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Pirate Metrics & Growth Hacks
The document discusses key metrics and strategies for optimizing different stages of the customer lifecycle and growth hacking for startups. It introduces the AARRR framework for acquisition, activation, retention, referral, and revenue. Specific metrics are provided for each stage like conversion rates, pages per visit, retention rates, viral growth factor, and more. Tips are also given for improving metrics like focusing on the user experience for activation and using emails and widgets for retention and referrals. The goal is to ensure the customer lifetime value exceeds the customer acquisition cost for long term profitability.
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Pirate Metrics & Growth Hacks
- 1. Pirate Metrics & Growth Hacks Pol Valls Soler
- 2. @polvallssoler! ""linkedin.com/in/polvallssoler! " "slideshare.net/polvallssoler! "! Reddit for spanglish geeks: http://zumogeek.com/ ! iOS app for discovering people nearby: http://joinerapp.com/ ! Advising entrepreneurs at La Salle Technova Barcelona! Pol Valls Soler ! Currently creating:! Co-creator of:! Moneda Catalana (Catalan Cryptocurrency): http://moneda.cat/ ! Feel Real Estate Barcelona Property: http://feelrealestate.com/
- 3. Before 2000! • SunServers! • Oracle DB! • Exodus Hosting! • 12-24mo dev cycle! • 6-18mo sales cycle! • <100M people online! • $1-2M seed round! • $3-5M Series A! • Sand Hill Road crawl! • Big, Fat, Dinosaur Startup! After 2008! • AWS, Google, PayPal, FB, TW! • Cloud + Open Source SW! • Lean Startup / Startup Wknd! • 3-90d dev cycle! • SaaS / online sales! • >3B people online! • <$100K incub + <$1M seed! • $1-3M Series A! • Angel List global visibility! • Lean, Little, Cockroach Startup! Some context: Before & After 2 Dot-Com Crashes Source:500startups! Daft Punk Startup: ! Simpler, Faster, Cheaper, Smarter
- 4. • LESS Capitalrequired to build product, get to market – Dramatically reduced $$$ on servers, software, bandwidth – Crowdfunding, KickStarter, Angel List, Funders Club, etc – Cheap access to online platforms for 100M+ consumers, smallbiz, etc • MORE Customers via ONLINE platforms (100M+ users) – Search (Google) – Social (Facebook, Twitter) – Mobile (Apple, Android) – Local (Yelp, Groupon, Living Social) – Media (YouTube, Pinterest, Instagram, Tumblr) – Comm (Email, IM/Chat, Voice, SMS, etc) • LOTS of little bets: Accelerators, Angels, Angel List, Small Exits – Y Combinator, TechStars, 500 Startups – Funding + Co-working + Mentoring -> Design, Data, Distribution – “Fast, Cheap Fail”, network effects, quantitative + iterative investments Source:500startups! Some context: Changes in Tech Startups
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- 7. ACQUISITION! Users come tothe site; you have their attention
- 8. ACTIVATION! User performs somekey activity that indicates a good first visit
- 9. RETENTION! User continues todo that key activity indicating they like your product
- 10. REFERRAL! User gets otherusers to join
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- 12. AARRR Funnel: CustomerLifecycle / Conversion Behavior!
- 13. Emails & Alerts Blogs, Content System Events & Time-‐ based Features Biz Dev Ads, Lead Gen, SubscripDons, 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 AARRR Funnel: Customer Lifecycle / Conversion Behavior!
- 14. BLOG EXAMPLE! Acquisition -users come to the site and stay for at least 2 minutes Activation - user signs up for RSS/newsletter 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 !
- 15. SAAS EXAMPLE! Acquisition -user signs up for the service 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)
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- 17. if CLV >CAC, then PROFIT!
- 18. AARRR Funnel: CustomerLifecycle / Conversion Behavior! Emails & Alerts Blogs, Content System Events & Time-‐ based Features Biz Dev Ads, Lead Gen, SubscripDons, 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
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- 20. 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
- 21. 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
- 22. 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
- 23. KEY METRICS TOTRACK!
- 24. ACQUISITION! Key Metrics ToTrack:! • 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 !
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- 26. ACQUISITION! Extra tip: Howto get your first 100 users! 1) What exisDng soluDon do you believe your product is beTer than? 2) Where can you find a criDcal mass of people who use the exisDng soluDon? 3) Go there. Talk to them. Show them your product.
- 27. ACQUISITION! Extra tip: ReverseEngineered 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 ($)! ! !
- 28. ACTIVATION! Key metrics totrack:! • 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!
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- 30. RETENTION! Key metrics totrack:! • 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!
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- 32. RETENTION! Retention Tips:! • Email issimple 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)!
- 33. REFERRAL! Key metrics totrack:! 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.!
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- 35. REFERRAL! Referral Tips:! • Personal sendto friend (Email / IM)! • Social Media! • Widgets / Embeds! • Affiliates!
- 36. REVENUE! Key metrics totrack:! • 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)!
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- 40. CAC (Customer AcquisitionCost)! Take only a porDon of those salaries and expenses in the early days to give a beTer indicaDon of how CAC will look when you are at scale.
- 41. CLV or LTV(Customer Lifetime Value)! if the Customer Churn rate is a monthly % or yearly %, then the Customer LifeDme will be for the same Dme period.
- 42. 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 consideraDon Gross Margin:
- 43. a = iniDal 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 assumpDon that revenue increases at a roughly fixed rate every month for the enDre lifeDme of the customer)
- 44. if 1 < LTV/CAC < 3 if LTV/CAC < 1 LTV : CAC Ratio Awesomeness! > 3 if (It’s ok. As a startup, don’t worry iniDally about LTV>3*CAC) your business model is broken!
- 45. Tools for metricsanalysis …
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- 47. Less Budget, MoreCreativity, More Automation -> Maximize Output Growth Hacking
- 48. Different landing pagesaccording to traffic source! (Search Engines for SEO –> Footer vs Direct ! Traffic -> No footer)! Groupon ACQUISITION! Caution! Use at your own risk! This is cloaking!!
- 49. Groupon ACTIVATION &RETENTION! !
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- 51. Groupon REFERRAL! !Sharing isin Groupon’s DNA
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- 53. Linkedin RETENTION &REFERRAL! !
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- 55. 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 PeopleYou May Know page… (NOT THE BEST THING TO DO… people can hate you)
- 56. Dropbox ACQUISTION! ! Signup drivenhomepage: before aier
- 57. Dropbox REFERRAL! ! Sharing simplicityand availability on Multiple Devices & Platforms:
- 58. Dropbox REFERRAL &REVENUE! ! Get more space
- 59. Dropbox ACQUISTION &REFERRAL! ! Dropbox Great Space Race!
- 60. 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!
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- 64. It doesn’t needto be online (initially)!
- 65. It doesn’t needto be online (initially)!
- 66. It doesn’t needto be online (initially)!
- 67. It doesn’t needto be online (initially)!
- 68. It doesn’t needto be online (initially)! -‐ 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 AdverDsing Cost = $283 Hand out all 4,000 flyers + do some heavy flir=ng
- 69. It doesn’t needto be online (initially)! -‐ 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 AdverDsing Cost = $283 Hand out all 4,000 flyers + do some heavy flir=ng Got 118 conversions (2,95% conversion rate) -‐> 118 x $45 payout = $5,310 Revenue -‐ $283 cost = $5,027 PROFIT!
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- 72. ACQUISITION! hack Caution!Use at your own risk! This is cloaking!! -‐> -‐>
- 73. ACQUISITION! 1-‐ Setup domain with a WordPress news theme. 2-‐ Hire writers to rewrite news arDcles for $2 each. (Avoid copying to ensure “journalisDc quality”.) 3-‐ Start with 150 back-‐dated arDcles to show that the site has some momentum. 4-‐ Setup a nice logo and real phone number. 5-‐ Double check that the site complies with the Google webmaster guidelines. 6-‐ Submit for approval.
- 74. ACQUISITION & REFERRAL! From adverDsing here…
- 75. PS: I LoveYou. Get Your Free Email at Hotmail ACQUISITION & REFERRAL! To simply wriDng this footer on each email…
- 76. ACQUISITION & REFERRAL! And here are the results:
- 77. ACQUISITION & REFERRAL(Through viral content)!
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- 79. Extra tip: ReverseEngineered App Store’s ranking algorithm (approximation)! AppStore Ranking = H + D + R + E + S ! !H = # of installs weighted for the past few hours! !D = # of installs weighted for the past few days! !R = Reviews (star rating + number of reviews)! !E = Engagement (# of times app opened etc.) ! !S = Sales ($)! ! ! Luck? AppStore Bot? Dark paTern? ACQUISITION, REFERRAL & REVENUE!
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- 90. REVENUE & PROFIT! Unlock all books is the clear top revenue generator.
- 91. REVENUE & PROFIT! The $144,146,165 BuOon
- 92. REVENUE & PROFIT!The $144,146,165 BuOon When cabs were cash only, the average Dp was roughly 10%. Aier the introducDon of this system, the Dp percentage jumped to 22%. Those three buTons resulted in $144,146,165 of addi=onal =ps per year.
- 93. When Growth Hacking Goes Fail Hacking
- 95. Path Facebook blocked Path’s “Find Friends” access following spam controversy
- 96. Path Path texts your enDre phonebook
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- 99. Rap Genius: NoSEO Genius
- 100. Rap Genius: NoSEO Genius Rap Genius fell from around 700,000 uniques a day to around 100,000.!
- 101. Rap Genius: NoSEO Genius Google recommends a 4-step approach to fixing the problem:! 1. Download a list of links to your site from Webmaster Tools.! 2. Check this list for any links that violate our guidelines on linking.! 3. For any links that violate our guidelines, contact the webmaster ! of that site and ask that they either remove the links or prevent them! from passing PageRank, such as by adding a rel="nofollow" attribute.! 4. Use the Disavow links tool in Webmaster Tools to disavow any links ! you were unable to get removed.! But they had a MASSIVE problem… so they had to write a scraper to! analyze 178k URLs using concurrency on a Heroku cloud. #NOTBAD!
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- 104. Talleres de Lean Startup pvalls@technovabarcelona.org
- 105. @polvallssoler! ""linkedin.com/in/polvallssoler! " "slideshare.net/polvallssoler! "! Reddit for spanglish geeks: http://zumogeek.com/ ! iOS app for discovering people nearby: http://joinerapp.com/ ! Advising entrepreneurs at La Salle Technova Barcelona! Thanks! Pol Valls Soler ! Currently creating:! Co-creator of:! Moneda Catalana (Catalan Cryptocurrency): http://moneda.cat/ ! Feel Real Estate Barcelona Property: http://feelrealestate.com/