how to make money from apps: pirate metrics & growth hacking
DESCRIPTION
Discover how the smartphone market is growing, wich technology trends are key and how to mesure the performance of your internet business and mobile app thanks to the pirate metrics framework. You can also find some of the greatest growth hacks of all time to enhance your creativity while developing your own projects and apps.TRANSCRIPT
@polvallssoler!
How to make money from apps: Pirate Metrics & Growth Hacks
Pol Valls Soler
@polvallssoler!
Before 2000!• Sun Servers!• Oracle DB!• Exodus Hosting!• 12-24mo dev cycle!• 6-18mo sales cycle!• <100M people online!• $1-2M seed round!• $3-5M Series A!• Sand Hill Road crawl!• Big, Fat, Dinosaur Startup!
After 2008!• AWS, Google, PayPal, FB, TW!• Cloud + Open Source SW!• Lean Startup / Startup Wknd!• 3-90d dev cycle!• SaaS / online sales!• >3B people online!• <$100K incub + <$1M seed!• $1-3M Series A!• Angel List global visibility!• Lean, Little, Cockroach Startup!
Some context: Before & After 2 Dot-Com Crashes
Source:500startups!
Daft Punk Startup: !Simpler, Faster, Cheaper, Smarter
@polvallssoler!
• LESS Capital required to build product, get to market – Dramatically reduced $$$ on servers, software, bandwidth – Crowdfunding, KickStarter, Angel List, Funders Club, etc – Cheap access to online platforms for 100M+ consumers, smallbiz, etc
• MORE Customers via ONLINE platforms (100M+ users) – Search (Google) – Social (Facebook, Twitter) – Mobile (Apple, Android) – Local (Yelp, Groupon, Living Social) – Media (YouTube, Pinterest, Instagram, Tumblr) – Comm (Email, IM/Chat, Voice, SMS, etc)
• LOTS of little bets: Accelerators, Angels, Angel List, Small Exits – Y Combinator, TechStars, 500 Startups – Funding + Co-working + Mentoring -> Design, Data, Distribution – “Fast, Cheap Fail”, network effects, quantitative + iterative investments
Source:500startups!
Some context: Changes in Tech Startups
@polvallssoler! Source: Kleiner Perkins (KPCB)!
Some context: Evolution of mobile
@polvallssoler!
@polvallssoler! Source: Kleiner Perkins (KPCB)!
Some context: Evolution of mobile
@polvallssoler! Source: Kleiner Perkins (KPCB)!
Some context: Evolution of mobile
@polvallssoler! Source: Kleiner Perkins (KPCB)!
Some context: Evolution of tablets
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@polvallssoler!
Some context: Full stack startups based on mobile
@polvallssoler!
@polvallssoler!
Some context: Full stack startups based on mobile
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@polvallssoler!
Some context: Mobile-‐Enabled Commerce Will Yield The Next $100B Startup
@polvallssoler! Source: Trinity Ventures!
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Metrics for pirates…AARRR!
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MAARRRketing for startups
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ACQUISITION !
Users come to the site; you have their attention
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ACTIVATION !
User performs some key activity that indicates a good first visit
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RETENTION!
User continues to do that key activity indicating they like your product
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REFERRAL!
User gets other users to join
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REVENUE!
User pays you
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AARRR Funnel: Customer Lifecycle / Conversion Behavior!
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@polvallssoler!
Emails &
Alerts
Blogs, Conten
t
System Events
& Time-‐
based Featur
es
Biz Dev
Ads, Lead Gen,
SubscripMons, etc
Emails &
widgets
Campaigns,
Contests
Homepage / Landin
g
Page
Product
Features
SEO SEM
Apps & Widgets
Affiliates
PR
Biz Dev Campaigns, Contests
Direct, Tel, TV
Social Networks Blogs
Domains
AARRR Funnel: Customer Lifecycle / Conversion Behavior!
@polvallssoler!
@polvallssoler!
BLOG EXAMPLE!
Acquisition - users come to the site from a search engine!
Activation - user signs up for RSS/newsletter or stays for at least 5 minutes
Retention - user reads at least one post a week or opens the newsletter
Referral - user promotes your blogs contests and drives traffic
Revenue - user buys your ebook !
@polvallssoler!
SAAS EXAMPLE!
Acquisition - user signs up for the service
Activation - user successfully makes a document
Retention - user continues to make documents. As long as they're !
successfully making documents they will continue to use the service.
Referral – Users send other users to our web, possibly with a coupon code
Revenue - yay! money! !
(Web-‐based app to convert HTML to PDF or Excel documents)
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MOBILE EXAMPLE!(Smartphone videogame)
AcquisiMon AcMvaMon RetenMon Revenue
Referral Social Share
10%
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AND…
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if CLV > CAC, then PROFIT !
@polvallssoler!
AARRR Funnel: Customer Lifecycle / Conversion Behavior!
Emails &
Alerts
Blogs, Conten
t System
Events & Tim
e-‐
based Featur
es
Biz Dev
Ads, Lead Gen,
SubscripMons, etc
Emails &
widgets
Campaigns,
Contests
Homepage / Landin
g
Page
Product
Features
SEO SEM
Apps & Widgets
Affiliates
PR
Biz Dev Campaigns, Contests
Direct, Tel, TV
Social Networks Blogs
Domains
@polvallssoler!
@polvallssoler!AARRRP!
@polvallssoler!
Example Conversion Metrics (note: your mileage may vary…)
Category User Status Conv % Est. Value Acquisition Visit Site
(or landing page, or external widget) 100% $.01
Acquisition Doesn't Abandon (views 2+ pages, stays 10+ sec, 2+ clicks)
70% $.05
Activation Happy 1st Visit (views X pages, stays Y sec, Z clicks)
30% $.25
Activation Email/Blog/RSS/Widget Signup (anything that could lead to repeat visit)
5% $1
Activation Acct Signup (includes profile data)
2% $3
Retention Email Open / RSS view -> Clickthru 3% $2 Retention Repeat Visitor
(3+ visits in first 30 days) 2% $5
Referral Refer 1+ users who visit site 2% $3 Referral Refer 1+ users who activate 1% $10 Revenue User generates minimum revenue 2% $5 Revenue User generates break-even revenue 1% $25
@polvallssoler!
Example Conversion Metrics (note: your mileage may vary…)
Category User Status Conv % Est. Value Acquisition Visit Site
(or landing page, or external widget) 100% $.01
Acquisition Doesn't Abandon (views 2+ pages, stays 10+ sec, 2+ clicks)
70% $.05
Activation Happy 1st Visit (views X pages, stays Y sec, Z clicks)
30% $.25
Activation Email/Blog/RSS/Widget Signup (anything that could lead to repeat visit)
5% $1
Activation Acct Signup (includes profile data)
2% $3
Retention Email Open / RSS view -> Clickthru 3% $2 Retention Repeat Visitor
(3+ visits in first 30 days) 2% $5
Referral Refer 1+ users who visit site 2% $3 Referral Refer 1+ users who activate 1% $10 Revenue User generates minimum revenue 2% $5 Revenue User generates break-even revenue 1% $25
@polvallssoler!
Example Conversion Metrics (note: your mileage may vary…)
Category User Status Conv % Est. Value Acquisition Visit Site
(or landing page, or external widget) 100% $.01
Acquisition Doesn't Abandon (views 2+ pages, stays 10+ sec, 2+ clicks)
70% $.05
Activation Happy 1st Visit (views X pages, stays Y sec, Z clicks)
30% $.25
Activation Email/Blog/RSS/Widget Signup (anything that could lead to repeat visit)
5% $1
Activation Acct Signup (includes profile data)
2% $3
Retention Email Open / RSS view -> Clickthru 3% $2 Retention Repeat Visitor
(3+ visits in first 30 days) 2% $5
Referral Refer 1+ users who visit site 2% $3 Referral Refer 1+ users who activate 1% $10 Revenue User generates minimum revenue 2% $5 Revenue User generates break-even revenue 1% $25
@polvallssoler!
KEY METRICS TO TRACK !
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@polvallssoler!
ACQUISITION !Key Metrics To Track:!
• Volume(#) !• Cost ($)!• Conversion (%)!!
Acquisition tips (for the top 10 - 100 words)!• Your brand / Products!• Customer needs / Benefits!• Competitor’s brand / Products (Steal traffic)!• Semantic equivalents!• Misspellings !
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ACQUISITION !
@polvallssoler!
ACQUISITION !Extra tip: Reverse Engineered App Store’s ranking algorithm
(approximation)!
AppStore Ranking = H + D + R + E + S !!H = # of installs weighted for the past few hours!!D = # of installs weighted for the past few days!!R = Reviews (star rating + number of reviews)!!E = Engagement (# of times app opened etc.) !!S = Sales ($)!
!!
@polvallssoler!
Extra tip: Reverse Engineered App Store’s ranking algorithm (approximation)!
AppStore Ranking = H + D + R + E + S !!H = # of installs weighted for the past few hours!!D = # of installs weighted for the past few days!!R = Reviews (star rating + number of reviews)!!E = Engagement (# of times app opened etc.) !!S = Sales ($)!
!!
Luck? AppStore Bot? Dark pa]ern?
ACQUISITION !
@polvallssoler!
ACQUISITION !Extra tip: How to get your first 100 users!
1) What exisMng soluMon do you believe your product is be]er than?
2) Where can you find a criMcal mass of people who use the exisMng soluMon?
3) Go there. Talk to them. Show them your product.
@polvallssoler!
ACTIVATION !Key metrics to track:!
• Pages per visit (2-3+ page views)!• Time on site (10-30+ seconds)!• Conversions (1 key feature usage)!• Clicks (3-5+ clicks)!• Bounce rate (low)!
Activation Tips:!• Less is more!• Focus on UX / Usability!• Provide incentives & call to actions!• Perform A/B tests and iterate fast!
@polvallssoler!
ACTIVATION !
@polvallssoler!
@polvallssoler!
RETENTION!Key metrics to track:!
• Source (email, RSS, affiliates…)!• Volume (Low spam rating)!• Conversions (20% open rate / CTR)!• Visitor Loyalty (1–3+ visits per month)!• Session Length!• Long customer life cycle / Low decay!• Identify fanatics and cheerleaders!
@polvallssoler!
@polvallssoler!
RETENTION!
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@polvallssoler!
RETENTION!Retention Tips:!
• Email is simple and it works!• But make Unsubscribe easy!
• 80% subject line / 20% body text!
• Actually… 99% subject line / 1% body text!
• Status / “best of” weekly/monthly emails!
• “Something happened” emails!
• Lifecycle emails @ +3, +7, +30 days !
• RSS / News feeds!
• Widgets / Embeds!
• Gamification!
• Fanatics = Virality + affiliate channels (like bloggers)!
@polvallssoler!
REFERRAL!Key metrics to track:!
Viral Growth Factor = X * Y * Z!!
!X = % of users who invite other people!!Y = average # of people that they invited!!Z = % of users who accepted an invitation!
A viral growth factor > 1 means an exponential organic user acquisition.!
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REFERRAL!
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REFERRAL!Referral Tips:!
• Personal send to friend (Email / IM)!• Social Media!• Widgets / Embeds!• Affiliates!
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@polvallssoler!
REVENUE!Key metrics to track:!
• Conversion to revenue (%)!
• Volume ($$$)!
Revenue Tips:!
• Don’t just rely on AdSense, iAd…!
• Offer something free (at least when starting out)!
• Subscription / Recurring transactions!
• Qualify your customers / Traffic for lead generation.!
• Sell somethig (physical or virtual)!
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REVENUE!
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PROFIT !
…
@polvallssoler!@polvallssoler!
@polvallssoler!
CAC (Customer Acquisition Cost) !
Take only a porMon of those salaries and expenses in the early days to give a be]er indicaMon of how
CAC will look when you are at scale.
@polvallssoler!
CLV or LTV (Customer Lifetime Value) !
if the Customer Churn rate is a monthly % or yearly %, then the Customer LifeMme will be for the same Mme period.
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CLV or LTV (Customer Lifetime Value) !
In most SaaS businesses, the gross margin % is high (above 80%), and it’s quite common to use the simpler version of
the formula that is not Gross Margin adjusted.
To truly get an accurate picture of LTV, you should take into consideraMon Gross Margin:
@polvallssoler!
a = iniMal ARPA per month ( x GM %, if you prefer) m = monthly growth in ARPA per account c = Customer Churn Rate (in months)
CLV or LTV in a More Complex Scenario (Where you expect ARPA to change over the lifespan
of the customer due to expansion revenue)
(This formula makes an assumpMon that revenue increases at a roughly fixed rate every month for the enMre lifeMme of the customer)
@polvallssoler!
if 1 < LTV/CAC < 3 if LTV/CAC < 1
LTV : CAC Ratio Awesomeness !
> 3 if
(It’s ok. As a startup, don’t worry iniMally about LTV>3*CAC)
your business model is broken!
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Tools for metrics analysis
…
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Tools for testing
…
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Less Budget, More Creativity, More Automation -> Maximize Output
Growth Hacking
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REVENUE & PROFIT !
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@polvallssoler!
REVENUE & PROFIT !
@polvallssoler!
REVENUE & PROFIT !
@polvallssoler!
REVENUE & PROFIT !
Unlock all books is the clear top revenue generator.
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ACQUISITION !
hack
Caution! Use at your own risk! This is cloaking!!
-‐> -‐>
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ACQUISITION !
1-‐ Setup domain with a WordPress news theme. 2-‐ Hire writers to rewrite news arMcles for $2 each. (Avoid copying to ensure “journalisMc quality”.) 3-‐ Start with 150 back-‐dated arMcles to show that the site has some momentum. 4-‐ Setup a nice logo and real phone number. 5-‐ Double check that the site complies with the Google webmaster guidelines. 6-‐ Submit for approval.
@polvallssoler!
Different landing pages according to traffic source!(Search Engines for SEO –> Footer vs Direct !Traffic -> No footer)!
Groupon ACQUISITION !
Caution! Use at your own risk! This is cloaking!!
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Groupon ACTIVATION & RETENTION!!
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Groupon RETENTION!!
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Groupon REFERRAL!!Sharing is in Groupon’s DNA
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Linkedin ACTIVATION !!
Gamification example:
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Linkedin RETENTION & REFERRAL!!
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Linkedin REVENUE!!
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Linkedin ACQUISITION & REFERRAL!!
This person passed away about a year ago. For the majority of her life, she ran a small hardware shop and she barely understood email, let alone LinkedIn.
From Linkedin’s People You May Know page…
(NOT THE BEST THING TO DO… people can hate you)
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Dropbox ACQUISTION !!Signup driven homepage:
before aqer
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Dropbox REFERRAL!!Sharing simplicity and availability on Multiple Devices & Platforms:
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Dropbox REFERRAL & REVENUE!!
Get more space
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Dropbox ACQUISTION & REFERRAL!!Dropbox Great Space Race!
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Dropbox REFERRAL & REVENUE!!
Dropbox growth hack in numbers…
1. September 2008: 100,000 registered users!
2. January 2010 (15 months later): 4,000,000!
3. Mostly from word-of-mouth and viral:!
• 35% of daily signups from referral program!
• 20% from shared folders, other viral features!
• Sustained 15-20%+ month-over-month growth since launch!
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Panda 4.0
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Panda 4.0 victim
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Panda 4.0 victim
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It doesn’t need to be online (initially)!
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It doesn’t need to be online (initially)!
@polvallssoler!
It doesn’t need to be online (initially)!
@polvallssoler!
@polvallssoler!
It doesn’t need to be online (initially)!
@polvallssoler!
It doesn’t need to be online (initially)! -‐ 1 Private domain (forwarded to affiliate link) -‐ made a very easy domain name -‐ $23 -‐ 1,000 copies (cut into 4 = 4,000 flyers) -‐ $40 -‐ 2 custom tshirts -‐ $50 -‐ 2 promo girls ($20/hr each x 4 hrs = 8 hours total) -‐ $160 -‐ 2 accounts on the hook up site (trial) -‐ $10 Total AdverMsing Cost = $283 Hand out all 4,000 flyers + do some heavy flir=ng
@polvallssoler!
It doesn’t need to be online (initially)! -‐ 1 Private domain (forwarded to affiliate link) -‐ made a very easy domain name -‐ $23 -‐ 1,000 copies (cut into 4 = 4,000 flyers) -‐ $40 -‐ 2 custom tshirts -‐ $50 -‐ 2 promo girls ($20/hr each x 4 hrs = 8 hours total) -‐ $160 -‐ 2 accounts on the hook up site (trial) -‐ $10 Total AdverMsing Cost = $283 Hand out all 4,000 flyers + do some heavy flir=ng Got 118 conversions (2,95% conversion rate) -‐> 118 x $45 payout = $5,310 Revenue -‐ $283 cost
= $5,027 PROFIT!
@polvallssoler!
ACQUISITION: SEO hacks !
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ACQUISITION !
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ACQUISITION & REFERRAL!
From adverMsing here…
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PS: I Love You. Get Your Free Email at Hotmail
ACQUISITION & REFERRAL!
To simply wriMng this footer on each email…
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ACQUISITION & REFERRAL!
And here are the results:
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ACQUISITION & REFERRAL (Through viral content)!
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ACQUISTION, ACTIVATION, RETENTION & REFERRAL!
ACQUISTION, ACTIVATION & RETENTION!
@polvallssoler!@polvallssoler!
@polvallssoler!
ACQUISITION & PROFIT !
@polvallssoler!
@polvallssoler!@polvallssoler!
@polvallssoler!
@polvallssoler!
REFERRAL!
@polvallssoler!
@polvallssoler!
REFERRAL!
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REFERRAL!
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REVENUE & PROFIT !
The $144,146,165 BuOon
@polvallssoler!
@polvallssoler!
REVENUE & PROFIT ! The $144,146,165 BuOon
When cabs were cash only, the average Mp was roughly 10%. Aqer the introducMon of this system, the Mp percentage jumped to 22%. Those three bu]ons resulted in $144,146,165 of addi=onal =ps per year.
@polvallssoler!
When Growth Hacking Goes Fail Hacking
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@polvallssoler!
Path Facebook blocked Path’s “Find Friends” access following spam controversy
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Path Path texts your enMre phonebook
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Glide Same…
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Tinder Same…
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Rap Genius: No SEO Genius
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Rap Genius: No SEO Genius
Rap Genius fell from around 700,000 uniques a day to around 100,000.!
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Rap Genius: No SEO Genius Google recommends a 4-step approach to fixing the problem:!1. Download a list of links to your site from Webmaster Tools.!2. Check this list for any links that violate our guidelines on linking.!
3. For any links that violate our guidelines, contact the webmaster !of that site and ask that they either remove the links or prevent them!
from passing PageRank, such as by adding a rel="nofollow" attribute.!4. Use the Disavow links tool in Webmaster Tools to disavow any links !you were unable to get removed.!
But they had a MASSIVE problem… so they had to write a scraper to!analyze 178k URLs using concurrency on a Heroku cloud. #NOTBAD!
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Facebook Fraud
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Facebook Fraud
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" "linkedin.com/in/polvallssoler!
" "slideshare.net/polvallssoler!"!
Thanks!
Reddit for spanglish geeks: zumogeek.com!iOS app for discovering people nearby: joinerapp.com!
Advising entrepreneurs at La Salle Technova Barcelona!
Pol Valls Soler !
Currently creating:!
Co-creator of:!
Moneda Catalana (Catalan Cryptocurrency): moneda.cat !Barcelona real estate agency: feelrealestate.com !