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8
Make Decision
Opinions are like assholes.
Everybody's got one and
everyone thinks everyone
else's stinks
Let the number speak.
“
Nature of Metrics
- Quantifiable
- Measurable- Can be recorded an analyse
QuestionIs “weight” a metrics?
Nature of Metrics
- Quantity (How Many): No. of Downloads, Revenue, Daily Active Users (DAU)
- Quality (How well): Click-thru-rate (CTR), Activation Rate, Margin
17
Visits Conversion per Visit Avg Order ValueX X Revenue=
VCAR• E-commerce:
Business level metrics: E-Commerce
18
Business level metrics: Digital Media
Visits
CPM (Yield)No. of Ad Units per
PageX X
Revenue=
PAYR• Digital Media:
1,000
Avg Page/VisitX
Pageview
Unit economics
Business model (revenue and cost) for a single customer
Examples
ARPU - Average Revenue Per User
LTV - Lifetime value
CAC - Customer acquisition cost
Mark is considering to acquire one of these messenger app: Whatsapp, Cubie, Snapchat. As Head of M&A you can ask these companies for 3 metrics. Which would you choose?
Exercise
A. No. of downloadB. ValuationC. No. of messages per user per monthD. No. of messages handled totalE. Monthly revenueF. Active user growth rate (monthly / quarterly / YoY)G. No. of monthly active users
Read: WhatsApp vs. bull-shit metricsA way to think about Whatsapp staggering price
Product Metrics
Product Level Metrics tie directly with the product; it includes everything that relates to- Users- Usage- Core Product Value
24
Button Click-Thru-Rate (CTR)
No. of Downloads
Daily Active User (DAU)Unique Visitors (UV)Page Views (PV) Monthly Active Users (MAU)
Retention Rate
Bounce Rate
Session LengthDownload-to-Activation (%)
DAU/MAU
Product Metrics examples
2nd Day Retention Rate
Message Sent per User per Day
Total Monthly Post per Month
Sell-thru-rate
Answers to -
Is our product delivering core product value?
Are our users experiencing our core product value?
Be-careful with numbers
Our app is opened 3,000 times per week. Lots of users like us!
QuestionWhat’s wrong with this statement?
Exercise
You are product manager of mobile marketplace for 2nd goods. Your revenue model is transaction fee (%).
What are two most important core product metrics in first year?
Exercise
Phase 1:• No. of Active Users• No. of Listings
Phase 2:• Gross Merchandise Value (GMV)• Avg. time from listed to sold (hrs)
36
Metrics helps you define whats most important
For Facebook -
“Get any individual to 7 friends in 10 days”http://www.youtube.com/watch?v=raIUQP71SBU [20:45]
Chamath Palihapitiya
VP of Growth, Facebook
Marketing Metrics
Measure cost and effectiveness of your distribution channels
In the internet world - we can measure everything
40
Cost-Per-Click (CPC)
Cost-Per-Acquisition (CPA)
Return-on-Investment (ROI)
Cost-Per-Download (CPD)
Cost-Per-Milli (CPM)
Marketing Metrics examples
Return-on-Ads-Spend (ROAS)
Share-of-Voice (SOV)
Click-thru-rate (CTR)
Conversion Rate
No. of Clicks
No. of Conversion
Reach
Frequency
41
Metrics used by most US Marketers (2011)
“Digital marketers today are drowning in metrics, but they don’t know which ones are important or how to connect the dots in a meaningful way that will drive marketing performance”
Using Marketing Metrics
- What’s my impact / ROI?
- What do I learn about the channel?
- What do I learn about our (potential) users?
Exercise
You want to promote your landing page on Google, Facebook, and Yahoo.
You have SGD 10,000 budget for each channel.Pricing: CPC
How would you compare their “effectiveness”?
a16z
http://a16z.com/2015/08/21/16-metrics/16 Startup Metrics
http://a16z.com/2015/09/23/16-more-metrics/16 More Startup Metrics
The purpose of metrics
Answer questions - • Is my business healthy?• Is my marketing effort (campaign) effective?• Is my product solving my users’ problem? Delivering value?
Make decisions - how can we do better?
Set your company North Star
Defining AARRR Strategy
1) Define key events for each AARRR step
2) Define tactics that drive these events
3) Define key metrics to measure performance / results
Events Tactics Metrics
1) Define key event for each step
Open an Account
Upload first photo
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Share on FB
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2) Design tactics that drive these events
Open an Account
Upload first photo
Upload more
Share on FB
5.99 above 10GB
FB ads
Free 10GB + on boarding
auto upload photos
Easy share mechanism
5.99 above 10GB
3) Measure results: metrics
Visitor to Account Openingconversion rate (%)
Download toactivation (%)
2nd Day Retention
avg. no. of shareper user
Paid users / all users (%)
Free 10GB + on boarding
auto upload photos
Easy share mechanism
5.99 above 10GB
FB ads
Early stage: what matters most for growth?
http://startupclass.samaltman.com/ - Lecture #6: Growth [1:45][9:50]
Cohort analysis (measuring retention)
Source: http://creativetraction.com/2014/06/06/cohort-analysis-new-customers-acquisition-costs/
Post-product-market fit: how to use metrics?
http://startupclass.samaltman.com/ - Lecture #6: Growth [9:50]
North Star
North Star
• The key metric(s) set the goal, purpose, and culture of
your startup
• Let everyone in the company know what is most
important to the company, in turn affect every business
decision, product feature, resource investment, etc.