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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. Thursday, 23 May 2013

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About Myself & Spark59 Founded 2 tech startups, worked with many others Thursday, 23 May 2013

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Thursday, 23 May 2013

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“Am I making progress into the right direction?” Thursday, 23 May 2013

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$$$/users/etc Time Thursday, 23 May 2013

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Product/ Market Fit 1. Deliver Value 2. Accelerate Growth Thursday, 23 May 2013

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Product/ Market Fit 1. Value 2. Growth Thursday, 23 May 2013

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Product/Market Fit: The moment when you can consistently deliver value to the right people. Thursday, 23 May 2013

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Focus on Outcome, not Tasks. Thursday, 23 May 2013

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Make Customers Happy Make Happy Customers Thursday, 23 May 2013

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$10000 / month $2000 / month Now June 2013 ? Thursday, 23 May 2013

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Break Revenue Targets, down into Unit Economics. Thursday, 23 May 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? Thursday, 23 May 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: Thursday, 23 May 2013

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Cohort Analysis Thursday, 23 May 2013

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Cohort: Group of people that share a common characteristic over a period of time. Thursday, 23 May 2013

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Thursday, 23 May 2013

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Track people, not events. Thursday, 23 May 2013

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Group users by sign-up date and track their lifecycle. Thursday, 23 May 2013

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Thursday, 23 May 2013

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Thursday, 23 May 2013

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Cohort Analysis for Retention Thursday, 23 May 2013

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$10000 / month $2000 / month Now June 2013 ? Thursday, 23 May 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 Thursday, 23 May 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 Thursday, 23 May 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 Thursday, 23 May 2013

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Delivering Value Thursday, 23 May 2013

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Customers need to experience the value, otherwise they will leave. Thursday, 23 May 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? Thursday, 23 May 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? Thursday, 23 May 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? Thursday, 23 May 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? Thursday, 23 May 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 Thursday, 23 May 2013

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[ Exercise ] How do you deliver your Initial Value? Thursday, 23 May 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? Thursday, 23 May 2013

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Feature Usage of successful & unsuccessful customers Thursday, 23 May 2013

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Time to Complete Useful for Email Campaigns! Thursday, 23 May 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 Thursday, 23 May 2013

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Usability Tests http://www.slideshare.net/JohnnyForeigner/active-testing-sketches-leancamp-bcn Thursday, 23 May 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? Thursday, 23 May 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” Thursday, 23 May 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 Thursday, 23 May 2013

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1-day 52% 7-day 31% 14-day 22% 30-day 14% Thursday, 23 May 2013

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Thursday, 23 May 2013

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Accelerating Growth Thursday, 23 May 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? Thursday, 23 May 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? Thursday, 23 May 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? Thursday, 23 May 2013

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The engine of growth is the mechanism that startups use to achieve sustainable growth. -Eric Ries, The Lean Startup Thursday, 23 May 2013

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Sticky Organic Growth > Churn Rate Thursday, 23 May 2013

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Paid 3x Acquisition Cost < Lifetime Value Thursday, 23 May 2013

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Viral Viral Coefficient > 1.0 Thursday, 23 May 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 Thursday, 23 May 2013

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Taking Action Thursday, 23 May 2013

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Metrics are not a “Task”. ☑ Built a Metrics Dashboard ☐ Profit! ☐ ? Thursday, 23 May 2013

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IDEAS PRODUCT DATA MEASURE BUILD LEARN Thursday, 23 May 2013

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IDEAS PRODUCT DATA MEASURE BUILD LEARN Experiment Thursday, 23 May 2013

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Hypotheses instead of Requirements Thursday, 23 May 2013

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Requirement: Users can add a Cover Photo to their Profile. Thursday, 23 May 2013

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We believe that users will add a cover photo and spend more time on other profiles. Hypothesis: Thursday, 23 May 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: Thursday, 23 May 2013

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[Exercise] Example Experiment + Hypothesis Thursday, 23 May 2013

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IDEAS PRODUCT DATA MEASURE BUILD LEARN Build Measure Learn ✓ ✘ Kan-ban Board Thursday, 23 May 2013

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Build Measure Learn ✓ ✘ Thursday, 23 May 2013

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Build Measure Learn ✓ ✘ Experiment Scope How long do we run this experiment? Thursday, 23 May 2013

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Dictates how fast you can learn Experiment Scope Your Runway How long you can survive Thursday, 23 May 2013

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Example! Thursday, 23 May 2013

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Split URL Test Thursday, 23 May 2013

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VARIANT Thursday, 23 May 2013

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VARIANT Thursday, 23 May 2013

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VARIANT Thursday, 23 May 2013

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VARIANT Thursday, 23 May 2013

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Thursday, 23 May 2013

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New variant will increase conversion by 5% Falsifiable Hypothesis: 10-14 hours to build & implement 1,000 visitors per page Experiment Scope: Thursday, 23 May 2013

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VARIANT Visual Website Optimizer CONTROL 50% 50% Measurements via unique visitors Thursday, 23 May 2013

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VARIANT CONTROL ?? How did we do? ?? Thursday, 23 May 2013

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VARIANT CONTROL 42.2% Conversion 20% Better 35.1% Conversion Thursday, 23 May 2013

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VARIANT WHY??? New LAYOUT New COPY New SOCIAL PROOF Thursday, 23 May 2013

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VARIANT Visual Website Optimizer Experiments are additive #4 #3 Thursday, 23 May 2013

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VARIANT #4 #3 Same content, just new layout Visual Website Optimizer #5 Thursday, 23 May 2013

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Design only variant will increase conversion by 2% Falsifiable Hypothesis: ~ 2 hours to build & implement ~ 1,000 visitors per page Experiment Scope: Thursday, 23 May 2013

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VARIANT 2 42.6% Conversion 44.5% Conversion CONTROL Thursday, 23 May 2013

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INCREASE ACQUISITION SEO RANKING LANDING PAGE CONVERSION INBOUND CHANNELS # Depends on your resources & experiment scope Thursday, 23 May 2013

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Thanks! [email protected] Setup a 1:1 meeting on Dashboard.io Thursday, 23 May 2013