Startup Metrics for Pirates (Sept 2012)

Download Startup Metrics for Pirates (Sept 2012)

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slides from my Startup Metrics for Pirates talk @ GeeksOnaPlane Zagreb event (Croatia, Sept 2012) #GOAP #AARRR

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<ul><li> Startup Metrics 4 Pirates! AARRR!GeeksOnaPlane 2012 Zagreb, Croatia Sept 2012 - #GOAP #AARRR Dave McClure @DaveMcClure http://500.co http://500hats.typepad.com http://slideshare.net/dmc500hats </li> <li> WARNING: </li> <li> WARNING!!!this deck is guaranteed to offend,provide tragically incorrect advice, and perhaps get you arrested. Fucking Deal with it. </li> <li> Dave McClure Developer, Entrepreneur, Marketer, Investor, GEEK!00s &amp; 10s: Investor: Founders Fund, Facebook fbFund, 500 Startups Companies: Mint.com, SlideShare, Twilio, WildFire, SendGrid Marketing: PayPal, Simply Hired, Mint.com, OReilly Media Speaker: Lean Startup, Web 2.0, Stanford/Facebook80s &amp; 90s: Entrepreneur: Founder/CEO Aslan Computing (acqd) Developer: Windows / SQL DB consultant (Intel, MSFT) Engineer: Johns Hopkins88, BS Eng / Applied Math </li> <li> 500 StartupsSeed Fund &amp; Accelerator (350+ companies, 20+ countries) </li> <li> [ This Talk ] </li> <li> Topics Basic Concepts of Startup Metrics 4 Pirates 3 Steps to AARRR: Product, Market, Revenue Constructing MVP: Just ONE Feature? Design (UX) &amp; Distribution (MKTG) Winning: Market, Revenue, Profit? </li> <li> Key Concepts MVP = F(Customer, Problem, Time or $$$) PMF = F(Customer, Solution, Alternatives) AUX = F(Customer, Design/UX, Metrics) ACQ = F(Customer, Campaign, Vol, Cost, Conv) WIN! = F(Customer, Usage, Dist, Revenue) </li> <li> Geek Renaissance Tech Innovation Finance Innovation Design Innovation Social Innovation Global Innovation </li> <li> Platforms 2.0Search, Social, Mobile </li> <li> Whats a Platform?Successful Pla,orms have 3 Things: Features 1) Features 2) Users 3) Money Growth Prot Awesome Protable Users . . Growth Money </li> <li> Distribution PlatformsCustomer Reach: 100M+ Search: Google (SEO/SEM) Social: Facebook, Twitter, Zynga, LinkedIn Mobile: Apple (iPhone, iPad), Android Media: YouTube (Video), Blogs, Photos Comm: Email, Chat, SMS, Voice </li> <li> DO Marketing! (Its Not Evil) Marketing is Both Qualitative + Quantitative Qualitative: Create Emotion, Drive Action Quantitative: Measure Results of Action Design (UX) &amp; Distribution (MKTG) Matter Volume (#), Cost ($), Conversion (%) </li> <li> [ Interesting Shit. ] </li> <li> Read Geoffrey MillerSex + Evolution + Consumer Mktg = Awesome Sauce </li> <li> More Great Shit. Psychology + Comics </li> <li> [The Lean Startup][Startup Metrics 4 Pirates] </li> <li> Just Gimme the GOOD Metrics. Users, Pages, Clicks, Emails, $$$...? Q: Which of these is best? How do you know? 1,000,000 one-time, unregistered unique visitors 500,000 visitors who view 2+ pages / stay 10+ secthegood 200,000 visitors who clicked on a link or buttonstuff. 20,000 registered users w/ email address 2,000 passionate fans who refer 5+ users / mo. 1,000 monthly subscribers @ $5/mo </li> <li> The Lean Startup Talk to Customers; Discover Problems Progress Features (Less = More) Fast, Frequent Iteration (+ Feedback Loop) Measure Conversion; Compare 2+ Options Focus on Product/Market Fit (dont launch b4) Keep it Simple &amp; Actionable </li> <li> Discover Customers(Steve Blank, SteveBlank.com) </li> <li> Iterate, Dammit.(Eric Ries, StartupLessonsLearned.com) IDEAS LEARN BUILD DATA CODE MEASURE </li> <li> Product/Market Fit b4 Launch (Sean Ellis, Startup-Marketing.com) Growth Transition to Growth Product/Market FitStartup-Marketing.com </li> <li> AARRR!: 5-Step Startup Metrics Model SEO Campaigns, SEM PR Contests Biz Social Networks Dev Blogs Affiliates Apps &amp; Direct, Tel, Widgets Email TV Domains ACQUISITION Viral Loops Emails &amp; Alerts Homepage / Emails &amp; widgets Landing Page Product Aliates, Blogs, RSS, nNews Feeds ntio Features Contests R e te Ads, Lead Gen, Biz Dev System Events &amp; Subscriptions, Time-based Features ECommerce Website.com </li> <li> Startup Metrics for Pirates Acquisition: users come to site from various channels Activation: users enjoy 1st visit: "happy experience Retention: users come back, visit site multiple times Referral: users like product enough to refer others Revenue: users conduct some monetization behavior AARRR! (note: If youre in a hurry, Google Startup Metrics &amp; watch 5m video) </li> <li> One Step at a Time.1. Make a Good Product: Activation &amp; Retention2. Market the Product: Acquisition &amp; Referral3. Make Money: Revenue &amp; ProfitabilityYou probably cant save your Ass and your Faceat the same time so choose carefully. DMC </li> <li> Startup ChallengesStartups have problems in 3 key areas: Management: Set Priorities, Define Key Metrics Product: Build Right Features. Measure, Iterate. Marketing: Distribution, Distribution, Distribution. (Search, Social, Mobile) </li> <li> Key Concepts MVP = F(Customer, Problem, Time or $$$) PMF = F(Customer, Solution, Alternatives) AUX = F(Customer, Design/UX, Metrics) ACQ = F(Customer, Campaign, Vol, Cost, Conv) WIN! = F(Customer, Usage, Dist, Revenue) </li> <li> [ Constructing MVP ] </li> <li> Role: Founder / CEOQ: Which Customers? Problems? Metrics? Why?A: Focus on Critical Few Actionable Metrics (if you dont use the metric to make a decision, its not actionable) Hypothesize Customer Lifecycle Target ~3-5 Conversion Events (tip: Less = More) Test, Measure, Iterate to Improve </li> <li> Optimize 4 Happiness (both User + Business) $$$ Define States of User + Business Value Prioritize (Estimate) Relative Value of Each State Move Users: Lower Value -&gt; Higher Value Optimize for User Happiness + Business $$$ Achieve High Cust Value + Low ACQ$ @ Scale </li> <li> What is Minimum Viable Product?MVP = F(Customer, Problem, Time or $$$) Focus on CUSTOMER Qualitative Discovery, Quantitative Validation Get to know habits, problems, desires (FUN MATTERS) what causes pain? what causes pleasure? Define 1-5 TESTABLE Conversion Metrics of Value Attention/Usage (session time, clicks) Customer Data (email, connect, profile) - Revenue (direct or indirect) - Retention (visits over time, cohort behavior) - Referral (users evangelize to other users) Note: Paid Solutions drive FOCUS (&amp; pay rent) </li> <li> Example Conversion Metrics (note: *not* actuals your mileage may vary) Stage Conversion Status Conv. Est. Value % (*not* cost)Acquisition Visitors -&gt; Site/Widget/Landing Page 60% $.05 (2+ pages, 10+ sec, 1+ clicks = dont abandon)Activation Happy 1st Visit; Usage/Signup 15% $.25 (clicks/time/pages, email/profile reg, feature usage)Retention Users Come Back; Multiple Visits 5% $1 (1-3x visits/mo; email/feed open rate / CTR) Referral Users Refer Others 1% $5 (cust sat &gt;=8; viral K factor &gt; 1; ) Revenue Users Pay / Generate $$$ 2% $50 (first txn, break-even, target profitability) </li> <li> KILL A FEATURE. Something Sucks. Find It. KILL It. STOP ADDING FEATURES. Find the ONE THING that users LOVE. How to figure out? TAKE. SHIT. AWAY. When they SCREAM, youve FOUND it. Then Bring it Back Only Better. Tip: KILL a Feature Every Week. </li> <li> [ Getting 2 PMF ] </li> <li> Role: Product / Eng / DesignQ: What Features to Build? Why? When are you Done?A: Easy-to-Find, Fun/Useful, Unique Features that Increase Conversion (stop iterating when increase decelerates) Wireframes = Conversion Steps Measure, A/B Test, Iterate FAST (daily/weekly) Optimize for Conversion Improvement 80% on existing feature optimization 20% on new feature development </li> <li> What is Product/Market Fit?PMF = F(Customer, Solution, Alternatives*) Product / Market Fit occurs when: Customers like your stuff better than other options Not static, Not optimal just Local Max 4 F(customers, solution, time) make sure youre moving in optimal direction 2 local max Q: what competitive solutions are available? that your customers know about? how are you diff/same? in ways that people care about? (will pay for) KILL a FEATURE regularly (or rotate 1% tests) Q: what is MOST $ cust pay 4 LEAST func MVP relative 2 BEST alt? NICHE 2 WIN: RE-define cust + DIFFerentiated features </li> <li> Better or Different. Funny! Shocking !!!Accepted Not Funny. </li> <li> [ Testing 4 AUX ] </li> <li> Discover Meaning Why Should Users CARE About Your Product?Kathy Sierra:CreatingPassionateUsers </li> <li> Discover Meaning Keywords, Images, Call-to-ActionTop 10 - 100 words Call-to-Action Your Brand / Products Words Customer Needs / Benefits Images Competitors Brand / Products Context Semantic Equivalents Button/Link Misspellings EmotionRelevant images Result People Positive? Products Negative? Problems Neutral (= Death) Solutions A/B test &amp; Iterate </li> <li> How 2 Tell if Design/UX is Good?AUX = F(Customer, Design/UX, Metrics) Dont "LAUNCH" Until Your Product Doesnt Suck. In fact, Stop Thinking about it as a Launch its Continuous Define Metrics, Measurability for Design / UX Focus on Psychology of User Relative to Competitive Alternatives (that your customers know about) Keep Testing 4 Awesomeness! (Q: does it Rock Yet? ) RAMP Mktg &amp; $$$ AFTER its clear your MVP is: Functional = useful for &gt;1 customers Differentiated = better than other st...</li></ul>