page Load Time Absence of Bugs Feature Set Usability & Design Decreasing Dissatisfaction Increasing Satisfaction How easy to use is it?
Adding Metrics and Optimization to your Product Process Copyright © 2008 Olsen Solutions LLC Plan Design Develop Business Objectives Product Objectives Prioritized Feature List Scoping Requirements & Design Code Test Launch Site Level Feature Level Optimize Metrics & User Feedback
Using Metrics to Optimize the Equation of your Business ,[object Object],[object Object],[object Object],[object Object],[object Object],Copyright © 2008 Olsen Solutions LLC Return Investment Return Investment Return Investment Metric A Good ROI Metric B Bad ROI Metric C Great ROI

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How to be a Web 2.0 Metrics Jedi (Web 2.0 Expo, April 2009)

  • 1. Become a Web 2.0 Jedi: How to Use the Force of Product & Marketing Metrics to Optimize Your Business Web 2.0 Expo Apr 3, 2009 #w2e #metrics
  • 2. Startup Metrics for Pirates: AARRR! Web 2.0 Expo SF April 2009 Dave McClure, Founders Fund http://www.foundersfund.com/ http://500hats.typepad.com/ http://slideshare.net/dmc500hats/
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  • 9. AARRR!: 5-Step Startup Metrics Model Website.com R evenue $$$ Biz Dev Ads, Lead Gen, Subscriptions, ECommerce A CQUISITION SEO SEM Apps & Widgets Affiliates Email PR Biz Dev Campaigns, Contests Direct, Tel, TV Social Networks Blogs Domains R etention Emails & Alerts System Events & Time-based Features Blogs, RSS, News Feeds
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  • 15. TeachStreet Metrics v1: Eye Chart Madness
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  • 17. TeachStreet: 45-day Claim Rates ( Seattle , Portland )
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  • 19. Example Conversion Dashboard (note: *not* actuals… your mileage may vary) Stage Conversion Status Conv. % Est. Value (*not* cost) Acquisition Visitors -> Site/Widget/Landing Page (2+ pages, 10+ sec, 1+ clicks = don’t abandon) 60% $.05 Activation “ Happy” 1 st Visit; Usage/Signup (clicks/time/pages, email/profile reg, feature usage) 15% $.25 Retention Users Come Back; Multiple Visits (1-3x visits/mo; email/feed open rate / CTR) 5% $1 Referral Users Refer Others (cust sat >=8; viral K factor > 1; ) 1% $5 Revenue Users Pay / Generate $$$ (first txn, break-even, target profitability) 2% $50
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  • 26. Dan Olsen CEO, YourVersion Web 2.0 Expo Apr 3, 2009 How to Use the Force of Metrics to Optimize your Web 2.0 Product
  • 27. The Force of Metrics is Real The Force of Metrics? Really?
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  • 32. Prioritizing Product Ideas by ROI Copyright © 2009 Olsen Solutions LLC Investment (developer-weeks) Return (Value Created) Idea C Idea B Idea D Idea A Idea F 1 1 2 3 4 2 3 4 ?
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  • 34. Improving Signup Page Conversion Copyright © 2009 Olsen Solutions LLC
  • 35. Improving Sign In/Registration Flow Copyright © 2009 Olsen Solutions LLC Open Account Sign in Account Selection Register 56% 44% Forget Password Registration Process 45% drop off (20% of total) 36% overall drop off for this step 70% (32% of Total) 17% drop off (10% of total) 20% drop off (6% of total) 30% (14% of Total) 80% (26% of Total) 55% (24% of Total) 64% of Total Change Password 83% (46% of Total)
  • 36. Redesigned User Flow Improved Registration Conversion Rate Copyright © 2009 Olsen Solutions LLC 37% improvement in conversion rate Released New Design
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  • 39. [email_address] @danolsen www.yourversion.com May the Force of Metrics be with you!
  • 40. Dogster, Inc. Case Study Ted Rheingold blog.dogster.com / @tedr How actionable metrics informed us we were chasing our tail the wrong key results yet still guided us to the primary objective … bacon making money
  • 41.  
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  • 45. Landing Page Cute Overload
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  • 54. Ted Rheingold Top Dog, Dogster, Inc. blog.dogster.com twitter: @tedr Web2Expo - 2009
  • 55. Questions? #metrics @davemcclure @danolsen @tedr
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  • 75. 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
  • 76.
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  • 80. 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
  • 81.
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  • 86. Design, Optimize for Conversion
  • 87. Kano Model: User Needs & Satisfaction Copyright © 2008 Olsen Solutions LLC User Satisfaction User Dissatisfaction Performance (more is better) Delighter (wow) Need not met Need fully met Must Have Needs & features migrate over time
  • 88. Olsen’s Hierarchy of Web User Needs (adapted from Maslow) Copyright © 2008 Olsen Solutions LLC Is the site up when I want to use it? Is the site fast enough? Does the functionality work? Does the functionality meet my needs? Customer’s Perspective What does it mean to us? Uptime Page Load Time Absence of Bugs Feature Set Usability & Design Decreasing Dissatisfaction Increasing Satisfaction How easy to use is it?
  • 89. Adding Metrics and Optimization to your Product Process Copyright © 2008 Olsen Solutions LLC Plan Design Develop Business Objectives Product Objectives Prioritized Feature List Scoping Requirements & Design Code Test Launch Site Level Feature Level Optimize Metrics & User Feedback
  • 90.