the metrics-driven startup: which metrics matter and why
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The Metrics-Driven StartupWhich Metrics Matter and Why
Hiten ShahLean LA • September 21st, 2010
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Ferrari F430 Spider
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152 miles per hour
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Most Startups Crash and Burn
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Let’s talk about what else is easy.
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Stop measuring what’s easy.
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Start measuring what matters.
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Failure attracted me to The Lean Startup
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Vanity Metrics
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Actionable Metrics
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Are the metrics you are tracking helping you make decisions?
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Example SaaS Web App
• People sign up and pay online
• They first sign up for a 7 day free trial
• Then they pay $97 per month
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What are your assumptions?
Example SaaS Web App
• People sign up and pay online
• They first sign up for a 7 day free trial
• Then they pay $97 per month
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Software as a Service Product(Assumptions)
Key Actions % of people # of people
Visit Site 100% 1000
Sign Up 10% 100
Activate 5% 50
Upgrade 1% 10
Revenue $970 per month$970 per month
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Baseline these key actions and assumptions.
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Software as a Service Product(Actual Baseline)
Key Actions % of people # of people
Visit Site 100% 1000
Sign Up 3.6% 36
Activate 1.2% 12
Upgrade 0.4% 4
Revenue $388 per month$388 per month
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What would you try to improve?
Key Actions % of people # of people
Visit Site 100% 1000
Sign Up 3.6% 36
Activate 1.2% 12
Upgrade 0.4% 4
Revenue $388 per month$388 per month
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Software as a Service Product(Video Test)
Key Actions % of people # of people
Visit Site 100% 1000
Sign Up 6.5% 65
Activate 1.8% 18
Upgrade 0.3% 3
Revenue $291 per month vs. $388 baseline :($291 per month vs. $388 baseline :(
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Get Inspired!
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Software as a Service Product(Inspired Test)
Key Actions % of people # of people
Visit Site 100% 1000
Sign Up 7.7% 77
Activate 2.8% 28
Upgrade 1.2% 12
Revenue $1164 per month vs. $388 baseline :)$1164 per month vs. $388 baseline :)
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Software as a Service Product(Compare all 3)
Key Actions Baseline Video Test Inspired Test
Visit Site 100% 100% 100%
Sign Up 3.6% 6.5% 7.7%
Activate 1.2% 1.8% 2.8%
Upgrade 0.4% 0.3% 1.2%
Revenue $388 per month
$291 per month
$1164 per month
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Crazy Egg Pricing Before
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Crazy Egg Pricing After
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Crazy Egg Pricing Results
• Before - 150 sign ups per day
• After - 15 sign ups per day
• But revenue doubled in the first month!
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Start measuring what matters.
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Questions?
Got questions? Want advice? Email Me!