nbtc 2014 - startup analytics presentation
DESCRIPTION
A short presentation covering the essential parts of aalytics for startups.TRANSCRIPT
Startups & AnalyticsStartups & AnalyticsA (very) practical guide - abridgedA (very) practical guide - abridged
SO YOU WANT TO BUILD A SO YOU WANT TO BUILD A STARTUP ...STARTUP ...
... yolo?
#1 SHOULD YOU?#1 SHOULD YOU?(aka - why building a startup sucks)
• Not very status-oriented• Doesn’t follow rules very well and questions authority• Can handle high degrees of ambiguity or uncertainty• Can handle rejection, being told “no” often and yet still have the confidence in your idea• Very decisive. A bias toward making decisions – even when only right 70% of the time – moving forward & correcting what doesn’t work• A high level of confidence in your own ideas and ability to execute• Not highly susceptible to stress• Have a high risk tolerance• Not scared or ashamed of failure• Can handle long hours, travel, lack of sleep and the trade-offs of having less time for hobbies & other stuff
Common attributes of entrepreneurs
ARE YOU SURE YOU WANT TO DO THIS ARE YOU SURE YOU WANT TO DO THIS ... ?... ?
“9 out of 10 startups fail”
http://www.quora.com/What-is-the-truth-behind-9-out-of-10-startups-fail
According to the National According to the National Venture Capitalists Venture Capitalists
AssociationAssociation3 startups fail, have gone bankrupt or business were closed
3 startups are worse than average, aren’t very profitable, returning less than the invested capital, but are still active
3 startups are a moderate success, are profitable, returning just the invested capital, were not acquired yet and are still active
1 highly successful startup that will pay the investor a multiple return on all of his 10 investments; that startup had an IPO or were a target of a significant acquisition
““I DIDN’T REALLY HAVE A I DIDN’T REALLY HAVE A CHOICE”CHOICE”
#2 FINDING THE RIGHT #2 FINDING THE RIGHT PEOPLEPEOPLE“It’s like dating all over again, and I can’t wait to find the meat
markets”
BUILDING THE RIGHT BUILDING THE RIGHT TEAMTEAM
http://solveforinteresting.com/the-three-kinds-of-ceo/http://steveblank.com/2011/12/13/the-startup-team/
HACKER, HUSTLER, HACKER, HUSTLER, DESIGNER, VISIONARYDESIGNER, VISIONARY
If this is a sea, wtf If this is a sea, wtf are the fish?are the fish?
Fellow Students
Founder Dating (http://founderdating.com/about/)
Startup Weekend
Startup Drinks
Bitmaker Labs
Make Your Own
Tell your friends you’re in the market
WHOLE LOT OF TALENT, WHOLE LOT OF WHOLE LOT OF TALENT, WHOLE LOT OF DEMANDDEMAND
(shit.)
#3 FINDING YOUR IDEA#3 FINDING YOUR IDEA
Most startups don’t even Most startups don’t even know what problem they know what problem they
solvesolvePaypal first built for Palmpilots
Freshbooks was invoicing for a web design firm
Wikipedia was to be written by experts only
Mitel was a lawnmower company
Hotmail was a database company
Flickr was going to be an MMO (it’s back to being one now)
Twitter was a podcasting company
Autodesk made desktop automation software
#4 THE LEGAL SHIT#4 THE LEGAL SHITIANAL (sounds worse than it is - it just means that I’m not a lawyer)
THANKFULLY, THIS PART IS THANKFULLY, THIS PART IS EASYEASY
Enter Dave Weekly
http://dweek.ly/stock/http://dweek.ly/stock/Stock
The Board
Equity
Liquidity
Investors
Fundraising
Options
Pricing
Pools
Ownership
Advisors
Acceleration & Allocations
#5 THE PROTOTYPE#5 THE PROTOTYPE
LEARN FASTER WITH CUSTOMER LEARN FASTER WITH CUSTOMER DEVELOPMENTDEVELOPMENT
by Hiten Shah
http://www.slideshare.net/startuplessonslearned/hiten-shah-the-leanstartupsxsw-7365813
#5 THE PRODUCT#5 THE PRODUCTor Finding Product/Market Fit
#6 THE MONEY#6 THE MONEYWhat you need to know about fundraising
BEFORE YOU DO BEFORE YOU DO ANYTHINGANYTHING
Some rules of thumbSome rules of thumb
You have paying flagship customers or loyal high profile individual evangelists
You’ve reached 10k registered / active users (if you’re b2c)
Fundraising takes about a year and gives you about a year
Some rules of thumbSome rules of thumb
Begin to get to know investors in the Toronto area now (OMERS, MaRS, iNovia, BDC, Mantella)
Spend as much time as you can in the valley, and get valley interest first
Come back to Toronto investors with something to show
Measure the right Measure the right things.things.
Act 2Act 2
Understanding your Understanding your goals.goals.
http://www.flickr.com/photos/itsgreg/446061432/
Analytics is the Analytics is the measurement of measurement of movementmovement towards towards business goalsbusiness goals..
http://www.flickr.com/photos/itsgreg/446061432/
56
NEWNEWVISITORSVISITORS
GROWTHGROWTH
BOUNCEBOUNCERATERATE
LOSSLOSS
CONVERSICONVERSIONON
RATERATE
GOALGOALVALUEVALUE
xTIMETIMEONONSITESITE
PAGEPAGESSPERPERVISITVISIT
NUMBERNUMBEROF OF VISITSVISITS
SEARCHSEARCH
ESES
TWEETSTWEETS
MENTIOMENTIO
NSNS
ADS ADS
SEENSEEN
ATTENTION
ENGAGEMENT
CONVERSION
In a startup, the In a startup, the purpose of analytics is purpose of analytics is to to iterate to a iterate to a product/market fitproduct/market fit before the money runs before the money runs out.out.
If you remember only one thing...If you remember only one thing...
Message reachMessage reachMessage reachMessage reach
Infrastructure Infrastructure healthhealth
Infrastructure Infrastructure healthhealth
Market Market sentimentsentiment
Market Market sentimentsentiment
User User engagementengagement
User User engagementengagement
Business modelBusiness modelBusiness modelBusiness model
SustainabilitySustainabilitySustainabilitySustainability
Viral coefficientViral coefficientViral coefficientViral coefficient
AmplificationAmplificationAmplificationAmplification
PerformabilityPerformabilityPerformabilityPerformability
Customer researchCustomer researchCustomer researchCustomer research
Community sentimentCommunity sentimentCommunity sentimentCommunity sentiment
Time since last visitTime since last visitTime since last visitTime since last visit
Core goalsCore goalsCore goalsCore goalsExtended funnel Extended funnel abandonmentabandonmentExtended funnel Extended funnel abandonmentabandonmentMovement towards goalsMovement towards goalsMovement towards goalsMovement towards goals
Cost per engaged visitorCost per engaged visitorCost per engaged visitorCost per engaged visitor
Peak to average ratioPeak to average ratioPeak to average ratioPeak to average ratio
Minimum sustainable burnMinimum sustainable burnMinimum sustainable burnMinimum sustainable burn
Viral coefficientViral coefficientOn average, for each message they hear, On average, for each message they hear, how many people does someone tell?how many people does someone tell?
11
------------------------------------------------------------------------------------------------------------Get your free private email at Get your free private email at http://www.hotmail.com------------------------------------------------------------------------------------------------------------
v ≠ 1, pt = δp0 (1 – vt+1) / (1 – v) + p0
http://robert.zubek.net/blog/2008/01/30/viral-coefficient-calculation/
Or simplerOr simpler
UsersUsersUsersUsers ViralViralcoefficientcoefficient
ViralViralcoefficientcoefficient
Churn &Churn &abandonmenabandonmen
tt
Churn &Churn &abandonmenabandonmen
ttxx -- >> 11
http://www.quora.com/Viral-Growth-and-Analytics/What-is-the-definitive-way-to-calculate-viral-coefficient-for-a-social-game
How well are messages How well are messages being amplified?being amplified?
22
5050%%
7575%%
100100%%
5050%%
= = 44
22 33 11 = = 66
14.14.55
Downstream reach (aggregate followers)
Downstream reach (aggregate followers)
Amplification chance(how relevant the
content is + what the recipient thinks of the
sender)
Amplification chance(how relevant the
content is + what the recipient thinks of the
sender)
2525%%
..55
5050%%
22
5050%%
11= =
3.53.5
RepurposingRepurposing(spread to (spread to otherothercommunities)communities)
AmplificationAmplification(virality and(virality andmessage message spread)spread)
ConversioConversionsns
VisitVisitss
Shopping Shopping cartcart
Payment Payment optionsoptions
Seed Seed (starting(starting
communitcommunity)y)Reach Reach
(impressions)(impressions)
Viral message spreadViral message spread
ConversioConversionsns
VisitVisitss
Shopping Shopping cartcart
Payment Payment optionsoptions
Reach Reach (impressions)(impressions)
Emphasis on Emphasis on getting viral getting viral ratio above 1ratio above 1(Retweeting, (Retweeting, Fan, Email Fan, Email
forward, Reddit forward, Reddit upvote, other upvote, other
loops)loops)
Emphasis on Emphasis on getting viral getting viral ratio above 1ratio above 1(Retweeting, (Retweeting, Fan, Email Fan, Email
forward, Reddit forward, Reddit upvote, other upvote, other
loops)loops)
Megablogger proponentsMegablogger proponents
ConversioConversionsns
VisitVisitss
Shopping Shopping cartcart
Payment Payment optionsoptions
Seed Seed (starting(starting
communitcommunity)y)Reach Reach
(impressions)(impressions)Emphasis on convincing highly-Emphasis on convincing highly-
followed, highly acted-upon followed, highly acted-upon seed seed groupgroup to spread the word. to spread the word.
Emphasis on convincing highly-Emphasis on convincing highly-followed, highly acted-upon followed, highly acted-upon seed seed
groupgroup to spread the word. to spread the word.
A call to actionA call to action
ConversioConversionsns
VisitVisitss
Shopping Shopping cartcart
Payment Payment optionsoptions
Reach Reach (impressions)(impressions)
Emphasis on Emphasis on maximizing maximizing
impression-to-click impression-to-click ratioratio within the within the
communitycommunity
Emphasis on Emphasis on maximizing maximizing
impression-to-click impression-to-click ratioratio within the within the
communitycommunity
Long funnel: Beers for Long funnel: Beers for CanadaCanada
700,000s
1,642
150RT
3277
1010
1515
x x $100$100x x $20$20x x $7$7
20Seed Seed ratio:ratio:
35,000:135,000:1FolloweFollowe
rsrs
VisitorVisitors:s:
0.23%0.23%
ConversioConversions:ns:
1.95%1.95%
Revenues:Revenues:Average: $39.54Average: $39.54Median: $20Median: $20
Total: Total: $1,005$1,005
AmplificatioAmplification:n: 2.9% 2.9%
2RepurposinRepurposingg
2,000
How performable are How performable are we?we?Health of the infrastructure (uptime, Health of the infrastructure (uptime, latency)latency)
33
Impact of page load time on Impact of page load time on average daily searches per average daily searches per
useruser
Impact of additional Impact of additional delay on business delay on business
metricsmetrics
Shopzilla’s makeoverShopzilla’s makeover
5-5-12%12%
Traffic levelsTraffic levels
Bounce rateBounce rate
Average time on Average time on sitesite
Pages per visitPages per visit
Conversion rateConversion rateand order valueand order value
11 22 33 44 55 66 77 88 991100
1111
1122
1133
1144
1155
1166
00
5,05,00000
Un
iqu
e p
ag
e
Un
iqu
e p
ag
e
vie
ws
vie
ws
>4s or >4s or errorerror2-2-4s4s<2<2ss
ConversiConversionsons
$$00
$10,0$10,00000
Reven
ue (to
tal
Reven
ue (to
tal
sale
s)sa
les)
What do visitors think of What do visitors think of us?us?Both on the site (VoC) and in the world Both on the site (VoC) and in the world (community monitoring)(community monitoring)
4&54&5
How engaged are How engaged are users?users?Time since last visit, as a histogram, not Time since last visit, as a histogram, not an average, compared to baselines.an average, compared to baselines.
66
Days since last Days since last visitvisit
12012000
10010000
808000
606000
404000
202000
0011 22 33 44 55 66 77 88 99
Days since last Days since last engagementengagement
JanuarJanuaryy
FebruaFebruaryry
DisengagDisengageded
(>10 (>10 days)days)
2502500000
2002000000
1501500000
1001000000
50050000
00
Nu
mb
er
of
Nu
mb
er
of
use
rsu
sers
Core goals driving the Core goals driving the businessbusinessPick the 3-4 tasks you’ve set for users. Pick the 3-4 tasks you’ve set for users. Always know what these are and why Always know what these are and why they correlate to business growth.they correlate to business growth.
77
Localmind snapshotLocalmind snapshot
Extended funnel Extended funnel abandonmentabandonmentNot just on the site: Email open rateNot just on the site: Email open rate
88
In the last build, what In the last build, what moved us towards & moved us towards & away from goals?away from goals?Requires knowing the goals Requires knowing the goals andand the key the key features addedfeatures added
99
Cost per visitorCost per visitorOperations costs per site visitorOperations costs per site visitor
1100
Peak-to-average ratioPeak-to-average ratioHow much busier are you at busy times?How much busier are you at busy times?
What premium do you pay for that What premium do you pay for that surplus?surplus?
Can you decommission well?Can you decommission well? 1111
http://community.microsoftadvertising.com
Minimum sustainable Minimum sustainable burnburn
1122
http://www.flickr.com/photos/dougww/833127501/
Message reachMessage reachMessage reachMessage reach
Infrastructure Infrastructure healthhealth
Infrastructure Infrastructure healthhealth
Market Market sentimentsentiment
Market Market sentimentsentiment
User User engagementengagement
User User engagementengagement
Business modelBusiness modelBusiness modelBusiness model
SustainabilitySustainabilitySustainabilitySustainability
Viral coefficientViral coefficientViral coefficientViral coefficient
AmplificationAmplificationAmplificationAmplification
PerformabilityPerformabilityPerformabilityPerformability
Customer researchCustomer researchCustomer researchCustomer research
Community sentimentCommunity sentimentCommunity sentimentCommunity sentiment
Time since last visitTime since last visitTime since last visitTime since last visit
Core goalsCore goalsCore goalsCore goalsExtended funnel Extended funnel abandonmentabandonmentExtended funnel Extended funnel abandonmentabandonmentMovement towards goalsMovement towards goalsMovement towards goalsMovement towards goals
Cost per engaged visitorCost per engaged visitorCost per engaged visitorCost per engaged visitor
Peak to average ratioPeak to average ratioPeak to average ratioPeak to average ratio
Minimum sustainable burnMinimum sustainable burnMinimum sustainable burnMinimum sustainable burn
1212thingsthings
totowatchwatch
UsabilityUsability
++11
