actionable metrics @ lean startup meetup berlin

Are you making your product better or worse?

LUKAS FITTL@lfittl

spark59.com

ACTIONABLE METRICS

Lean Startup is trademarked by Eric Ries and used with permission.Business Model Canvas is created by Alex Osterwalder and licensed under CC-BY-SA.

About Myself & Spark59Founded 2 tech startups,worked with many others

“Am I making progressinto the right direction?”

$$$/users/etc

Time

Product/Market Fit

1. Deliver Value 2. Accelerate Growth

Product/Market Fit

1. Value 2. Growth

$10000 / month$2000 / month

Now June 2013

?

CohortAnalysis

Cohort: Group of people that share a common characteristic over a period of time.

Track people,not events.

Group users by sign-up date andtrack their lifecycle.

Cohort Analysis for Retention

Cohort Analysis w Google Analytics

http://danhilltech.tumblr.com/post/12509218078/startups-hacking-a-cohort-analysis-with-google

Dave McClure’s AARRR

ACQUISITION

ACTIVATION

RETENTION

REVENUE

REFERRAL

How do users find you?

Do users have a reat first experience?

Do users come back?

How do you make money?

Do users tell others?

$10000 / month$2000 / month

Now June 2013

?

$2000 / month

ACQACT

20% to paid at $35

RETREV

20% stay for 1 week

8% activate

5% sign up

2 paid$70 / day

10 retained

50 activated

625 signed up

12500 Unique Visitors / day

Cohort of February 12th, 2013

$2000 / month

Now

ACQACT

20% to paid at $35

RETREV

20% stay for 1 week

8% activate

5% sign up

$70 / day

12500 Uniques

$10000 / month

June 2013

20% to paid at $35

20% stay for 1 week

20% activate

10% sign up

$350 / day

12500 Uniques

2

10

50

625

10

50

250

1250

$2000 / month

Now

ACQACT

20% to paid at $35

RETREV

20% stay for 1 week

8% activate

5% sign up

$70 / day

12500 Uniques

$10000 / month

June 2013

20% to paid at $35

20% stay for 1 week

20% activate

10% sign up

$350 / day

12500 Uniques

2

10

50

625

10

50

250

1250

Delivering Value

Customers need toexperience the value,

otherwise they will leave.

ACQUISITION

ACTIVATION

RETENTION

REVENUE

REFERRAL

Value Metrics

How do users find you?

Do users have a great first experience?

Do users come back?

How do you make money?

Do users tell others?

Network effectvsMarketplacevsSaaS

Who delivers the actual value?

Critical Mass of People

The Right People

Your Product

ACQUISITION

ACTIVATION

RETENTION

REVENUE

REFERRAL

Value Metrics

How do users find you?

Do users have a great first experience?

Do users come back?

How do you make money?

Do users tell others?

Analyse Feature Usageof both successful & unsuccessful customers

Analyse Time to Complete an Action

=> Highly useful for targeted email campaign

Request Demo

Commit to become paying

customer

Get email from Ash

Visit landing page

Create AccountProvide billing info for 14-day

trial

Get welcome email with link

to docs

Schedule weekly

meetingsReview docs

Establish success metrics

Map user actions

Send first production

event

ACTIVATION

SIGNUP

ACQUISITION

Baseline AARRR metrics

Identify key metric to improve

Define experiments

First meeting

UPGRADE

RETENTION

Send events to staging

PERSONAS

Technical Founder

Product Owner

Week 1

Week 1

Week 1

Week 2

Week 3

Week 4

Usability Tests

http://www.slideshare.net/JohnnyForeigner/active-testing-sketches-leancamp-bcn

ACQUISITION

ACTIVATION

RETENTION

REVENUE

REFERRAL

Value Metrics

How do users find you?

Do users have a great first experience?

Do users come back?

How do you make money?

Do users tell others?

Did Key Activity More than Once

“Created at least 3 cards on the Kan-ban board”

“Wrote at least 2 blog posts”

“Wrote at least 5 restaurant reviews”

Frequency

Daily?

Weekly?

Monthly?

1-day52%

7-day31%

14-day22%

30-day14%

Accelerating Growth

ACQUISITION

ACTIVATION

RETENTION

REVENUE

REFERRAL

Growth Metrics

How do users find you?

Do users have a great first experience?

Do users come back?

How do you make money?

Do users tell others?

The engine of growth is the mechanism that startups use to achieve sustainable growth.

-Eric Ries, The Lean Startup

StickyOrganic Growth > Churn Rate

PaidLifetime Value > Acquisition Costs

ViralViral Coefficient > 1.0

Taking Action

Metrics are not a “Task”.

☑ Built a Metrics Dashboard

☐ Profit!☐ ?

IDEAS

PRODUCTDATA

MEASURE

BUILDLEARN

Experiment

Hypothesesinstead of

Requirements

Requirement:Users can create 3D avatars.

We believe that users will create a 3D avatar and spend more time on other

users profiles.

Hypothesis:

50% of newly signed up users will create a 3D avatar,

Avg time spent on user profiles will go from 30s to 1min+

Falsifiable Hypothesis:

Validated Learning:Define Hypothesis,

Build & Launch Experiment,Learn from the Results

Test yourValue Hypothesis first.

Unless you need critical massto deliver value.

ExperimentReports

1. Context - Why is this relevant?2. Quantify Your Goals3. Set Scope & Timebox

Planning an Experiment

Learning Goal

EXPERIMENT REPORT Author:Title: Created:

Experiment Scope

Minimum Build Plan

Lean Stack by Spark59.com

Falsifiable Hypothesis

Validated Learning

Results

Next Action

What are you trying to learn or achieve?

List the build plan step by step to get your measurement and experiment.

How many and/or how long will the experiment last?

[DATE][NAME][TITLE]

Your list of statements on the expected outcome of the experiment.

Use this format: [Specific Repeatable Action] will [Expected Measurable Outcome]

Enter the data.

Summarize your learning from the experiment.

VALIDATED or INVALIDATED

Whatʼs the next experiment?

Learning Goal

EXPERIMENT REPORT Author:Title: Created:

Experiment Scope

Minimum Build Plan

Lean Stack by Spark59.com

Falsifiable Hypothesis

Validated Learning

Results

Next Action

What are you trying to learn or achieve?

List the build plan step by step to get your measurement and experiment.

How many and/or how long will the experiment last?

[DATE][NAME][TITLE]

Your list of statements on the expected outcome of the experiment.

Use this format: [Specific Repeatable Action] will [Expected Measurable Outcome]

Enter the data.

Summarize your learning from the experiment.

VALIDATED or INVALIDATED

Whatʼs the next experiment?

Left Side DefinesThe Experiment

Learning Goal

EXPERIMENT REPORT Author:Title: Created:

Experiment Scope

Minimum Build Plan

Lean Stack by Spark59.com

Falsifiable Hypothesis

Validated Learning

Results

Next Action

What are you trying to learn or achieve?

List the build plan step by step to get your measurement and experiment.

How many and/or how long will the experiment last?

[DATE][NAME][TITLE]

Your list of statements on the expected outcome of the experiment.

Use this format: [Specific Repeatable Action] will [Expected Measurable Outcome]

Enter the data.

Summarize your learning from the experiment.

VALIDATED or INVALIDATED

Whatʼs the next experiment?

Right Side Analyses The

Results

✘Failure is good.

Validated Learning is ourMeasurement of Progress.

IDEAS

PRODUCTDATA

MEASURE

BUILDLEARN

Build Measure Learn

✓✘

Kan-ban Board

Weekly Strategy Meeting

Review ExperimentsOnly In Weekly Meeting

Focus On EfficiencyIn Daily Stand-ups

Review Experiment ResultsChallenge the Interpretation

Kill / Restart overdue Experiments

Thanks!

Learn more:j.mp/s59-metrics