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Are you making your product better or worse? LUKAS FITTL @lfittl spark59.com ACTIONABLE METRICS Lean Startup is trademarked by Eric Ries and used with permission. Business Model Canvas is created by Alex Osterwalder and licensed under CC-BY-SA. Friday, 29 March 2013

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About Myself & Spark59 Founded 2 tech startups, worked with many others Friday, 29 March 2013

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Friday, 29 March 2013

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“Am I making progress into the right direction?” Friday, 29 March 2013

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$$$/users/etc Time Friday, 29 March 2013

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Product/ Market Fit 1. Deliver Value 2. Accelerate Growth Friday, 29 March 2013

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Product/ Market Fit 1. Value 2. Growth Friday, 29 March 2013

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Product/Market Fit: The moment when you can consistently deliver value to the right people. Friday, 29 March 2013

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Focus on Outcome, not Tasks. Friday, 29 March 2013

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$10000 / month $2000 / month Now June 2013 ? Friday, 29 March 2013

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Break Revenue Targets, down into Unit Economics. Friday, 29 March 2013

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Dave McClure’s AARRR ACQUISITION ACTIVATION RETENTION REVENUE REFERRAL How do users find you? Do users have a reat first experience? Do users come back? How do you make money? Do users tell others? Friday, 29 March 2013

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$2000 / month ACQ ACT 20% to paid at $35 RET REV 20% stay for 1 week 8% activate 5% sign up 2 paid $70 / day 10 retained 50 activated 625 signed up 12500 unique visitors Each Day: Friday, 29 March 2013

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Cohort Analysis Friday, 29 March 2013

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Cohort: Group of people that share a common characteristic over a period of time. Friday, 29 March 2013

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Friday, 29 March 2013

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Track people, not events. Friday, 29 March 2013

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Group users by sign-up date and track their lifecycle. Friday, 29 March 2013

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Cohort Analysis for Retention Friday, 29 March 2013

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Cohort Analysis w Google Analytics http://danhilltech.tumblr.com/post/12509218078/startups-hacking-a-cohort-analysis-with-google Friday, 29 March 2013

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$10000 / month $2000 / month Now June 2013 ? Friday, 29 March 2013

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$2000 / month ACQ ACT 20% to paid at $35 RET REV 20% stay for 1 week 8% activate 5% sign up 2 paid $70 / day 10 retained 50 activated 625 signed up 12500 Unique Visitors / day Cohort of February 12th, 2013 Friday, 29 March 2013

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$2000 / month Now ACQ ACT 20% to paid at $35 RET REV 20% stay for 1 week 8% activate 5% sign up $70 / day 12500 Uniques $10000 / month June 2013 20% to paid at $35 20% stay for 1 week 20% activate 10% sign up $350 / day 12500 Uniques 2 10 50 625 10 50 250 1250 Friday, 29 March 2013

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$2000 / month Now ACQ ACT 20% to paid at $35 RET REV 20% stay for 1 week 8% activate 5% sign up $70 / day 12500 Uniques $10000 / month June 2013 20% to paid at $35 20% stay for 1 week 20% activate 10% sign up $350 / day 12500 Uniques 2 10 50 625 10 50 250 1250 Friday, 29 March 2013

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Delivering Value Friday, 29 March 2013

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Customers need to experience the value, otherwise they will leave. Friday, 29 March 2013

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ACQUISITION ACTIVATION RETENTION REVENUE REFERRAL Value Metrics How do users find you? Do users have a great first experience? Do users come back? How do you make money? Do users tell others? Friday, 29 March 2013

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Network effect vs Marketplace vs SaaS Who delivers the actual value? Critical Mass of People The Right People Your Product Friday, 29 March 2013

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ACQUISITION ACTIVATION RETENTION REVENUE REFERRAL Value Metrics How do users find you? Do users have a great first experience? Do users come back? How do you make money? Do users tell others? Friday, 29 March 2013

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Feature Usage of successful & unsuccessful customers Friday, 29 March 2013

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Time to Complete Useful for Email Campaigns! Friday, 29 March 2013

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Request Demo Commit to become paying customer Visit landing page Create Account Provide billing info for 14-day trial Get welcome email with link to docs Schedule weekly meetings Review docs Establish success metrics Map user actions Send first production event ACTIVATION SIGNUP ACQUISITION Baseline AARRR metrics Identify key metric to improve Define experiments First meeting UPGRADE RETENTION Send events to staging Day 1 Day 2 Day 3 Week 2 Week 3 Week 4 Customer Journey Maps Friday, 29 March 2013

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Usability Tests http://www.slideshare.net/JohnnyForeigner/active-testing-sketches-leancamp-bcn Friday, 29 March 2013

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ACQUISITION ACTIVATION RETENTION REVENUE REFERRAL Value Metrics How do users find you? Do users have a great first experience? Do users come back? How do you make money? Do users tell others? Friday, 29 March 2013

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Did Key Activity More than Once “Created at least 3 cards on the Kan-ban board” “Wrote at least 2 blog posts” “Wrote at least 5 restaurant reviews” Friday, 29 March 2013

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Customer Happiness Index (CHI) Created Blog Post = 5 Points Shared Post on Twitter = 10 Points Visited Site = 0.1 Points Sum together per User in Ranked List & Reset Each Week Visualises your Power Users Friday, 29 March 2013

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1-day 52% 7-day 31% 14-day 22% 30-day 14% Friday, 29 March 2013

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Accelerating Growth Friday, 29 March 2013

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ACQUISITION ACTIVATION RETENTION REVENUE REFERRAL Growth Metrics How do users find you? Do users have a great first experience? Do users come back? How do you make money? Do users tell others? Friday, 29 March 2013

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The engine of growth is the mechanism that startups use to achieve sustainable growth. -Eric Ries, The Lean Startup Friday, 29 March 2013

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Sticky Organic Growth > Churn Rate Friday, 29 March 2013

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Paid 3x Acquisition Cost < Lifetime Value Friday, 29 March 2013

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Viral Viral Coefficient > 1.0 Friday, 29 March 2013

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3x Acquisition Cost < Lifetime Value Content Marketing vs Direct Sales vs Advertising Avg Length of Sales Cycle Monthly Churn Customer Happiness Index 7/14/30 day retention Avg Revenue / User Typical SaaS Company Friday, 29 March 2013

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Taking Action Friday, 29 March 2013

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Metrics are not a “Task”. ☑ Built a Metrics Dashboard ☐ Profit! ☐ ? Friday, 29 March 2013

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IDEAS PRODUCT DATA MEASURE BUILD LEARN Experiment Friday, 29 March 2013

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Hypotheses instead of Requirements Friday, 29 March 2013

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Requirement: Users can add a Cover Photo to their Profile. Friday, 29 March 2013

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We believe that users will add a cover photo and spend more time on other profiles. Hypothesis: Friday, 29 March 2013

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50% of newly signed up users will upload a cover photo, Avg time spent on user profiles will go from 30s to 1min+ Falsifiable Hypothesis: Friday, 29 March 2013

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Experiment Reports Friday, 29 March 2013

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1. Context - Why is this relevant? 2. Quantify Your Goals 3. Set Scope & Timebox Planning an Experiment Friday, 29 March 2013

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Learning Goal EXPERIMENT REPORT Author: Title: Created: Experiment Scope Minimum Build Plan Lean Stack by Spark59.com Falsifiable Hypothesis Validated Learning Results Next Action What are you trying to learn or achieve? List the build plan step by step to get your measurement and experiment. How many and/or how long will the experiment last? [DATE] [NAME] [TITLE] Your list of statements on the expected outcome of the experiment. Use this format: [Specific Repeatable Action] will [Expected Measurable Outcome] Enter the data. Summarize your learning from the experiment. VALIDATED or INVALIDATED Whatʼs the next experiment? Friday, 29 March 2013

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Learning Goal EXPERIMENT REPORT Author: Title: Created: Experiment Scope Minimum Build Plan Lean Stack by Spark59.com Falsifiable Hypothesis Validated Learning Results Next Action What are you trying to learn or achieve? List the build plan step by step to get your measurement and experiment. How many and/or how long will the experiment last? [DATE] [NAME] [TITLE] Your list of statements on the expected outcome of the experiment. Use this format: [Specific Repeatable Action] will [Expected Measurable Outcome] Enter the data. Summarize your learning from the experiment. VALIDATED or INVALIDATED Whatʼs the next experiment? Left Side Defines The Experiment Friday, 29 March 2013

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Learning Goal EXPERIMENT REPORT Author: Title: Created: Experiment Scope Minimum Build Plan Lean Stack by Spark59.com Falsifiable Hypothesis Validated Learning Results Next Action What are you trying to learn or achieve? List the build plan step by step to get your measurement and experiment. How many and/or how long will the experiment last? [DATE] [NAME] [TITLE] Your list of statements on the expected outcome of the experiment. Use this format: [Specific Repeatable Action] will [Expected Measurable Outcome] Enter the data. Summarize your learning from the experiment. VALIDATED or INVALIDATED Whatʼs the next experiment? Right Side Analyses The Results Friday, 29 March 2013

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Give Context. Why is this relevant? Background What are you trying to learn or achieve? Friday, 29 March 2013

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Quantify Your Goals Falsifiable Hypothesis Your list of statements on the expected outcome of the experiment. Use this format: [Specific Repeatable Action] will [Expected Measurable Outcome] Friday, 29 March 2013

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Set Scope & Timebox Experiment Scope How long will the experiment last? Minimum Build Plan List the build plan step by step to get your measurement and experiment. Friday, 29 March 2013

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1. Context - Why is this relevant? 2. Quantify Your Goals 3. Set Scope & Timebox Planning an Experiment Friday, 29 March 2013

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Learning Goal EXPERIMENT REPORT Author: Title: Created: Experiment Scope Minimum Build Plan Lean Stack by Spark59.com Falsifiable Hypothesis Validated Learning Results Next Action What are you trying to learn or achieve? List the build plan step by step to get your measurement and experiment. How many and/or how long will the experiment last? [DATE] [NAME] [TITLE] Your list of statements on the expected outcome of the experiment. Use this format: [Specific Repeatable Action] will [Expected Measurable Outcome] Enter the data. Summarize your learning from the experiment. VALIDATED or INVALIDATED Whatʼs the next experiment? Right Side Analyses The Results Friday, 29 March 2013

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Actual data you Measured, based on your Hypothesis. Results Enter the data. Friday, 29 March 2013

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Validated Invalidated Inconclusive Validated Learning Summarize your learning from the experiment. + Why? Friday, 29 March 2013

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What will you do next based on your learning? Next Action Whatʼs the next experiment? Friday, 29 March 2013

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✘ Failure is good. Validated Learning is our Measurement of Progress. Friday, 29 March 2013

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IDEAS PRODUCT DATA MEASURE BUILD LEARN Build Measure Learn ✓ ✘ Kan-ban Board Friday, 29 March 2013

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Build Measure Learn ✓ ✘ Friday, 29 March 2013

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1 experiment per team member Friday, 29 March 2013

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Separate Task Board for tracking the details Swimlane for each Experiment Friday, 29 March 2013

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Timeboxing Friday, 29 March 2013

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Build Measure Learn ✓ ✘ Friday, 29 March 2013

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Build Measure Learn ✓ ✘ Experiment Scope Experiment Scope How long will the experiment last? Friday, 29 March 2013

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Interviews/Prototypes: 1-2 Weeks Testing your MVP: 1 Month A/B Tests: 2-3 Months Recommended Timeboxes: Friday, 29 March 2013

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Weekly Strategy Meeting Friday, 29 March 2013

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Observe & Explain To The Group Ideate Alone Discuss In the Group Everyone writes down their idea of an Experiment! Friday, 29 March 2013

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Review Experiments Only In Weekly Meeting Focus On Efficiency In Daily Stand-ups Friday, 29 March 2013

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Thanks! Learn more: http://j.mp/s59-metrics Friday, 29 March 2013