Upload
gamele-ventures
View
15
Download
0
Tags:
Embed Size (px)
Citation preview
Startup Metrics for PiratesAARRR!
Dave McClure, Master of 500 Hatshttp://500hats.typepad.com/
http://www.500hats.com/http://slideshare.net/dmc500hats/
AAARRgenda
• Measure Stuff. Keep It Simple.• 5 Steps. Pirates. AARRR!*• Don’t Be Teh FAIL. Conversion Matters.• Biz Model WTF? 3 Q’s for Pirates & Founders.• One Step at a Time: The Ass/Face Issue.
* with some gusto, please
Web 2.0: What’s So Special?
1. Startup Costs = Lower
2. # Users, Bandwidth = Bigger
3. Online Adv / E-Com = Still Growing
Collect Usage Metrics in Real-Time Make Decisions Based on User Behavior
Just Gimme the GOOD Metrics.Users, Pages, Clicks, Emails, $$$...?
Q: Which of these is best? How do you know?
• 1,000,000 one-time, unregistered unique visitors
• 500,000 visitors who view 2+ pages / stay 10+ sec
• 200,000 visitors who clicked on a link or button
• 20,000 registered users w/ email address
• 2,000 passionate fans who refer 5+ users / mo.
• 1,000 monthly subscribers @ $35/mo
the good stuff.
Passion vs. Precision
• “Solve a Problem” = Passion• “Optimize the Solution” = Precision
However…• “Precision” is Illusion; “data” is fuzzy• Collecting & Interpreting data takes time & effort• Keep Metrics Simple & Actionable
AARRR!: 5-Step Startup Metrics Model
Website.com
Revenue $
$$
Revenue $
$$
Biz DevBiz DevAds, Lead Gen, Subscriptions, ECommerce
Ads, Lead Gen, Subscriptions, ECommerce
ACQUISITIONACQUISITION
SEOSEOSEMSEM
Apps & WidgetsApps & Widgets
AffiliatesAffiliates
EmailEmail
PRPRBiz DevBiz Dev
Campaigns, Contests
Campaigns, Contests
Direct, Tel, TVDirect, Tel, TV
Social Networks
Social Networks
BlogsBlogs
DomainsDomains
Retention
Emails & Alerts
Emails & Alerts
System Events & Time-based
Features
System Events & Time-based
Features
Blogs, RSS, News FeedsBlogs, RSS, News Feeds
Startup Metrics for Pirates
• Acquisition: users come to site from various channels• Activation: users enjoy 1st visit: "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!
AARRR!
Don’t Be Teh FAIL.
Business Plans are BULLSHIT Revenue Projections are Hockey Stick Delusions Features Don’t Matter… Usability + [Measured] Conversion Matters Offline PR, “Big-Bang” Launches are Stupid & Expensive Investors Don’t Know Your Business Any Better Than You Do
FAIL.
Be Bold. Be Humble.
Stuff That Matters:• Passion for Problem/Solution + Hypothesis of Customer Lifecycle
• 1-page Business Model: Prioritized List of (Users + Conversions)
• Critical, Few, Actionable Metrics + Dashboard of Measured User Behavior
• 1-pg Marketing Plan: (Channels + Campaigns) * (Volume, Cost, Conv %)
• Velocity of (Product Execution + Cycle Time of Testing) * Iteration
20% Inspiration + 80% Perspiration Long-term: Audacity + Creative Inspiration Short-term: Humility + Analytic Rigor
FTW!
Q: What’s 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
Role: Founder/CEO
Q: Which Metrics? Why?
A: Focus on Critical Few Actionable Metrics(
if you don’t use the metric to make a decision, it’s 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 ?
Role: Product / Engineering
Q: What Features to Build? Why?
A: Easy-to-Find, Fun, Useful, Unique Features that
Increase Conversion
• Wireframes = Conversion Steps• Measure, A/B Test, Iterate FAST (daily/weekly)• Optimize for Conversion Improvement
– 80% on existing feature optimization– 20% on new feature development
Example Conversion Metrics(note: *not* actuals… your mileage may vary)
Stage Conversion Status Conv.
%
Est. Value
(*not* cost)
Acquisition Visitors -> Site/Widget/Landing Page
(2+ pages, 10+ sec, 1+ clicks = don’t abandon)
60% $.05
Activation “Happy” 1st Visit; Usage/Signup
(clicks/time/pages, email/profile reg, feature usage)
15% $.25
Retention Users Come Back; Multiple Visits
(1-3x visits/mo; email/feed open rate / CTR)
5% $1
Referral Users Refer Others
(cust sat >=8; viral K factor > 1; )
1% $5
Revenue Users Pay / Generate $$$
(first txn, break-even, target profitability)
2% $10
Role: Marketing / Sales
Q: What channels? Which users? Why?A: High Volume (#), Low Cost ($), High Conv (%)
• Design & Test Multiple Marketing Channels + Campaigns• Select & Focus on Best-Performing Channels & Themes• Optimize for conversion to target CTAs, not just site/landing page• Match/Drive channel cost to/below revenue potential
• Low-Hanging Fruit: – Blogs– SEO/SEM– Landing Pages– Automated Emails
Example Marketing Channelsdisclaimer: estimates of vol, cost/user, time & effort are subjective – actual costs are dependent on your specific business
One Step at a Time.
1. Make a Good Product: Activation & Retention
2. Market the Product: Acquisition & Referral
3. Make Money: Revenue & Profitability
“You probably can’t save your Ass and your Face at the same time… choose carefully.” – me
Links & Resources
Additional References:
• “Influence: The Psychology of Persuasion”, Robert Cialdini (book)
• “Putting the Fun in Functional”, Amy Jo Kim (etech 2006 preso)
• “Futuristic Play”, Andrew Chen (blog)
• “Don’t Make Me Think”, Steve Krug (book)
• “A Theory of Fun”, Raph Koster (book, website)
• “Designing for the Social Web”, Joshua Porter (book, website)
STARTonomics Sessions
• AARRR!• Product 101: Killer Apps• Startup Scalability• Fun => Functional
• Designr ❤ Developr
• Sit, Stay, Click! = Activation & Retention
• Internet Marketing 101• SEO Kung Fu• Social Media, Social Objects• Arch Viral: Loops & Apps• Getting PAID.• Customer Service = Hot Sexy• Funding Secret$