Lean WorkbenchFor creating and tracking metrics that matter

Chris Wiggins and Jennifer Rubinovitzchris.wiggins@columbia.edu jrubinovitz@columbia.edu

"Standard accounting is not helpful in evaluating

entrepreneurs."

- Eric Ries, "The Lean Startup" (Random House, Inc. 2011)

How can we quantify a company?

Lean Startup Feedback Loop

Business Model Canvas

www.launchpadcentral.com

Launchpad Central Metrics

www.launchpadcentral.com

What are “Lean” metrics?

What are “Lean” metrics?Stop lying to yourself.

(this and following slides inspired by “Lean Analytics”, Croll, 2011)

What are “Lean” metrics?Stop lying to yourself.

Traditional metrics are vanity metrics.

What are “Lean” metrics?Stop lying to yourself.

Traditional metrics are vanity metrics.

So, what makes a good metric?

What are “Lean” metrics?So, what makes a good metric?

What are “Lean” metrics?So, what makes a good metric?

● a good metric is comparative

What are “Lean” metrics?So, what makes a good metric?

● a good metric is comparative● a good metric is understandable

What are “Lean” metrics?So, what makes a good metric?

● a good metric is comparative● a good metric is understandable● a good metric changes the way you behave

Metric Typesqualitative: unstructured, anecdotal, revealing, hard to aggregate

quantitative: numbers and statistics

Metric Typesvanity: make you feel good, don't change how you act

actionable: change behavior by helping choose a course of action

Metric Typesexploratory: speculative and try to find unknown insights

reporting: keep you abreast of normal operations

Metric Typesleading: predictive understanding of future. better because you can act on them

lagging: explain the past

Metric Typescorrelated: metrics change together

casual: one metric causes another to change

What are “Lean” metrics?Lean metrics are actionable: They help you change your behavior by enabling to choose a course of action in the lean startup build-measure-learn feedback loop.

Lean Metrics In Practice at the New York Times

Source: New York Times 2014 Innovation Report

Source: New York Times 2014 Innovation Report

Source: New York Times 2014 Innovation Report

Source: New York Times 2014 Innovation Report

Source: New York Times 2014 Innovation Report

Source: New York Times 2014 Innovation Report

Stages of Lean Analytics1. Empathy2. Stickiness3. Virality4. Revenue5. Scale

Lean Metrics with Lean Workbench

EmpathyGet inside your target market’s head● Make sure you’re solving a problem they’d

pay for● Run surveys

EmpathyGet inside your target market’s head● Make sure you’re solving a problem they’d

pay for● Run surveys

StickinessNow that you’re creating your product focus on:● retention● engagement

StickinessNow that you’re creating your product focus on:● retention● engagement

ViralityPeople need to know about your product to buy your product.

ViralityPeople need to know about your product to buy your product.

Revenue● Prove you can make money● Project future revenue

Revenue● Prove you can make money● Project future revenue

BenchmarkingCompare these metrics with your peersEventually: also by sector, other options

Scale● Prove a market● Raise capital or bootstrap

A/B and Multivariate Testing

www.optimizely.com

A Look at a VC’s Pipeline

A Look at a VC’s Pipeline● Meetings: Average venture firm has approximately 500

face-to-face meetings each year. Only 10 percent progress from that stage.

http://venturebeat.com/2014/04/19/heres-a-look-inside-a-typical-vcs-pipeline-a-must-read-for-entrepreneurs

A Look at a VC’s Pipeline● Meetings: Average venture firm has approximately 500 face-

to-face meetings each year. Only 10 percent progress from that stage.

● Due Diligence: Do you have high rates of churn or burn? Is your product and financial model sound?

http://venturebeat.com/2014/04/19/heres-a-look-inside-a-typical-vcs-pipeline-a-must-read-for-entrepreneurs

A Look at a VC’s Pipeline● Meetings: Average venture firm has approximately 500 face-

to-face meetings each year. Only 10 percent progress from that stage.

● Due Diligence: Do you have high rates of churn or burn? Is your product and financial model sound?

● Investments: Mid-sized firms invest in ⅕ that make it past due diligence. Customer acquisition and a “magnetic” CEO matter.

http://venturebeat.com/2014/04/19/heres-a-look-inside-a-typical-vcs-pipeline-a-must-read-for-entrepreneurs

The Anatomy of a Seed Round

seed round analysis by Brendan Baker

Finding Investors

Finding Investors● Crunchbase

Finding Investors● Crunchbase● Angellist

Finding Investors● Crunchbase● Angellist● VC Matcher

Crunchbase vs AngellistCrunchbase- companies at all stages, crowdsourced data

Angellist- usually companies looking for early stage funds

Metrics For Investors

Metrics For Investors● active users

Metrics For Investors● active users● founder reputation

Metrics For Investors● active users● founder reputation● revenue potential

Metrics For Investors● active users● founder reputation● revenue potential

Metrics For Investors● active users● founder reputation● revenue potential● changes in the market that make now the

time for your startup

Lean Metrics with Lean Workbench

www.leanworkbench.com

Future Work● mentor and interview matcher● segments, cohorts, a/b testing, and

multivariate analysis

ResourcesThe Lean StartupLean AnalyticsVenture Deals: Be Smarter Than Your Lawyer and Venture Capitalist