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Startup Metrics for Pirates (Startonomics Beijing, June 2009)

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Updated "Startup Metrics for Pirates" presentation, Startonomics Beijing (June 2009). Also included a few slides from Eric Ries, Lean Startup.
  • Startup Metrics for Pirates: AARRR! Startonomics Beijing Beijing, China - June 2009 Dave McClure, Founders Fund http://www.foundersfund.com/ http://500hats.typepad.com/ http://slideshare.net/dmc500hats/
  • Startup Metrics for Pirates Acquisition: users come to site from various channels Activation: users enjoy 1st visit: quot;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 & watch 5m video)
  • 50 Slides + 30 Min = Crap. The Basics Measure Stuff. Keep It Simple. 5 Steps: Startup Metrics for Pirates (AARRR!) 3 Metrics Frameworks + 3 Roles (CEO, Dev/Product, Marketing) Iterate & Optimize. Feedback Loop. (Loop. Loop.) One Step at a Time. The Ass vs. Face Issue. Appendix (we wont have time) Activation Retention Acquisition Referral Revenue
  • Dave McClure 2001-2009: Startup Investor: 500 Hats LLC, Founders Fund Tech Marketing: PayPal, Simply Hired, Mint Advisor, Angel Investor: 20+ Startups Conf. Organizer: Web 2.0, OReilly, Startonomics Stanford Visiting Lecturer: Facebook, Startup Metrics 80s & 90s: Entrepreneur: Founder/CEO Aslan Computing (acq.) Developer: Windows Apps / SQL DB Admin User Groups: E-Commerce, Internet, Client-Server Engineer: Johns Hopkins 88, BS Eng / Applied Math
  • Personal Investments (2004-2008)
  • Professional Investments (2009) FF Angel LLC Twilio 1000 Markets UserVoice Bit.ly DailyBurn
  • Web 2.0: Hell Yes, Good Times. 2. # Users, Bandwidth = Bigger. 3. Lower Startup Costs = Badder. 4. PPC, E-Com $ Growing = Uncut. Collect Usage Metrics in Real-Time Decisions Based on Measured User Behavior
  • The Startup Metrics Religion Progress Features (Less = More) Focus on User Experience Measure Conversion; Compare 2+ Options Fast, Frequent Iteration (+ Feedback Loop) Keep it Simple & Actionable
  • Minimize TOTAL time through the loop IDEAS LEARN BUILD DATA CODE MEASURE Source: Eric Ries, The Lean Startup
  • Theres much more IDEAS Learn Faster Code Faster Split Tests LEARN BUILD Unit Tests Customer Interviews Usability Tests Customer Development Continuous Integration Five Whys Root Cause Analysis Incremental Deployment Customer Advisory Board Free & Open-Source Falsifiable Hypotheses Components Product Owner Accountability Cloud Computing Customer Archetypes Cross-functional Teams DATA CODE Cluster Immune System Just-in-time Scalability Semi-autonomous Teams Refactoring Smoke Tests Developer Sandbox Minimum Viable Product Measure Faster Funnel Analysis MEASURE Split Tests Cohort Analysis Clear Product Owner Net Promoter Score Continuous Deployment Search Engine Usability Tests Marketing Real-time Monitoring Real-Time Alerting Source: Eric Ries, Customer Liaison Predictive Monitoring The Lean Startup
  • Q: Whats My Business Model? Can be one of the following: 1. Get Users (= Acquisition, Referral) 2. Drive Usage (= Activation, Retention) 3. Make Money (= Revenue*) * ideally profitable revenue Note: eventually need to turn Users/Usage -> Money
  • AARRR!: 5-Step Startup Metrics Model SEO Campaigns, SEM PR Contests Biz Social Networks Dev Blogs Affiliates Apps & Direct, Widgets Email Tel, TV AC N O T S I U Q Domains Emails & Alerts Blogs, RSS, io n News Feeds R e tent R Ads, Lead Gen, Biz Dev ev System Events & Subscriptions, Time-based ECommerce Features en ue Website.com $$ $
  • Just Gimme the GOOD Metrics. Users, Pages, Clicks, Emails, $$$...? 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+ sec the good 200,000 visitors who clicked on a link or button stuff. 20,000 registered users w/ email address 2,000 passionate fans who refer 5+ users / mo. 1,000 monthly subscribers @ $5/mo
  • 3 Core Models: biz model, conversion dashboard, mktg channels Define 1-Page Biz Model: customer segments + desired actions / behaviors Identify critical Conversion Events & Dashboard for each segment & prioritize Test & develop Marketing Channels; measure Volume (#), Cost ($), Conv (%) Optimize product & marketing using Fast Iteration Cycles & A/B Testing
  • Role: Founder/CEO Q: Which 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
  • The 1-Page Business Model (Users + Conversions + Priorities) Q1: What types of people use your website? Visitor = Average User / Buyer Contributor = Content Contributor / Seller Distributor = Passionate Fan (unpaid) / Affiliate (paid) Q2: What actions could they take to help you or them ?
  • TeachStreet Metrics v1: Eye Chart Madness
  • TeachStreet 1-Page Business Model: Teachers & Students Te a c h e r s S tu d e n ts A c t iv a t i Claim Profile Contact Teacher on Add Class View 3 Pages Re te n ti Visit 1x/mo for 3 mos Visit 1x/mo for 3 on mos Re fe rr Request Review Suggest Teacher al
  • TeachStreet: 45-day Claim Rates (Seattle, Portland)
  • Role: Product / Engineering Q: 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 featu
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