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Top 7 Biggest Data Rules
to Experience Massive Growth
Hi. My name is Justin Lawrence.
•CEO @ Closing Docket•CEO @ Osteka•Creative Director @ Lawrence Web Development•CTO @ Campfire Development•CTO @ Want• JavaScript Developer @ STR
Lover of coffee, code, design, and data.
What is Data and
Who Cares?
• Data is like your therapist:• It lets you know if you’re crazy.• It lets you know if you’re a genius.
• Data forces you to honestly accept the facts:• You can’t pretend everything is okay when “percentage of
repeat customers” is 0%.• It lets you see that what you like to do may be having zero
impact on what matters.• Data allows you drive with your eyes open:• You can plan ahead.• You can adjust when needed.• You can be a trustworthy partner to investors and team
members.
1. Find One Metric
and Optimize It
• This gives you incredible focus.• Talk about it every single day. Email it, text, it, put it on
a sign.• Optimizing one metric is doable. • If you can’t: only having one eliminates excuses.• If you can: you can move on to other key metrics.
• It helps you understand your business better.• What is my engine of growth?• What is my most important number?• What affects the needle?• Who can I trust to actually stick to the plan?• What metric/number/strategy is holding me back?
2. Learn to Recognize
a Good Metric
• My brother has two kids. At least one of them is a girl. What is the likelihood that the other kid is a boy?
• We are instinctively bad at data.
1: Boy2: Boy
1: Boy2: Girl
1: Girl2: Boy
1: Girl2: Girl
• A metric should be:• Understandable:
• The slowest team member should be able understand it.• Bad: we had 500 users sign up this week.• Good: our user base grew by 7% last week.
• Comparative: • Able to compare to last month, another company, etc.• Bad: this ad campaign added 200 users.• Good: our Facebook campaign was 50% less effective than our
identical campaign on Twitter.• Behavior changing:
• It has to trigger a clear action.• Bad: 200 people walk into our store yesterday.• Good: 80% of the people who walked into our store yesterday were
repeat customers.
3. Know YourBaseline
• Know what the standard is for your industry and your competition. • If you are falling behind: you’ll know to keep working on it.• If you’re ahead, you can know to focus on something else:
maybe something that is more important.• If I am the Marriot downtown, if I have an occupancy of
90% - is that good?• Depends!
• Know if the metric supplies the complete picture.• Know what the “standard” is and try and understand your competition.• Know about external factors affecting other people in your industry.
4. Understand Local
VersusGlobal Max
• Why are Nigerian spammers so bad at spelling?• Turns out, this allows them to rope in more of their ideal
“customer” and less of more skeptical people, (who won’t “buy” anyway).
• My friend’s company has 10,000 Twitter followers. Is this good?• Depends!
• If they are tuned in and actively participating in his business: yes!• If they are just people he followed and they followed him back: no!
• In fact: it’s worse to have 10,000 uninterested people in your network than 10 interested people in your network.
• Avoid “vanity” metrics: look good, but either don’t help – or hurt you.
5.Understand Segments
VersusCohorts
• Segment: users grouped by factor. • From Nashville.• Bought more than $50 of stuff.
• Cohort: users grouped by time.• Joined in May.• Joined during yesterday’s ad campaign.
• Why these matter:• Segments: Circle of Moms• Cohorts: can water down data, make successful look
unsuccessful, etc.
6.Understand Leading
VersusLagging Metrics
• What is a lagging metric?• Your sales.• You had a lot of shares on some content you put out.• Percentage of good reviews on your app.
• What is a leading metric?• Your pipeline.• Competition just launched a ad campaign.• You just launched a new ad campaign.
• Leading can let you see the future.• Can you control it?
7.Understand Causal
VersusLeading
• If adding 7 friends on Facebook in the first 10 days of creating an account made you a committed user, how could you use this?• If metric A very often precedes metric B, try and see if
optimizing metric A makes metric B go up.• Use both gut instinct and data to run experiments.• Gut instinct: Airbnb.• Data: Twitter.
Where to StartToday
• Start taking your to-do list and turn it into experiments.• Each experiment needs have:• A hypothesis:
• “If we had an inline form on the homepage more users would sign up.”• A test:
• “Implement an MVP of the new feature and measure it.”• A “Success” scenario:
• “We get 5% more users.” (Always use percentages.)• An “If we succeed” scenario:
• “If this succeeds, we will use inline forms as much as possible.”• A “If we fail” scenario:
• “If this fails, will make a rule of not investing the extra work required to use inline forms.”
• A timeline:• “Two weeks”
• Use your experiments to …• … help choose which metrics you should watch.• … inform you when to implement deepening degrees of analytics.• … guide what items on your to-do list to cut.• … protect against retro-active “successes” that were failures.• … empower every idea to be a success by learning from them all.• … defend “bad” ideas by allowing them to succeed.• … kill “great” ideas by enabling them to fail.• … address team members who want to work non-essential
activities.• … improve team morale by having proof of progress.• … impress investors about your data-driven approach.• … increase discussion about what the “core” business is.• … encourage everyone on your team to be data-focused.• … understand if your company needs to pivot or persevere.
