Startup Metrics: Learn How to Measure & Drive Your Startup
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This document discusses startup metrics and how to measure key metrics for a startup. It begins by explaining the importance of identifying, measuring, and using metrics to drive your startup forward. It then discusses different types of metrics like qualitative vs quantitative, vanity vs actionable, and leading vs lagging indicators. Specific metrics frameworks like the conversion funnel and "Pirate Metrics" (AARRR) are explained. Methods for analyzing metrics like segmentation, cohort analysis, A/B testing, and multivariate testing are also covered. The document emphasizes the importance of measuring the right metrics at each stage of growth and using lean analytics and constant experimentation to optimize performance.
Startup Metrics: Learn How to Measure & Drive Your Startup
- 1. Startup Metrics: Identify, Measure, & Drive Your Startup Hala Saleh www.27sprints.com | @HalaSaleh1
- 2. 2015 Hala Saleh | @HalaSaleh1 | 27Sprints • <<Name>> • I work at <<Startup, Not-Startup>> • The top 3 things I want to learn about Startup Metrics are: ______________________________ _________________________________________ _________________________________________
- 3. 3 10 76 231 567 819 0 100 200 300 400 500 600 700 800 900 Month1 Month2 Month3 Month4 Month5 # Subscrip+ons What Does Progress Look Like? 2015 Hala Saleh | @HalaSaleh1 | 27Sprints
- 4. 100% OF US LIE TO OURSELVES 4 2015 Hala Saleh | @HalaSaleh1 | 27Sprints
- 5. 100% of us lie to ourselves 5 “We’re killing it!” “The market isn’t ready.” “Our user base has increased 100% 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.” 2015 Hala Saleh | @HalaSaleh1 | 27Sprints
- 6. PDCA: TO IMPROVE WE MUST MEASURE 2015 Hala Saleh | @HalaSaleh1 | 27Sprints
- 7. 2015 Hala Saleh | @HalaSaleh1 | 27Sprints Plan -> Do -> Check -> Act
- 8. METRICS: THE GOOD, THE BAD, & THE REST 2015 Hala Saleh | @HalaSaleh1 | 27Sprints
- 9. 2015 Hala Saleh | @HalaSaleh1 | 27Sprints Good Metrics 1. 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
- 10. 2015 Hala Saleh | @HalaSaleh1 | 27Sprints Bad Metrics Most importantly: Bad metrics = The wrong metric to track at the wrong time
- 11. 2015 Hala Saleh | @HalaSaleh1 | 27Sprints 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
- 12. 2015 Hala Saleh | @HalaSaleh1 | 27Sprints Metrics ‘Tricks’ for Ninjas 1. Segmentation 2. Cohort Analysis 3. A/B Testing 4. Multivariate Analysis
- 13. 2015 Hala Saleh | @HalaSaleh1 | 27Sprints 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.
- 14. 2015 Hala Saleh | @HalaSaleh1 | 27Sprints 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.
- 15. 2015 Hala Saleh | @HalaSaleh1 | 27Sprints 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%.
- 16. 2015 Hala Saleh | @HalaSaleh1 | 27Sprints Multivariate Testing Multivariate Testing: Comparing results of changing multiple elements of a webpage & analyzing the effect of the different elements’ combinations. E.g.:
- 17. MEASURING: FUNNELS, PIRATES, & LEAN EVERYTHING 2015 Hala Saleh | @HalaSaleh1 | 27Sprints
- 18. 18 What’s a Conversion Funnel? 2015 Hala Saleh | @HalaSaleh1 | 27Sprints
- 19. 19 Pirate Metrics* (AARRR!) 2015 Hala Saleh | @HalaSaleh1 | 27Sprints Acquisition Activation Retention Referral Revenue $$$*Pirate Metrics, coined by Dave McClure @davemcclure
- 20. 20 Conversion Funnel: Acquisition 2015 Hala Saleh | @HalaSaleh1 | 27Sprints Acquisition: How you get users/ customers to know about you or to come to your site. Marketing Channels (SEO, Email, Biz Dev, Affiliates, Direct, Social Media,..)
- 21. 21 Conversion Funnel: Activation 2015 Hala Saleh | @HalaSaleh1 | 27Sprints Activation: Getting users to create an account, sign up, or subscribe.
- 22. 22 Conversion Funnel: Retention 2015 Hala Saleh | @HalaSaleh1 | 27Sprints Retention: Getting users with an account to come back/ interact/ be active on your site or with your product.
- 23. 23 Conversion Funnel: Revenue 2015 Hala Saleh | @HalaSaleh1 | 27Sprints Revenue: Making $$$ off of active users
- 24. 24 Conversion Funnel: Referral 2015 Hala Saleh | @HalaSaleh1 | 27Sprints Referral: Getting active users to refer others to your product/ site.
- 25. 25 Mapping Exercise 2015 Hala Saleh | @HalaSaleh1 | 27Sprints Acquisition Activation Retention Referral Revenue $$$ # Visits Time since last visit Completed onboarding process Forwarded newsletter Churn Shopping cart size Conversion rate Viral coefficient User content created Stayed on site > 10 s, clicked 3X
- 26. 26 Mapping: An Example 2015 Hala Saleh | @HalaSaleh1 | 27Sprints YOUR Funnel Stage User State/ Activity Goal Conversion % Actual Conversion % Acquisition Visit YourHomepage.com homepage 100% Acquisition Stays on YourHomepage.com (Min. 10 seconds, 3+ clicks) 75% Activation Ideal 1st Visit (3+ pages, 15+ seconds, 5+ clicks) 66% Activation Sign Up for Account 50% Retention Opens Email & Clicks links 45% Retention Repeat 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%
- 27. 27 Conversion: Measure Exercise 2015 Hala Saleh | @HalaSaleh1 | 27Sprints 0 100,000 200,000 300,000 400,000 500,000 600,000 700,000 AcquisiAon AcAvaAon RetenAon Revenue Measure conversion % at every step
- 28. 28 Conversion Funnel: Optimize 2015 Hala Saleh | @HalaSaleh1 | 27Sprints Optimize for CONVERSION at each step: 1) Look for: – Largest volume – Lowest cost – Best performance 2) A/B Test A LOT – Validately – Optimizely – Unbounce
- 29. 29 Let’s Optimize 2015 Hala Saleh | @HalaSaleh1 | 27Sprints 0 100,000 200,000 300,000 400,000 500,000 600,000 700,000 AcquisiAon AcAvaAon RetenAon Revenue Referral (PR, Guest blog, ..) Social (FB, Twitter, LinkedIn) Email (Email campaigns) Paid Ads Landing page UX Mktng copy Prod Features System triggers Event-based emails/alerts Valuable content Rev Model Ads Price
- 30. 30 Lean Analytics 2015 Hala Saleh | @HalaSaleh1 | 27Sprints
- 31. 31 Lean Startup 2015 Hala Saleh | @HalaSaleh1 | 27Sprints Lean Analytics • What needs to improve? • Create an experiment • Run the experiment • Decide what to do Goal: Avoid building something NOBODY WANTS.
- 32. 32 The One Metric That Matters 2015 Hala Saleh | @HalaSaleh1 | 27Sprints 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.
- 33. 33 The Lean Analytics Cycle 2015 Hala Saleh | @HalaSaleh1 | 27Sprints
- 34. 2015 Hala Saleh | @HalaSaleh1 | 27Sprints Case Study: AirBnB Photography Metric: # nights booked Hypothesis: Better pictures -> More bookings MVP caused 2-3X increase in bookings
- 35. 2015 Hala Saleh | @HalaSaleh1 | 27Sprints AirBnB’s Lean Analytics Cycle
- 36. 2015 Hala Saleh | @HalaSaleh1 | 27Sprints Case Study: High Score House
- 37. 37 10 76 231 567 819 0 100 200 300 400 500 600 700 800 900 Month1 Month2 Month3 Month4 Month5 XYZ Company: # Subscrip+ons Remember This? A Case Study 2015 Hala Saleh | @HalaSaleh1 | 27Sprints
- 38. 38 XYZ’s OMTM: Churn 2015 Hala Saleh | @HalaSaleh1 | 27Sprints 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.
- 39. Q&A Hala Saleh