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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?
2015 Hala Saleh | @HalaSaleh1 | 27Sprints
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.”
2015 Hala Saleh | @HalaSaleh1 | 27Sprints
PDCA: TO IMPROVE WE MUST MEASURE
2015 Hala Saleh | @HalaSaleh1 | 27Sprints
2015 Hala Saleh | @HalaSaleh1 | 27Sprints
Plan -> Do -> Check -> Act
METRICS: THE GOOD, THE BAD, & THE REST
2015 Hala Saleh | @HalaSaleh1 | 27Sprints
2015 Hala Saleh | @HalaSaleh1 | 27Sprints
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
2015 Hala Saleh | @HalaSaleh1 | 27Sprints
Bad Metrics
Most importantly:
Bad metrics = The wrong metric to track at the wrong time
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
2015 Hala Saleh | @HalaSaleh1 | 27Sprints
Metrics ‘Tricks’ for Ninjas
1. Segmentation
2. Cohort Analysis
3. A/B Testing
4. Multivariate Analysis
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.
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.
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%.
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.:
MEASURING: FUNNELS, PIRATES, & LEAN EVERYTHING
2015 Hala Saleh | @HalaSaleh1 | 27Sprints
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What’s a Conversion Funnel?
2015 Hala Saleh | @HalaSaleh1 | 27Sprints
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Pirate Metrics* (AARRR!)
2015 Hala Saleh | @HalaSaleh1 | 27Sprints
Acquisition
Activation
Retention
Referral
Revenue
$$$*Pirate Metrics, coined by Dave McClure@davemcclure
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Conversion Funnel: Acquisition
2015 Hala Saleh | @HalaSaleh1 | 27Sprints
Acquisition:
How you get users/ customers to know about you or to come to your site. Marketing Channels (SEO, Email, Biz Dev, Affiliates, Direct, Social Media,..)
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Conversion Funnel: Activation
2015 Hala Saleh | @HalaSaleh1 | 27Sprints
Activation:
Getting users to create an account, sign up, or subscribe.
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Conversion Funnel: Retention
2015 Hala Saleh | @HalaSaleh1 | 27Sprints
Retention:
Getting users with an account to come back/ interact/ be active on your site or with your product.
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Conversion Funnel: Revenue
2015 Hala Saleh | @HalaSaleh1 | 27Sprints
Revenue:
Making $$$ off of active users
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Conversion Funnel: Referral
2015 Hala Saleh | @HalaSaleh1 | 27Sprints
Referral:
Getting active users to refer others to your product/ site.
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Mapping Exercise
2015 Hala Saleh | @HalaSaleh1 | 27Sprints
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
2015 Hala Saleh | @HalaSaleh1 | 27Sprints
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
2015 Hala Saleh | @HalaSaleh1 | 27Sprints
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AcquisiAon AcAvaAon RetenAon Revenue
Measure conversion % at every step
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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
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Let’s Optimize
2015 Hala Saleh | @HalaSaleh1 | 27Sprints
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AcquisiAon AcAvaAon RetenAon Revenue
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
2015 Hala Saleh | @HalaSaleh1 | 27Sprints
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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.
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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.
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The Lean Analytics Cycle
2015 Hala Saleh | @HalaSaleh1 | 27Sprints
2015 Hala Saleh | @HalaSaleh1 | 27Sprints
Case Study: AirBnB PhotographyMetric: # nights bookedHypothesis: Better pictures -> More bookingsMVP caused 2-3X increase in bookings
2015 Hala Saleh | @HalaSaleh1 | 27Sprints
AirBnB’s Lean Analytics Cycle
2015 Hala Saleh | @HalaSaleh1 | 27Sprints
Case Study: High Score House
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XYZ Company: # Subscrip+ons
Remember This? A Case Study
2015 Hala Saleh | @HalaSaleh1 | 27Sprints
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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.
Q&A
Hala Saleh
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