startup metrics: learn how to measure & drive your startup

Startup Metrics: Identify, Measure, & Drive Your Startup

Hala Salehwww.27sprints.com | @HalaSaleh1

2015 Hala Saleh | @HalaSaleh1 | 27Sprints

•  <<Name>>•  I work at <<Startup, Not-Startup>>•  The top 3 things I want to learn about Startup

Metrics are: ______________________________ _________________________________________ _________________________________________

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What Does Progress Look Like?


100% OF US LIE TO OURSELVES

4 2015 Hala Saleh | @HalaSaleh1 | 27Sprints

100% of us lie to ourselves

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“We’re killing it!”“The market isn’t ready.”

“Our user base has increased100% We’re on a solid growth path.”

“We got 10K views this week. Conversion will be a breeze!”

“My Tweet got 13 Retweets. I NAILED it (and am a genius).”

“My FB status got 231 Likes. I am kind of a big deal.”


PDCA: TO IMPROVE WE MUST MEASURE



Plan -> Do -> Check -> Act

METRICS: THE GOOD, THE BAD, & THE REST



Good Metrics1.  Comparable:

“90% click-through rate” OR“Decreased click-through rate” ?

2.  Understandable:Your audience should be able to understand your metrics.

3.  Ratios:“# Purchases per free account” OR“# Purchases” ?

4.  THEY CHANGE THE WAY WE BEHAVE - By answering a specific Business Question - By being the right metric to track at the right time


Bad Metrics

Most importantly:

Bad metrics = The wrong metric to track at the wrong time


Types of Metrics: What to Consider

1.  Qualitative vs. Quantitative

2.  Vanity vs. Actionable

3.  Exploratory vs. Reporting

4.  Leading vs. Lagging

5.  Correlated vs. Causal


Metrics ‘Tricks’ for Ninjas

1.  Segmentation

2.  Cohort Analysis

3.  A/B Testing

4.  Multivariate Analysis


Segmentation

Segment: A group that shares a common characteristic.

E.g.: -  Users who run Chrome-  Customers with Premium Subscription-  Users by geographic region/ country

What makes sense for your business? Investigate.


Cohort Analysis

Cohort Analysis: Comparing similar groups of users over time E.g.: % of users who signed up after visiting your site, grouped by # weeks.


A/B Testing

A/B Testing: Comparing results of changing one element of a webpage while keeping all other elements equal. OR: Comparing results of multiple completely different versions to get a general idea of what type of page to go with (Landing page? Marketing page? Infinite scroll?)

E.g.: Sign up button stating “Sign Up Today” for 50% of users, and “Subscribe Now” for 50%.


Multivariate Testing

Multivariate Testing: Comparing results of changing multiple elements of a webpage & analyzing the effect of the different elements’ combinations.

E.g.:

MEASURING: FUNNELS, PIRATES, & LEAN EVERYTHING


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What’s a Conversion Funnel?


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Pirate Metrics* (AARRR!)


Acquisition

Activation

Retention

Referral

Revenue

$$$*Pirate Metrics, coined by Dave McClure@davemcclure

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Conversion Funnel: Acquisition


Acquisition:

How you get users/ customers to know about you or to come to your site. Marketing Channels (SEO, Email, Biz Dev, Affiliates, Direct, Social Media,..)

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Conversion Funnel: Activation


Activation:

Getting users to create an account, sign up, or subscribe.

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Conversion Funnel: Retention


Retention:

Getting users with an account to come back/ interact/ be active on your site or with your product.

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Conversion Funnel: Revenue


Revenue:

Making $$$ off of active users

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Conversion Funnel: Referral


Referral:

Getting active users to refer others to your product/ site.

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Mapping Exercise


Acquisition

Activation

Retention

Referral

Revenue

$$$

# VisitsTime since last visitCompleted onboarding processForwarded newsletterChurnShopping cart sizeConversion rateViral coefficientUser content createdStayed on site > 10 s, clicked 3X

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Mapping: An Example


YOUR Funnel

Stage User State/ Activity Goal Conversion % Actual Conversion %

Acquisition Visit YourHomepage.com homepage 100%

AcquisitionStays on YourHomepage.com (Min. 10 seconds, 3+ clicks) 75%

ActivationIdeal 1st Visit (3+ pages, 15+ seconds, 5+ clicks) 66%

Activation Sign Up for Account 50%

Retention Opens Email & Clicks links 45%

RetentionRepeat Visits: (5+ visitis in first 30 days) 40%

Revenue User subscribes to service 25%

Referral User shares invite to subscribe with social network 10%

Referral User forwards newsletter to others 5%

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Conversion: Measure Exercise


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Measure conversion % at every step

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Conversion Funnel: Optimize


Optimize for CONVERSION at each step: 1) Look for:–  Largest volume–  Lowest cost–  Best performance

2) A/B Test A LOT–  Validately–  Optimizely–  Unbounce

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Let’s Optimize


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Referral (PR, Guest blog, ..) Social (FB, Twitter, LinkedIn)Email (Email campaigns)Paid Ads

Landing pageUXMktng copyProd Features

System triggersEvent-based emails/alerts Valuable content

Rev ModelAdsPrice

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Lean Analytics


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Lean Startup


Lean Analytics

•  What needs to improve?

•  Create an experiment

•  Run the experiment

•  Decide what to do

Goal: Avoid building something NOBODY WANTS.

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The One Metric That Matters


OMTM: The one metric you will focus on above everything else, derived from your current stage and biggest risk.

Early on, the OMTM creates focus around optimizing the one metric that will make the most difference.

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The Lean Analytics Cycle



Case Study: AirBnB PhotographyMetric: # nights bookedHypothesis: Better pictures -> More bookingsMVP caused 2-3X increase in bookings


AirBnB’s Lean Analytics Cycle


Case Study: High Score House

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Remember This? A Case Study


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XYZ’s OMTM: Churn


Churn: % of people who abandon service over time. XYZ was looking at # of subscriptions, but didn’t pay attention to churn.

Qualitative analytics showed people didn’t use service enough times within a month to want a subscription.

Changed to per transaction payment, revenues increased.

Q&A

Hala Saleh

startup metrics: learn how to measure & drive your startup

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