SlideShare una empresa de Scribd logo
1 de 69
Descargar para leer sin conexión
Lean Analytics
Melbourne Business School
October 14, 2015
@acroll
Percent of businesses that fail
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
71%69%66%63%60%55%50%44%36%25%
http://www.statisticbrain.com/startup-failure-by-industry/
Still operating after 4 years
Finance Insurance and Real Estate
Education and Health
Agriculture
Services
Wholesale
Mining
Manufacturing
Construction
Retail
Transportation Communication and Utilities
Information 37%
45%
47%
47%
49%
51%
54%
55%
56%
56%
58%
http://www.statisticbrain.com/startup-failure-by-industry/
Don’t sell what you can make. Make what you can sell.
Kevin Costner is a lousy entrepreneur.
The core of Lean
is iteration.
Unfortunately,
we’re all liars.
Everyone’s idea is
the best right?
People love
this part!
(but that’s not always
a good thing)
This is where
things fall apart.
No data, no
learning.
Most startups don’t know what they’ll
be when they grow up.
Hotmail

was a
database
company
Flickr

was going to
be an MMO
Twitter

was a
podcasting
company
Autodesk

made
desktop
automation
Paypal

first built for
Palmpilots
Freshbooks

was invoicing
for a web
design firm
Wikipedia

was to be
written by
experts only
Mitel

was a
lawnmower
company
Analytics can help.
Analytics is the measurement of
movement towards your business
goals.
In a startup, the purpose of analytics is
to iterate to product/market fit
before the money runs out.
We’re bad at data.
What are the chances
the other is a boy?
BB BG
GB GG
2 of 3 (66%) are boys.
GB GG BG
A good metric is:
Understandable
If you’re busy
explaining the
data, you won’t
be busy acting
on it.
Comparative
Comparison is
context.
A ratio or rate
The only way to
measure
change and roll
up the tension
between two
metrics (MPH)
Behavior

changing
What will you
do differently
based on the
results you
collect?
The
simplest
rule
bad

metric.
If a metric won’t change how
you behave, it’s a
h"p://www.flickr.com/photos/circasassy/7858155676/
Metrics help you know yourself.
Acquisition
Hybrid
Loyalty
70%

of retailers
20%

of retailers
10%

of retailers
You are
just like
Customers that
buy >1x in 90d
Once
2-2.5

per year
>2.5

per year
Your customers
will buy from you
Then you are
in this mode
1-15%
15-30%
>30%
Low acquisition
cost, high checkout
Increasing return
rates, market share
Loyalty, selection,
inventory size
Focus on
(Thanks to Kevin Hillstrom for this.)
MayAprMarFeb
Slicing and dicing data
Jan
0
5,000
Activeusers
Cohort:
Comparison of
similar groups
along a timeline.
(this is the April cohort)
A/B test:
Changing one thing
(i.e. color) and
measuring the
result (i.e. revenue.)
Multivariate

analysis
Changing several
things at once to
see which correlates
with a result.
☀
☁
☀
☁
Segment:
Cross-sectional
comparison of all
people divided by
some attribute (age,
gender, etc.)
☀
☁
Which of these two companies
is doing better?
  January February March April May
Rev/customer $5.00 $4.50 $4.33 $4.25 $4.50
Is this company
growing or stagnating?
Cohort 1 2 3 4 5
January $5 $3 $2 $1 $0.5
February $6 $4 $2 $1
March $7 $6 $5
April   $8 $7
May       $9
How about
this one?
Cohort 1 2 3 4 5
January $5 $3 $2 $1 $0.5
February $6 $4 $2 $1  
March $7 $6 $5    
April $8 $7      
May $9        
Averages $7 $5 $3 $1 $0.5
Look at the
same data
in cohorts
The Lean Analytics framework.
Eric’s three engines of growth
Virality
Make people
invite friends.
How many they
tell, how fast they
tell them.
Price
Spend money to
get customers.
Customers are
worth more than
they cost.
Stickiness
Keep people
coming back.
Approach
Get customers
faster than you
lose them.
Math that
matters
Dave’s Pirate Metrics
AARRR
Acquisition
How do your users become aware of you?
SEO, SEM, widgets, email, PR, campaigns, blogs ...
Activation
Do drive-by visitors subscribe, use, etc?
Features, design, tone, compensation, affirmation ...
Retention
Does a one-time user become engaged?
Notifications, alerts, reminders, emails, updates...
Revenue
Do you make money from user activity?
Transactions, clicks, subscriptions, DLC, analytics...
Referral
Do users promote your product?
Email, widgets, campaigns, likes, RTs, affiliates...
Stage
EMPATHY
I’ve found a real, poorly-met need that a
reachable market faces.
STICKINESS
I’ve figured out how to solve the problem in a
way they will keep using and pay for.
VIRALITY
I’ve found ways to get them to tell their friends,
either intrinsically or through incentives.
REVENUE
The users and features fuel growth organically
and artificially.
SCALE
I’ve found a sustainable, scalable business with
the right margins in a healthy ecosystem.
Gate
Thefivestages
Six business model archetypes.
E-commerce SaaS Media
Mobile

app
User-gen

content
2-sided

market
The business you’re in
(Which means eye
charts like these.)
Customer Acquisition Cost
paid direct search wom
inherent
virality
VISITOR
Freemium/trial offer
Enrollment
User
Disengaged User
Cancel
Freemium
churn
Engaged User
Free user
disengagement
Reactivate
Cancel
Trial abandonment
rate
Invite Others
Paying Customer
Reactivation

rate
Paid
conversion
FORMER USERS
User Lifetime Value
Reactivate
FORMER CUSTOMERS
Customer Lifetime Value
Viral coefficient

Viral rate
Resolution
Support data
Account Cancelled Billing Info Exp.
Paid Churn Rate
Tiering
Capacity Limit
Upselling
rate Upselling
Disengaged DissatisfiedTrial Over
Model + Stage = One Metric That Matters.
One Metric

That Matters.
The business you’re in
E-Com SaaS Mobile 2-Sided Media UCG
Empathy
Stickiness
Virality
Revenue
Scale
Thestageyou’reat
Really? Just one?
Yes, one.
In a startup, focus is hard to achieve.
Having only one metric
addresses this problem.
www.theeastsiderla.com
Metrics are like squeeze toys.
http://www.flickr.com/photos/connortarter/4791605202/
Empathy
Stickiness
Virality
Revenue
Scale
E-
commerce
SaaS Media
Mobile

app
User-gen

content
2-sided

market
Interviews; qualitative results; quantitative scoring; surveys
Loyalty,
conversion
CAC, shares,
reactivation
Transaction,
CLV
Affiliates,
white-label
Engagement,
churn
Inherent
virality, CAC
Upselling,
CAC, CLV
API, magic #,
mktplace
Content,
spam
Invites,
sharing
Ads,
donations
Analytics,
user data
Inventory,
listings
SEM, sharing
Transactions,
commission
Other
verticals
(Money from transactions)
Downloads,
churn, virality
WoM, app
ratings, CAC
CLV,
ARPDAU
Spinoffs,
publishers
(Money from active users)
Traffic, visits,
returns
Content
virality, SEM
CPE, affiliate
%, eyeballs
Syndication,
licenses
(Money from ad clicks)
Better: bit.ly/BigLeanTable
Drawing some lines in the sand.
A company loses a quarter of its
customers every year.
Is this good or bad?
Not knowing what normal is
makes you do stupid things.
Baseline:
5-7% growth a week
“A good growth rate during YC
is 5-7% a week,” he says. “If
you can hit 10% a week you're
doing exceptionally well. If you
can only manage 1%, it's a sign
you haven't yet figured out
what you're doing.” At revenue
stage, measure growth in
revenue. Before that, measure
growth in active users.
Paul Graham, Y Combinator
• Are there enough people who really care
enough to sustain a 5% growth rate?

• Don’t strive for a 5% growth at the expense
of really understanding your customers
and building a meaningful solution

• Once you’re a pre-revenue startup at or
near product/market fit, you should have
5% growth of active users each week
• Once you’re generating revenues, they
should grow at 5% a week
It’s oxygen
You need customers to keep learning
It’s a substitute for solvency
PhotobyPaulMilleronFlickr.https://www.flickr.com/photos/94674772@N03/8788576498
Baseline:
10% visitor engagement/day
Fred Wilson’s social ratios
30% of users/month use web or mobile app
10% of users/day use web or mobile app
1% of users/day use it concurrently
Baseline:
2-5% monthly churn
• The best SaaS get 1.5% - 3% a month. They have multiple Ph.D’s
on the job.
• Get below a 5% monthly churn rate before you know you’ve got a
business that’s ready to grow (Mark MacLeod) and around 2%
before you really step on the gas (David Skok)
• Last-ditch appeals and reactivation can have a big impact.
Facebook’s “don’t leave” reduces attrition by 7%.
Baseline:
Calculating customer lifetime
25%

monthly churn
100/25=4

The average
customer lasts
4 months
5%

monthly churn
100/5=20

The average
customer lasts
20 months
2%

monthly churn
100/2=50

The average
customer lasts
50 months
Baseline:
CAC under 1/3 of CLV
• CLV is wrong. CAC Is probably wrong, too.
• Time kills all plans: It’ll take a long time to find
out whether your churn and revenue projections
are right
• Cashflow: You’re basically “loaning” the
customer money between acquisition and CLV.
• It keeps you honest: Limiting yourself to a
CAC of only a third of your CLV will forces you
to verify costs sooner.
Lifetime of 20 mo.
$30/mo. per
customer
$600 CLV
$200 CAC
Now segment
those users!
1/3 spend
Who is worth more?
Today
A
Lifetime:
$200
Roberto Medri, Etsy
B
Lifetime:
$200
Visits
The Lean Analytics cycle
Draw a new line
Pivot or

give up
Try again
Success!
Did we move the
needle?
Measure
the results
Make changes
in production
Design a test
Hypothesis
With data:

find a
commonality
Without data:
make a good
guess
Find a potential
improvement
Draw a linePick a KPI
Do AirBnB hosts
get more business
if their property is
professionally
photographed?
Gut instinct (hypothesis)
Professional photography helps AirBnB’s business
Candidate solution (MVP)
20 field photographers posing as employees
Measure the results
Compare photographed listings to a control group
Make a decision
Launch photography as a new feature for all hosts
5,000 shoots per month
by February 2012
Hang on a second.
Gut instinct (hypothesis)
Professional photography helps AirBnB’s business
SRSLY?
Draw a new line
Pivot or

give up
Try again
Success!
Did we move the
needle?
Measure
the results
Make changes
in production
Design a test
Hypothesis
With data:

find a
commonality
Without data:
make a good
guess
Find a potential
improvement
Draw a linePick a KPI
“Gee, those
houses that do
well look really
nice.”
Maybe it’s the
camera.
“Computer: What
do all the
highly rented
houses have in
common?”
Camera model.
With data:

find a commonality
Without data: make a
good guess
Landing page design A/B testing
Cohort analysis General analytics
URL shortening
Funnel analytics
Influencer Marketing
Publisher analytics
SaaS analytics
Gaming analytics
User interaction Customer satisfaction KPI dashboardsUser segmentation
User analytics Spying on users
When you’re a startup
your goal is to find a sustainable,
repeatable business model.
When you’re a big company
your goal is to perpetuate one.
In a startup, the purpose of analytics is
to iterate to product/market fit
before the money runs out.
In a big company,
analytics replaces opinion with fact.
Arbitron and radio data
Times a song in “heavy
rotation” is played daily
2007 2012
266
Conclusions
“The most important figures that one
needs for management are unknown
or unknowable, but successful
management must nevertheless take
account of them.”
Lloyd S. Nelson
Pic by Twodolla on Flickr. http://www.flickr.com/photos/twodolla/3168857844
ARCHIMEDES
HAD TAKEN
BATHS BEFORE.
Once, a leader convinced others
in the absence of data.
Now, a leader knows
what questions to ask.
Alistair Croll
acroll@gmail.com
@acroll
Ben Yoskovitz
byosko@gmail.com
@byosko

Más contenido relacionado

La actualidad más candente

Lean Analytics workshop for Dublin City University, April 2014
Lean Analytics workshop for Dublin City University, April 2014Lean Analytics workshop for Dublin City University, April 2014
Lean Analytics workshop for Dublin City University, April 2014Lean Analytics
 
Lean Analytics for Nikkei BP
Lean Analytics for Nikkei BPLean Analytics for Nikkei BP
Lean Analytics for Nikkei BPLean Analytics
 
Lean Analytics: A short summary
Lean Analytics: A short summaryLean Analytics: A short summary
Lean Analytics: A short summaryJan König
 
Slides for the day-long Lean Analytics workshop at the 2014 Lean Startup conf...
Slides for the day-long Lean Analytics workshop at the 2014 Lean Startup conf...Slides for the day-long Lean Analytics workshop at the 2014 Lean Startup conf...
Slides for the day-long Lean Analytics workshop at the 2014 Lean Startup conf...Lean Analytics
 
Lean Analytics @ MicroConf
Lean Analytics @ MicroConfLean Analytics @ MicroConf
Lean Analytics @ MicroConfLean Analytics
 
7 Myths of Lean and How Analytics Can Help
7 Myths of Lean and How Analytics Can Help7 Myths of Lean and How Analytics Can Help
7 Myths of Lean and How Analytics Can HelpLean Analytics
 
Startup metrics toronto March 19
Startup metrics toronto March 19Startup metrics toronto March 19
Startup metrics toronto March 19Lean Analytics
 
Understanding Lean Analytics (and how analytics helps businesses win)
Understanding Lean Analytics (and how analytics helps businesses win)Understanding Lean Analytics (and how analytics helps businesses win)
Understanding Lean Analytics (and how analytics helps businesses win)Lean Analytics
 
Big data tokyo (extended version)
Big data tokyo  (extended version)Big data tokyo  (extended version)
Big data tokyo (extended version)Lean Analytics
 
Lean Analytics - Ben Yoskovitz, Co-author, Lean Analytics & VP Product, Varag...
Lean Analytics - Ben Yoskovitz, Co-author, Lean Analytics & VP Product, Varag...Lean Analytics - Ben Yoskovitz, Co-author, Lean Analytics & VP Product, Varag...
Lean Analytics - Ben Yoskovitz, Co-author, Lean Analytics & VP Product, Varag...Traction Conf
 
Big Data for the CMO
Big Data for the CMOBig Data for the CMO
Big Data for the CMOBruno Aziza
 
Be a Great Product Leader (Zynga 2016)
Be a Great Product Leader (Zynga 2016)Be a Great Product Leader (Zynga 2016)
Be a Great Product Leader (Zynga 2016)Adam Nash
 
Lean Analytics for Intrapreneurs (Lean Startup Conf 2013)
Lean Analytics for Intrapreneurs (Lean Startup Conf 2013)Lean Analytics for Intrapreneurs (Lean Startup Conf 2013)
Lean Analytics for Intrapreneurs (Lean Startup Conf 2013)Lean Analytics
 
Global Management
Global ManagementGlobal Management
Global ManagementBob Asken
 
Measuring the ROI of content marketing
Measuring the ROI of content marketingMeasuring the ROI of content marketing
Measuring the ROI of content marketingJono Alderson
 
Startup Metrics, a love story. All slides of an 6h Lean Analytics workshop.
Startup Metrics, a love story. All slides of an 6h Lean Analytics workshop.Startup Metrics, a love story. All slides of an 6h Lean Analytics workshop.
Startup Metrics, a love story. All slides of an 6h Lean Analytics workshop.Andreas Klinger
 
The Science behind Viral marketing
The Science behind Viral marketingThe Science behind Viral marketing
The Science behind Viral marketingDavid Skok
 
The ultimate guide to data storytelling | Materclass
The ultimate guide to data storytelling | MaterclassThe ultimate guide to data storytelling | Materclass
The ultimate guide to data storytelling | MaterclassGramener
 

La actualidad más candente (19)

Lean Analytics workshop for Dublin City University, April 2014
Lean Analytics workshop for Dublin City University, April 2014Lean Analytics workshop for Dublin City University, April 2014
Lean Analytics workshop for Dublin City University, April 2014
 
Lean Analytics for Nikkei BP
Lean Analytics for Nikkei BPLean Analytics for Nikkei BP
Lean Analytics for Nikkei BP
 
Lean Analytics: A short summary
Lean Analytics: A short summaryLean Analytics: A short summary
Lean Analytics: A short summary
 
Slides for the day-long Lean Analytics workshop at the 2014 Lean Startup conf...
Slides for the day-long Lean Analytics workshop at the 2014 Lean Startup conf...Slides for the day-long Lean Analytics workshop at the 2014 Lean Startup conf...
Slides for the day-long Lean Analytics workshop at the 2014 Lean Startup conf...
 
Lean Analytics @ MicroConf
Lean Analytics @ MicroConfLean Analytics @ MicroConf
Lean Analytics @ MicroConf
 
7 Myths of Lean and How Analytics Can Help
7 Myths of Lean and How Analytics Can Help7 Myths of Lean and How Analytics Can Help
7 Myths of Lean and How Analytics Can Help
 
Startup metrics toronto March 19
Startup metrics toronto March 19Startup metrics toronto March 19
Startup metrics toronto March 19
 
Understanding Lean Analytics (and how analytics helps businesses win)
Understanding Lean Analytics (and how analytics helps businesses win)Understanding Lean Analytics (and how analytics helps businesses win)
Understanding Lean Analytics (and how analytics helps businesses win)
 
Metrics 101
Metrics 101Metrics 101
Metrics 101
 
Big data tokyo (extended version)
Big data tokyo  (extended version)Big data tokyo  (extended version)
Big data tokyo (extended version)
 
Lean Analytics - Ben Yoskovitz, Co-author, Lean Analytics & VP Product, Varag...
Lean Analytics - Ben Yoskovitz, Co-author, Lean Analytics & VP Product, Varag...Lean Analytics - Ben Yoskovitz, Co-author, Lean Analytics & VP Product, Varag...
Lean Analytics - Ben Yoskovitz, Co-author, Lean Analytics & VP Product, Varag...
 
Big Data for the CMO
Big Data for the CMOBig Data for the CMO
Big Data for the CMO
 
Be a Great Product Leader (Zynga 2016)
Be a Great Product Leader (Zynga 2016)Be a Great Product Leader (Zynga 2016)
Be a Great Product Leader (Zynga 2016)
 
Lean Analytics for Intrapreneurs (Lean Startup Conf 2013)
Lean Analytics for Intrapreneurs (Lean Startup Conf 2013)Lean Analytics for Intrapreneurs (Lean Startup Conf 2013)
Lean Analytics for Intrapreneurs (Lean Startup Conf 2013)
 
Global Management
Global ManagementGlobal Management
Global Management
 
Measuring the ROI of content marketing
Measuring the ROI of content marketingMeasuring the ROI of content marketing
Measuring the ROI of content marketing
 
Startup Metrics, a love story. All slides of an 6h Lean Analytics workshop.
Startup Metrics, a love story. All slides of an 6h Lean Analytics workshop.Startup Metrics, a love story. All slides of an 6h Lean Analytics workshop.
Startup Metrics, a love story. All slides of an 6h Lean Analytics workshop.
 
The Science behind Viral marketing
The Science behind Viral marketingThe Science behind Viral marketing
The Science behind Viral marketing
 
The ultimate guide to data storytelling | Materclass
The ultimate guide to data storytelling | MaterclassThe ultimate guide to data storytelling | Materclass
The ultimate guide to data storytelling | Materclass
 

Similar a Melbourne Business School - mba talk october 14 - croll - 40m - lean analytics

Startup Metrics: The Data That Will Make or Break Your Business by Alistair C...
Startup Metrics: The Data That Will Make or Break Your Business by Alistair C...Startup Metrics: The Data That Will Make or Break Your Business by Alistair C...
Startup Metrics: The Data That Will Make or Break Your Business by Alistair C...Lean Startup Co.
 
Alistaire croll lean analytics - montreal lean startup circle - september 2018
Alistaire croll   lean analytics - montreal lean startup circle - september 2018Alistaire croll   lean analytics - montreal lean startup circle - september 2018
Alistaire croll lean analytics - montreal lean startup circle - september 2018Lean Startup Circle Montreal
 
Lean Analytics for Intrapreneurs by Allistair Croll
Lean Analytics for Intrapreneurs by Allistair CrollLean Analytics for Intrapreneurs by Allistair Croll
Lean Analytics for Intrapreneurs by Allistair CrollLean Startup Co.
 
How to Build a Data-Driven Company
How to Build a Data-Driven CompanyHow to Build a Data-Driven Company
How to Build a Data-Driven CompanyJosh Braaten
 
Growth Hacking with Cassie Lancellotti-Young
Growth Hacking with Cassie Lancellotti-YoungGrowth Hacking with Cassie Lancellotti-Young
Growth Hacking with Cassie Lancellotti-YoungMattan Griffel
 
Digital Marketing and Social Media College of Charleston class one
Digital Marketing and Social Media College of Charleston class oneDigital Marketing and Social Media College of Charleston class one
Digital Marketing and Social Media College of Charleston class oneBarbara Fowler
 
7 Advanced Lead Nurturing Tips
7 Advanced Lead Nurturing Tips7 Advanced Lead Nurturing Tips
7 Advanced Lead Nurturing TipsPardot
 
Mastering SaaS Pricing - SaaStr Annual 2018
Mastering SaaS Pricing - SaaStr Annual 2018Mastering SaaS Pricing - SaaStr Annual 2018
Mastering SaaS Pricing - SaaStr Annual 2018OpenView
 
SBC Growth Week - Lean Analytics
SBC Growth Week - Lean AnalyticsSBC Growth Week - Lean Analytics
SBC Growth Week - Lean AnalyticsMeasureWorks
 
KD Paine Presentation
KD Paine PresentationKD Paine Presentation
KD Paine PresentationMediabistro
 
7 Biggest Child Care Challenges & How Technology Can Help
7 Biggest Child Care Challenges & How Technology Can Help7 Biggest Child Care Challenges & How Technology Can Help
7 Biggest Child Care Challenges & How Technology Can HelpProcare Software
 
CCH Breakfast Briefing presentation: Marketing and CRM for accountants
CCH Breakfast Briefing presentation: Marketing and CRM for accountantsCCH Breakfast Briefing presentation: Marketing and CRM for accountants
CCH Breakfast Briefing presentation: Marketing and CRM for accountantsCCH UK, a Wolters Kluwer business
 
Start-up Metrics (Smetrics )
Start-up Metrics (Smetrics )Start-up Metrics (Smetrics )
Start-up Metrics (Smetrics )James Alexander
 
Qualified B2B Sales Lead
Qualified B2B Sales LeadQualified B2B Sales Lead
Qualified B2B Sales LeadVivastream
 
Mastering SaaS Pricing
Mastering SaaS PricingMastering SaaS Pricing
Mastering SaaS PricingOpenView
 
QBO WORQshop: Are you ready to fundraise?
QBO WORQshop: Are you ready to fundraise?QBO WORQshop: Are you ready to fundraise?
QBO WORQshop: Are you ready to fundraise?Joseph de Leon
 
Microsoft Word Sales Survival Tips 1.1
Microsoft Word   Sales Survival Tips 1.1Microsoft Word   Sales Survival Tips 1.1
Microsoft Word Sales Survival Tips 1.1membersandmoney
 
Integrated communications dashboards june 2018
Integrated communications dashboards    june 2018 Integrated communications dashboards    june 2018
Integrated communications dashboards june 2018 Paine Publishing
 
Sample of how to teach the concepts of Business Intelligence to Fresh Graduat...
Sample of how to teach the concepts of Business Intelligence to Fresh Graduat...Sample of how to teach the concepts of Business Intelligence to Fresh Graduat...
Sample of how to teach the concepts of Business Intelligence to Fresh Graduat...Dan Meyer
 

Similar a Melbourne Business School - mba talk october 14 - croll - 40m - lean analytics (20)

Startup Metrics: The Data That Will Make or Break Your Business by Alistair C...
Startup Metrics: The Data That Will Make or Break Your Business by Alistair C...Startup Metrics: The Data That Will Make or Break Your Business by Alistair C...
Startup Metrics: The Data That Will Make or Break Your Business by Alistair C...
 
Alistaire croll lean analytics - montreal lean startup circle - september 2018
Alistaire croll   lean analytics - montreal lean startup circle - september 2018Alistaire croll   lean analytics - montreal lean startup circle - september 2018
Alistaire croll lean analytics - montreal lean startup circle - september 2018
 
Lean Analytics for Intrapreneurs by Allistair Croll
Lean Analytics for Intrapreneurs by Allistair CrollLean Analytics for Intrapreneurs by Allistair Croll
Lean Analytics for Intrapreneurs by Allistair Croll
 
How to Build a Data-Driven Company
How to Build a Data-Driven CompanyHow to Build a Data-Driven Company
How to Build a Data-Driven Company
 
Growth Hacking with Cassie Lancellotti-Young
Growth Hacking with Cassie Lancellotti-YoungGrowth Hacking with Cassie Lancellotti-Young
Growth Hacking with Cassie Lancellotti-Young
 
Digital Marketing and Social Media College of Charleston class one
Digital Marketing and Social Media College of Charleston class oneDigital Marketing and Social Media College of Charleston class one
Digital Marketing and Social Media College of Charleston class one
 
7 Advanced Lead Nurturing Tips
7 Advanced Lead Nurturing Tips7 Advanced Lead Nurturing Tips
7 Advanced Lead Nurturing Tips
 
Mastering SaaS Pricing - SaaStr Annual 2018
Mastering SaaS Pricing - SaaStr Annual 2018Mastering SaaS Pricing - SaaStr Annual 2018
Mastering SaaS Pricing - SaaStr Annual 2018
 
SBC Growth Week - Lean Analytics
SBC Growth Week - Lean AnalyticsSBC Growth Week - Lean Analytics
SBC Growth Week - Lean Analytics
 
KD Paine Presentation
KD Paine PresentationKD Paine Presentation
KD Paine Presentation
 
7 Biggest Child Care Challenges & How Technology Can Help
7 Biggest Child Care Challenges & How Technology Can Help7 Biggest Child Care Challenges & How Technology Can Help
7 Biggest Child Care Challenges & How Technology Can Help
 
Asmi San Diego
Asmi San DiegoAsmi San Diego
Asmi San Diego
 
CCH Breakfast Briefing presentation: Marketing and CRM for accountants
CCH Breakfast Briefing presentation: Marketing and CRM for accountantsCCH Breakfast Briefing presentation: Marketing and CRM for accountants
CCH Breakfast Briefing presentation: Marketing and CRM for accountants
 
Start-up Metrics (Smetrics )
Start-up Metrics (Smetrics )Start-up Metrics (Smetrics )
Start-up Metrics (Smetrics )
 
Qualified B2B Sales Lead
Qualified B2B Sales LeadQualified B2B Sales Lead
Qualified B2B Sales Lead
 
Mastering SaaS Pricing
Mastering SaaS PricingMastering SaaS Pricing
Mastering SaaS Pricing
 
QBO WORQshop: Are you ready to fundraise?
QBO WORQshop: Are you ready to fundraise?QBO WORQshop: Are you ready to fundraise?
QBO WORQshop: Are you ready to fundraise?
 
Microsoft Word Sales Survival Tips 1.1
Microsoft Word   Sales Survival Tips 1.1Microsoft Word   Sales Survival Tips 1.1
Microsoft Word Sales Survival Tips 1.1
 
Integrated communications dashboards june 2018
Integrated communications dashboards    june 2018 Integrated communications dashboards    june 2018
Integrated communications dashboards june 2018
 
Sample of how to teach the concepts of Business Intelligence to Fresh Graduat...
Sample of how to teach the concepts of Business Intelligence to Fresh Graduat...Sample of how to teach the concepts of Business Intelligence to Fresh Graduat...
Sample of how to teach the concepts of Business Intelligence to Fresh Graduat...
 

Más de Lean Analytics

Lean Analytics for Startups and Enterprises
Lean Analytics for Startups and EnterprisesLean Analytics for Startups and Enterprises
Lean Analytics for Startups and EnterprisesLean Analytics
 
Lean analytics from Web A Quebec mars 2014
Lean analytics from Web A Quebec mars 2014Lean analytics from Web A Quebec mars 2014
Lean analytics from Web A Quebec mars 2014Lean Analytics
 
Lean Analytics and Local Government - Alistair Croll - Code for America
Lean Analytics and Local Government - Alistair Croll - Code for AmericaLean Analytics and Local Government - Alistair Croll - Code for America
Lean Analytics and Local Government - Alistair Croll - Code for AmericaLean Analytics
 
Making Sense of the Numbers (Lean Analytics)
Making Sense of the Numbers (Lean Analytics)Making Sense of the Numbers (Lean Analytics)
Making Sense of the Numbers (Lean Analytics)Lean Analytics
 
Lean Analytics workshop (from Lean Startup Conf)
Lean Analytics workshop (from Lean Startup Conf)Lean Analytics workshop (from Lean Startup Conf)
Lean Analytics workshop (from Lean Startup Conf)Lean Analytics
 
Lean Startup Machine Montreal
Lean Startup Machine MontrealLean Startup Machine Montreal
Lean Startup Machine MontrealLean Analytics
 

Más de Lean Analytics (6)

Lean Analytics for Startups and Enterprises
Lean Analytics for Startups and EnterprisesLean Analytics for Startups and Enterprises
Lean Analytics for Startups and Enterprises
 
Lean analytics from Web A Quebec mars 2014
Lean analytics from Web A Quebec mars 2014Lean analytics from Web A Quebec mars 2014
Lean analytics from Web A Quebec mars 2014
 
Lean Analytics and Local Government - Alistair Croll - Code for America
Lean Analytics and Local Government - Alistair Croll - Code for AmericaLean Analytics and Local Government - Alistair Croll - Code for America
Lean Analytics and Local Government - Alistair Croll - Code for America
 
Making Sense of the Numbers (Lean Analytics)
Making Sense of the Numbers (Lean Analytics)Making Sense of the Numbers (Lean Analytics)
Making Sense of the Numbers (Lean Analytics)
 
Lean Analytics workshop (from Lean Startup Conf)
Lean Analytics workshop (from Lean Startup Conf)Lean Analytics workshop (from Lean Startup Conf)
Lean Analytics workshop (from Lean Startup Conf)
 
Lean Startup Machine Montreal
Lean Startup Machine MontrealLean Startup Machine Montreal
Lean Startup Machine Montreal
 

Último

PDT 89 - $1.4M - Seed - Plantee Innovations.pdf
PDT 89 - $1.4M - Seed - Plantee Innovations.pdfPDT 89 - $1.4M - Seed - Plantee Innovations.pdf
PDT 89 - $1.4M - Seed - Plantee Innovations.pdfHajeJanKamps
 
Live-Streaming in the Music Industry Webinar
Live-Streaming in the Music Industry WebinarLive-Streaming in the Music Industry Webinar
Live-Streaming in the Music Industry WebinarNathanielSchmuck
 
The End of Business as Usual: Rewire the Way You Work to Succeed in the Consu...
The End of Business as Usual: Rewire the Way You Work to Succeed in the Consu...The End of Business as Usual: Rewire the Way You Work to Succeed in the Consu...
The End of Business as Usual: Rewire the Way You Work to Succeed in the Consu...Brian Solis
 
Team B Mind Map for Organizational Chg..
Team B Mind Map for Organizational Chg..Team B Mind Map for Organizational Chg..
Team B Mind Map for Organizational Chg..dlewis191
 
Harvard Business Review.pptx | Navigating Labor Unrest (March-April 2024)
Harvard Business Review.pptx | Navigating Labor Unrest (March-April 2024)Harvard Business Review.pptx | Navigating Labor Unrest (March-April 2024)
Harvard Business Review.pptx | Navigating Labor Unrest (March-April 2024)tazeenaila12
 
AMAZON SELLER VIRTUAL ASSISTANT PRODUCT RESEARCH .pdf
AMAZON SELLER VIRTUAL ASSISTANT PRODUCT RESEARCH .pdfAMAZON SELLER VIRTUAL ASSISTANT PRODUCT RESEARCH .pdf
AMAZON SELLER VIRTUAL ASSISTANT PRODUCT RESEARCH .pdfJohnCarloValencia4
 
BCE24 | Virtual Brand Ambassadors: Making Brands Personal - John Meulemans
BCE24 | Virtual Brand Ambassadors: Making Brands Personal - John MeulemansBCE24 | Virtual Brand Ambassadors: Making Brands Personal - John Meulemans
BCE24 | Virtual Brand Ambassadors: Making Brands Personal - John MeulemansBBPMedia1
 
HELENE HECKROTTE'S PROFESSIONAL PORTFOLIO.pptx
HELENE HECKROTTE'S PROFESSIONAL PORTFOLIO.pptxHELENE HECKROTTE'S PROFESSIONAL PORTFOLIO.pptx
HELENE HECKROTTE'S PROFESSIONAL PORTFOLIO.pptxHelene Heckrotte
 
NASA CoCEI Scaling Strategy - November 2023
NASA CoCEI Scaling Strategy - November 2023NASA CoCEI Scaling Strategy - November 2023
NASA CoCEI Scaling Strategy - November 2023Steve Rader
 
Upgrade Your Banking Experience with Advanced Core Banking Applications
Upgrade Your Banking Experience with Advanced Core Banking ApplicationsUpgrade Your Banking Experience with Advanced Core Banking Applications
Upgrade Your Banking Experience with Advanced Core Banking ApplicationsIntellect Design Arena Ltd
 
Ethical stalking by Mark Williams. UpliftLive 2024
Ethical stalking by Mark Williams. UpliftLive 2024Ethical stalking by Mark Williams. UpliftLive 2024
Ethical stalking by Mark Williams. UpliftLive 2024Winbusinessin
 
Borderless Access - Global B2B Panel book-unlock 2024
Borderless Access - Global B2B Panel book-unlock 2024Borderless Access - Global B2B Panel book-unlock 2024
Borderless Access - Global B2B Panel book-unlock 2024Borderless Access
 
Borderless Access - Global B2B Panel book-unlock 2024
Borderless Access - Global B2B Panel book-unlock 2024Borderless Access - Global B2B Panel book-unlock 2024
Borderless Access - Global B2B Panel book-unlock 2024Borderless Access
 
Introduction to The overview of GAAP LO 1-5.pptx
Introduction to The overview of GAAP LO 1-5.pptxIntroduction to The overview of GAAP LO 1-5.pptx
Introduction to The overview of GAAP LO 1-5.pptxJemalSeid25
 
Developing Coaching Skills: Mine, Yours, Ours
Developing Coaching Skills: Mine, Yours, OursDeveloping Coaching Skills: Mine, Yours, Ours
Developing Coaching Skills: Mine, Yours, OursKaiNexus
 
Chicago Medical Malpractice Lawyer Chicago Medical Malpractice Lawyer.pdf
Chicago Medical Malpractice Lawyer Chicago Medical Malpractice Lawyer.pdfChicago Medical Malpractice Lawyer Chicago Medical Malpractice Lawyer.pdf
Chicago Medical Malpractice Lawyer Chicago Medical Malpractice Lawyer.pdfSourav Sikder
 
Fabric RFID Wristbands in Ireland for Events and Festivals
Fabric RFID Wristbands in Ireland for Events and FestivalsFabric RFID Wristbands in Ireland for Events and Festivals
Fabric RFID Wristbands in Ireland for Events and FestivalsWristbands Ireland
 
TalentView Webinar: Empowering the Modern Workforce_ Redefininig Success from...
TalentView Webinar: Empowering the Modern Workforce_ Redefininig Success from...TalentView Webinar: Empowering the Modern Workforce_ Redefininig Success from...
TalentView Webinar: Empowering the Modern Workforce_ Redefininig Success from...TalentView
 
Michael Vidyakin: Introduction to PMO (UA)
Michael Vidyakin: Introduction to PMO (UA)Michael Vidyakin: Introduction to PMO (UA)
Michael Vidyakin: Introduction to PMO (UA)Lviv Startup Club
 

Último (20)

Investment Opportunity for Thailand's Automotive & EV Industries
Investment Opportunity for Thailand's Automotive & EV IndustriesInvestment Opportunity for Thailand's Automotive & EV Industries
Investment Opportunity for Thailand's Automotive & EV Industries
 
PDT 89 - $1.4M - Seed - Plantee Innovations.pdf
PDT 89 - $1.4M - Seed - Plantee Innovations.pdfPDT 89 - $1.4M - Seed - Plantee Innovations.pdf
PDT 89 - $1.4M - Seed - Plantee Innovations.pdf
 
Live-Streaming in the Music Industry Webinar
Live-Streaming in the Music Industry WebinarLive-Streaming in the Music Industry Webinar
Live-Streaming in the Music Industry Webinar
 
The End of Business as Usual: Rewire the Way You Work to Succeed in the Consu...
The End of Business as Usual: Rewire the Way You Work to Succeed in the Consu...The End of Business as Usual: Rewire the Way You Work to Succeed in the Consu...
The End of Business as Usual: Rewire the Way You Work to Succeed in the Consu...
 
Team B Mind Map for Organizational Chg..
Team B Mind Map for Organizational Chg..Team B Mind Map for Organizational Chg..
Team B Mind Map for Organizational Chg..
 
Harvard Business Review.pptx | Navigating Labor Unrest (March-April 2024)
Harvard Business Review.pptx | Navigating Labor Unrest (March-April 2024)Harvard Business Review.pptx | Navigating Labor Unrest (March-April 2024)
Harvard Business Review.pptx | Navigating Labor Unrest (March-April 2024)
 
AMAZON SELLER VIRTUAL ASSISTANT PRODUCT RESEARCH .pdf
AMAZON SELLER VIRTUAL ASSISTANT PRODUCT RESEARCH .pdfAMAZON SELLER VIRTUAL ASSISTANT PRODUCT RESEARCH .pdf
AMAZON SELLER VIRTUAL ASSISTANT PRODUCT RESEARCH .pdf
 
BCE24 | Virtual Brand Ambassadors: Making Brands Personal - John Meulemans
BCE24 | Virtual Brand Ambassadors: Making Brands Personal - John MeulemansBCE24 | Virtual Brand Ambassadors: Making Brands Personal - John Meulemans
BCE24 | Virtual Brand Ambassadors: Making Brands Personal - John Meulemans
 
HELENE HECKROTTE'S PROFESSIONAL PORTFOLIO.pptx
HELENE HECKROTTE'S PROFESSIONAL PORTFOLIO.pptxHELENE HECKROTTE'S PROFESSIONAL PORTFOLIO.pptx
HELENE HECKROTTE'S PROFESSIONAL PORTFOLIO.pptx
 
NASA CoCEI Scaling Strategy - November 2023
NASA CoCEI Scaling Strategy - November 2023NASA CoCEI Scaling Strategy - November 2023
NASA CoCEI Scaling Strategy - November 2023
 
Upgrade Your Banking Experience with Advanced Core Banking Applications
Upgrade Your Banking Experience with Advanced Core Banking ApplicationsUpgrade Your Banking Experience with Advanced Core Banking Applications
Upgrade Your Banking Experience with Advanced Core Banking Applications
 
Ethical stalking by Mark Williams. UpliftLive 2024
Ethical stalking by Mark Williams. UpliftLive 2024Ethical stalking by Mark Williams. UpliftLive 2024
Ethical stalking by Mark Williams. UpliftLive 2024
 
Borderless Access - Global B2B Panel book-unlock 2024
Borderless Access - Global B2B Panel book-unlock 2024Borderless Access - Global B2B Panel book-unlock 2024
Borderless Access - Global B2B Panel book-unlock 2024
 
Borderless Access - Global B2B Panel book-unlock 2024
Borderless Access - Global B2B Panel book-unlock 2024Borderless Access - Global B2B Panel book-unlock 2024
Borderless Access - Global B2B Panel book-unlock 2024
 
Introduction to The overview of GAAP LO 1-5.pptx
Introduction to The overview of GAAP LO 1-5.pptxIntroduction to The overview of GAAP LO 1-5.pptx
Introduction to The overview of GAAP LO 1-5.pptx
 
Developing Coaching Skills: Mine, Yours, Ours
Developing Coaching Skills: Mine, Yours, OursDeveloping Coaching Skills: Mine, Yours, Ours
Developing Coaching Skills: Mine, Yours, Ours
 
Chicago Medical Malpractice Lawyer Chicago Medical Malpractice Lawyer.pdf
Chicago Medical Malpractice Lawyer Chicago Medical Malpractice Lawyer.pdfChicago Medical Malpractice Lawyer Chicago Medical Malpractice Lawyer.pdf
Chicago Medical Malpractice Lawyer Chicago Medical Malpractice Lawyer.pdf
 
Fabric RFID Wristbands in Ireland for Events and Festivals
Fabric RFID Wristbands in Ireland for Events and FestivalsFabric RFID Wristbands in Ireland for Events and Festivals
Fabric RFID Wristbands in Ireland for Events and Festivals
 
TalentView Webinar: Empowering the Modern Workforce_ Redefininig Success from...
TalentView Webinar: Empowering the Modern Workforce_ Redefininig Success from...TalentView Webinar: Empowering the Modern Workforce_ Redefininig Success from...
TalentView Webinar: Empowering the Modern Workforce_ Redefininig Success from...
 
Michael Vidyakin: Introduction to PMO (UA)
Michael Vidyakin: Introduction to PMO (UA)Michael Vidyakin: Introduction to PMO (UA)
Michael Vidyakin: Introduction to PMO (UA)
 

Melbourne Business School - mba talk october 14 - croll - 40m - lean analytics

  • 1. Lean Analytics Melbourne Business School October 14, 2015 @acroll
  • 2. Percent of businesses that fail Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 71%69%66%63%60%55%50%44%36%25% http://www.statisticbrain.com/startup-failure-by-industry/
  • 3. Still operating after 4 years Finance Insurance and Real Estate Education and Health Agriculture Services Wholesale Mining Manufacturing Construction Retail Transportation Communication and Utilities Information 37% 45% 47% 47% 49% 51% 54% 55% 56% 56% 58% http://www.statisticbrain.com/startup-failure-by-industry/
  • 4. Don’t sell what you can make. Make what you can sell. Kevin Costner is a lousy entrepreneur.
  • 5. The core of Lean is iteration.
  • 7. Everyone’s idea is the best right? People love this part! (but that’s not always a good thing) This is where things fall apart. No data, no learning.
  • 8. Most startups don’t know what they’ll be when they grow up. Hotmail
 was a database company Flickr
 was going to be an MMO Twitter
 was a podcasting company Autodesk
 made desktop automation Paypal
 first built for Palmpilots Freshbooks
 was invoicing for a web design firm Wikipedia
 was to be written by experts only Mitel
 was a lawnmower company
  • 10. Analytics is the measurement of movement towards your business goals.
  • 11. In a startup, the purpose of analytics is to iterate to product/market fit before the money runs out.
  • 12. We’re bad at data.
  • 13. What are the chances the other is a boy?
  • 15. 2 of 3 (66%) are boys. GB GG BG
  • 16. A good metric is: Understandable If you’re busy explaining the data, you won’t be busy acting on it. Comparative Comparison is context. A ratio or rate The only way to measure change and roll up the tension between two metrics (MPH) Behavior
 changing What will you do differently based on the results you collect?
  • 17. The simplest rule bad
 metric. If a metric won’t change how you behave, it’s a h"p://www.flickr.com/photos/circasassy/7858155676/
  • 18. Metrics help you know yourself. Acquisition Hybrid Loyalty 70%
 of retailers 20%
 of retailers 10%
 of retailers You are just like Customers that buy >1x in 90d Once 2-2.5
 per year >2.5
 per year Your customers will buy from you Then you are in this mode 1-15% 15-30% >30% Low acquisition cost, high checkout Increasing return rates, market share Loyalty, selection, inventory size Focus on (Thanks to Kevin Hillstrom for this.)
  • 19. MayAprMarFeb Slicing and dicing data Jan 0 5,000 Activeusers Cohort: Comparison of similar groups along a timeline. (this is the April cohort) A/B test: Changing one thing (i.e. color) and measuring the result (i.e. revenue.) Multivariate
 analysis Changing several things at once to see which correlates with a result. ☀ ☁ ☀ ☁ Segment: Cross-sectional comparison of all people divided by some attribute (age, gender, etc.) ☀ ☁
  • 20. Which of these two companies is doing better?
  • 21.   January February March April May Rev/customer $5.00 $4.50 $4.33 $4.25 $4.50 Is this company growing or stagnating? Cohort 1 2 3 4 5 January $5 $3 $2 $1 $0.5 February $6 $4 $2 $1 March $7 $6 $5 April   $8 $7 May       $9 How about this one?
  • 22. Cohort 1 2 3 4 5 January $5 $3 $2 $1 $0.5 February $6 $4 $2 $1   March $7 $6 $5     April $8 $7       May $9         Averages $7 $5 $3 $1 $0.5 Look at the same data in cohorts
  • 23. The Lean Analytics framework.
  • 24. Eric’s three engines of growth Virality Make people invite friends. How many they tell, how fast they tell them. Price Spend money to get customers. Customers are worth more than they cost. Stickiness Keep people coming back. Approach Get customers faster than you lose them. Math that matters
  • 25. Dave’s Pirate Metrics AARRR Acquisition How do your users become aware of you? SEO, SEM, widgets, email, PR, campaigns, blogs ... Activation Do drive-by visitors subscribe, use, etc? Features, design, tone, compensation, affirmation ... Retention Does a one-time user become engaged? Notifications, alerts, reminders, emails, updates... Revenue Do you make money from user activity? Transactions, clicks, subscriptions, DLC, analytics... Referral Do users promote your product? Email, widgets, campaigns, likes, RTs, affiliates...
  • 26. Stage EMPATHY I’ve found a real, poorly-met need that a reachable market faces. STICKINESS I’ve figured out how to solve the problem in a way they will keep using and pay for. VIRALITY I’ve found ways to get them to tell their friends, either intrinsically or through incentives. REVENUE The users and features fuel growth organically and artificially. SCALE I’ve found a sustainable, scalable business with the right margins in a healthy ecosystem. Gate Thefivestages
  • 27. Six business model archetypes. E-commerce SaaS Media Mobile
 app User-gen
 content 2-sided
 market The business you’re in
  • 28. (Which means eye charts like these.) Customer Acquisition Cost paid direct search wom inherent virality VISITOR Freemium/trial offer Enrollment User Disengaged User Cancel Freemium churn Engaged User Free user disengagement Reactivate Cancel Trial abandonment rate Invite Others Paying Customer Reactivation
 rate Paid conversion FORMER USERS User Lifetime Value Reactivate FORMER CUSTOMERS Customer Lifetime Value Viral coefficient Viral rate Resolution Support data Account Cancelled Billing Info Exp. Paid Churn Rate Tiering Capacity Limit Upselling rate Upselling Disengaged DissatisfiedTrial Over
  • 29. Model + Stage = One Metric That Matters. One Metric
 That Matters. The business you’re in E-Com SaaS Mobile 2-Sided Media UCG Empathy Stickiness Virality Revenue Scale Thestageyou’reat
  • 32. In a startup, focus is hard to achieve.
  • 33. Having only one metric addresses this problem.
  • 35. Metrics are like squeeze toys. http://www.flickr.com/photos/connortarter/4791605202/
  • 36. Empathy Stickiness Virality Revenue Scale E- commerce SaaS Media Mobile
 app User-gen
 content 2-sided
 market Interviews; qualitative results; quantitative scoring; surveys Loyalty, conversion CAC, shares, reactivation Transaction, CLV Affiliates, white-label Engagement, churn Inherent virality, CAC Upselling, CAC, CLV API, magic #, mktplace Content, spam Invites, sharing Ads, donations Analytics, user data Inventory, listings SEM, sharing Transactions, commission Other verticals (Money from transactions) Downloads, churn, virality WoM, app ratings, CAC CLV, ARPDAU Spinoffs, publishers (Money from active users) Traffic, visits, returns Content virality, SEM CPE, affiliate %, eyeballs Syndication, licenses (Money from ad clicks)
  • 38. Drawing some lines in the sand.
  • 39. A company loses a quarter of its customers every year. Is this good or bad?
  • 40. Not knowing what normal is makes you do stupid things.
  • 41. Baseline: 5-7% growth a week “A good growth rate during YC is 5-7% a week,” he says. “If you can hit 10% a week you're doing exceptionally well. If you can only manage 1%, it's a sign you haven't yet figured out what you're doing.” At revenue stage, measure growth in revenue. Before that, measure growth in active users. Paul Graham, Y Combinator • Are there enough people who really care enough to sustain a 5% growth rate? • Don’t strive for a 5% growth at the expense of really understanding your customers and building a meaningful solution • Once you’re a pre-revenue startup at or near product/market fit, you should have 5% growth of active users each week • Once you’re generating revenues, they should grow at 5% a week
  • 42. It’s oxygen You need customers to keep learning It’s a substitute for solvency PhotobyPaulMilleronFlickr.https://www.flickr.com/photos/94674772@N03/8788576498
  • 43. Baseline: 10% visitor engagement/day Fred Wilson’s social ratios 30% of users/month use web or mobile app 10% of users/day use web or mobile app 1% of users/day use it concurrently
  • 44. Baseline: 2-5% monthly churn • The best SaaS get 1.5% - 3% a month. They have multiple Ph.D’s on the job. • Get below a 5% monthly churn rate before you know you’ve got a business that’s ready to grow (Mark MacLeod) and around 2% before you really step on the gas (David Skok) • Last-ditch appeals and reactivation can have a big impact. Facebook’s “don’t leave” reduces attrition by 7%.
  • 45. Baseline: Calculating customer lifetime 25%
 monthly churn 100/25=4
 The average customer lasts 4 months 5%
 monthly churn 100/5=20
 The average customer lasts 20 months 2%
 monthly churn 100/2=50
 The average customer lasts 50 months
  • 46. Baseline: CAC under 1/3 of CLV • CLV is wrong. CAC Is probably wrong, too. • Time kills all plans: It’ll take a long time to find out whether your churn and revenue projections are right • Cashflow: You’re basically “loaning” the customer money between acquisition and CLV. • It keeps you honest: Limiting yourself to a CAC of only a third of your CLV will forces you to verify costs sooner. Lifetime of 20 mo. $30/mo. per customer $600 CLV $200 CAC Now segment those users! 1/3 spend
  • 47. Who is worth more? Today A Lifetime: $200 Roberto Medri, Etsy B Lifetime: $200 Visits
  • 49. Draw a new line Pivot or
 give up Try again Success! Did we move the needle? Measure the results Make changes in production Design a test Hypothesis With data:
 find a commonality Without data: make a good guess Find a potential improvement Draw a linePick a KPI
  • 50. Do AirBnB hosts get more business if their property is professionally photographed?
  • 51. Gut instinct (hypothesis) Professional photography helps AirBnB’s business Candidate solution (MVP) 20 field photographers posing as employees Measure the results Compare photographed listings to a control group Make a decision Launch photography as a new feature for all hosts
  • 52. 5,000 shoots per month by February 2012
  • 53. Hang on a second.
  • 54. Gut instinct (hypothesis) Professional photography helps AirBnB’s business SRSLY?
  • 55. Draw a new line Pivot or
 give up Try again Success! Did we move the needle? Measure the results Make changes in production Design a test Hypothesis With data:
 find a commonality Without data: make a good guess Find a potential improvement Draw a linePick a KPI
  • 56. “Gee, those houses that do well look really nice.” Maybe it’s the camera. “Computer: What do all the highly rented houses have in common?” Camera model. With data:
 find a commonality Without data: make a good guess
  • 57. Landing page design A/B testing Cohort analysis General analytics URL shortening Funnel analytics Influencer Marketing Publisher analytics SaaS analytics Gaming analytics User interaction Customer satisfaction KPI dashboardsUser segmentation User analytics Spying on users
  • 58. When you’re a startup your goal is to find a sustainable, repeatable business model. When you’re a big company your goal is to perpetuate one.
  • 59. In a startup, the purpose of analytics is to iterate to product/market fit before the money runs out.
  • 60. In a big company, analytics replaces opinion with fact.
  • 62. Times a song in “heavy rotation” is played daily 2007 2012 266
  • 64. “The most important figures that one needs for management are unknown or unknowable, but successful management must nevertheless take account of them.” Lloyd S. Nelson
  • 65. Pic by Twodolla on Flickr. http://www.flickr.com/photos/twodolla/3168857844
  • 67. Once, a leader convinced others in the absence of data.
  • 68. Now, a leader knows what questions to ask.