This document discusses lean metrics for startups. It begins by explaining that traditional accounting metrics are not helpful for evaluating entrepreneurs. It then discusses what makes a good metric according to lean startup principles - that metrics should be comparative, understandable, and change user behavior. The document provides examples of lean metrics used at the New York Times and outlines the stages of metrics from empathy to scale. It also discusses how to use metrics when fundraising and what investors look for like active users and revenue potential.

1. Lean Workbench
For creating and tracking metrics that matter
Chris Wiggins and Jennifer Rubinovitz
chris.wiggins@columbia.edu jrubinovitz@columbia.edu

2. "Standard accounting is not
helpful in evaluating
entrepreneurs."
- Eric Ries, "The Lean Startup"
(Random House, Inc. 2011)

3. How can we quantify a
company?

4. Lean Startup Feedback Loop

5. Business Model Canvas
www.launchpadcentral.com

6. Launchpad Central Metrics
www.launchpadcentral.com

7. What are “Lean” metrics?

8. What are “Lean” metrics?
Stop lying to yourself.
(this and following slides inspired by “Lean Analytics”, Croll, 2011)

9. What are “Lean” metrics?
Stop lying to yourself.
Traditional metrics are vanity metrics.

10. What are “Lean” metrics?
Stop lying to yourself.
Traditional metrics are vanity metrics.
So, what makes a good metric?

11. What are “Lean” metrics?
So, what makes a good metric?

12. What are “Lean” metrics?
So, what makes a good metric?
● a good metric is comparative

13. What are “Lean” metrics?
So, what makes a good metric?
● a good metric is comparative
● a good metric is understandable

14. What are “Lean” metrics?
So, what makes a good metric?
● a good metric is comparative
● a good metric is understandable
● a good metric changes the way you behave

15. Metric Types
qualitative: unstructured, anecdotal, revealing, hard to aggregate
quantitative: numbers and statistics

16. Metric Types
vanity: make you feel good, don't change how you act
actionable: change behavior by helping choose a course of action

17. Metric Types
exploratory: speculative and try to find unknown insights
reporting: keep you abreast of normal operations

18. Metric Types
leading: predictive understanding of future. better because you
can act on them
lagging: explain the past

19. Metric Types
correlated: metrics change together
casual: one metric causes another to change

20. What are “Lean” metrics?
Lean metrics are actionable:
They help you change your behavior by
enabling to choose a course of action in the lean
startup build-measure-learn feedback loop.

21. Lean Metrics In Practice at
the New York Times

22. Source: New York Times 2014 Innovation Report

23. Source: New York Times 2014 Innovation Report

24. Source: New York Times 2014 Innovation Report

25. Source: New York Times 2014 Innovation Report

26. Source: New York Times 2014 Innovation Report

27. Source: New York Times 2014 Innovation Report

28. Stages of Lean Analytics
1. Empathy
2. Stickiness
3. Virality
4. Revenue
5. Scale

29. Lean Metrics with Lean Workbench

30. Empathy
Get inside your target market’s head
● Make sure you’re solving a problem they’d
pay for
● Run surveys

31. Empathy
Get inside your target market’s head
● Make sure you’re solving a problem they’d
pay for
● Run surveys

32. Stickiness
Now that you’re creating your product focus on:
● retention
● engagement

33. Stickiness
Now that you’re creating your product focus on:
● retention
● engagement

34. Virality
People need to know about your product to buy
your product.

35. Virality
People need to know about your product to buy
your product.

36. Revenue
● Prove you can make money
● Project future revenue

37. Revenue
● Prove you can make money
● Project future revenue

38. Benchmarking
Compare these metrics with your peers
Eventually: also by sector, other options

39. Scale
● Prove a market
● Raise capital or bootstrap

40. A/B and Multivariate Testing
www.optimizely.com

41. A Look at a VC’s Pipeline

42. A Look at a VC’s Pipeline
● Meetings: Average venture firm has approximately 500
face-to-face meetings each year. Only 10 percent progress
from that stage.
http://venturebeat.com/2014/04/19/heres-a-look-inside-a-typical-vcs-pipeline-a-must-read-for-entrepreneurs

43. A Look at a VC’s Pipeline
● Meetings: Average venture firm has approximately 500 face-
to-face meetings each year. Only 10 percent progress from
that stage.
● Due Diligence: Do you have high rates of churn or burn? Is
your product and financial model sound?
http://venturebeat.com/2014/04/19/heres-a-look-inside-a-typical-vcs-pipeline-a-must-read-for-entrepreneurs

44. A Look at a VC’s Pipeline
● Meetings: Average venture firm has approximately 500 face-
to-face meetings each year. Only 10 percent progress from
that stage.
● Due Diligence: Do you have high rates of churn or burn? Is
your product and financial model sound?
● Investments: Mid-sized firms invest in ⅕ that make it past due
diligence. Customer acquisition and a “magnetic” CEO
matter.
http://venturebeat.com/2014/04/19/heres-a-look-inside-a-typical-vcs-pipeline-a-must-read-for-entrepreneurs

45. The Anatomy of a Seed
Round
seed round analysis by Brendan
Baker

46. Finding Investors

47. Finding Investors
● Crunchbase

48. Finding Investors
● Crunchbase
● Angellist

49. Finding Investors
● Crunchbase
● Angellist
● VC Matcher

50. Crunchbase vs Angellist
Crunchbase- companies at all stages,
crowdsourced data
Angellist- usually companies looking for early
stage funds

51. Metrics For Investors

52. Metrics For Investors
● active users

53. Metrics For Investors
● active users
● founder reputation

54. Metrics For Investors
● active users
● founder reputation
● revenue potential

55. Metrics For Investors
● active users
● founder reputation
● revenue potential

56. Metrics For Investors
● active users
● founder reputation
● revenue potential
● changes in the market that make now the
time for your startup

57. Lean Metrics with Lean Workbench
www.leanworkbench.com

69. Future Work
● mentor and interview matcher
● segments, cohorts, a/b testing, and
multivariate analysis

70. Resources
The Lean Startup
Lean Analytics
Venture Deals: Be Smarter Than Your Lawyer
and Venture Capitalist