Startup Metrics for Pirates (Nov 2010)

Startup Metrics for Pirates 5 th Annual Arizona Entrepreneurship Conference Phoenix, AZ – Nov 2010 Dave McClure @DaveMcClure http://www.500startups.com http://500hats.typepad.com http://slideshare.net/dmc500hats HashTags: #AZEC10 #aarrr #leanstartup AARRR !

AARRR! : 5-Step Startup Metrics Model Website.com R evenue $$$ Biz Dev Ads, Lead Gen, Subscriptions, ECommerce A CQUISITION SEO SEM Apps & Widgets Affiliates Email PR Biz Dev Campaigns, Contests Direct, Tel, TV Social Networks Blogs Domains R etention Emails & Alerts System Events & Time-based Features Blogs, RSS, News Feeds

Startup Challenges ,[object Object],[object Object],[object Object],[object Object],[object Object]

Startup 2.0 : “Lean Investor” Model ,[object Object],[object Object],[object Object],[object Object]

[Pardon The Blatant Commercial]

Dave McClure ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],GEEK, CODER, ENTREPRENEUR Blogger, Marketing, Angel/VC Investor

500 Hats Investments (13+ deals, 2004-2008, ~$310K) Results: 1 exit @ $170M (9x) , +3-6 future wins (i hope ;) 2 exits @ $50M, $70M (advisory roles) (acq YHOO) (acq GOOG) (acq INTU)

Founders Fund Investments (43 deals, 2009, ~2.9M) Results : 8 raised seed rd $500K+ 1 raised $4M; 3 early exits Results : 6 raised next rd $2M+ 1 raised $12M; 1 early exit fbFund REV (Facebook Incubator) 22 deals ($850K total) ~$40K avg FF Angel LLC 21 deals ($2M total) ~$100K avg

500 Startups - Fund I (60+ investments @ ~$75K avg) Wildfire Crave Tello AwayFind Indinero MyGengo Revnetics Mogotix EcoMom Zencoder GazeHawk Crocodoc SayHired Recurly AppBistro Foodspotting Gantto Medialets Rapportive TransFS SiteJabber GinzaMetrics Estately FlowTown OneForty Twilio Postling Plancast ElaCarte WePay Zappli Format Baydin GroupSpaces Rapportive Apsalar Bunndle Udemy Brainient ReadyForZero Graphicly StoryJumper OtherInbox Viikii Zozi One True Fan Formative Labs Networked Blogs

Web 2.0: Hell Yes , Good Times. ,[object Object],[object Object],[object Object],[object Object],[object Object],R.I.P. *BAD* TIMES

Discover Meaning Why Should Users Give a SHIT About You? Kathy Sierra: “ Creating Passionate Users”

Read Geoffrey Miller Sex + Evolution + Consumer Mktg = Awesome Sauce

Other Great Shit. Psychology + Comics

Discover Meaning Keywords, Images, Call-to-Action ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

KILL A FEATURE. Something Sucks . Find It. KILL It. ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

The Lean Startup ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Discover Customers (Steve Blank, SteveBlank.com)

Iterate , Dammit. (Eric Ries, StartupLessonsLearned.com) LEARN BUILD MEASURE IDEAS CODE DATA

Product/Market Fit b4 “Launch” (Sean Ellis, Startup-Marketing.com) Startup-Marketing.com

Just Gimme the GOOD Metrics. Users, Pages, Clicks, Emails, $$$...? ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],the good stuff.

Q: What’s My Business Model? ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Optimize 4 Happiness (both User + Business) ,[object Object],[object Object],[object Object],[object Object],[object Object],$$$

Startup Metrics for Pirates ,[object Object],[object Object],[object Object],[object Object],[object Object],(note: If you’re in a hurry, Google “Startup Metrics” & watch 5m video) AARRR !

AARRR !: 5-Step Startup Metrics Model Website.com R evenue $$$ Biz Dev Ads, Lead Gen, Subscriptions, ECommerce A CQUISITION SEO SEM Apps & Widgets Affiliates Email PR Biz Dev Campaigns, Contests Direct, Tel, TV Social Networks Blogs Domains R etention Emails & Alerts System Events & Time-based Features Blogs, RSS, News Feeds

[Startup Roles & Challenges ]

Role: Founder / CEO ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Role: Product / Eng / Design ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Example Conversion Dashboard (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” 1 st 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% $50

Role: Marketing / Sales ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Example Marketing Channels ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

M AARRR keting Plan ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

One Step at a Time. ,[object Object],[object Object],[object Object],“ You probably can’t save your Ass and your Face at the same time… choose carefully .” – DMC

Startup 2.0: “Lean Investor” Model ,[object Object],[object Object],[object Object],[object Object]

Investment #1: Incubate (“Product”) ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Investment #2: Seed (“Market”) ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Investment #3: Venture (“Revenue”) ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

[ Don’t Pitch Me, Bro. ] Seriously : Don’t. Fucking . Pitch Me. (and don’t email me either, cuz i won’t read it)

Don’t Pitch Me, Bro. ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Email

Links & Resources ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Website.com ,[object Object],[object Object],[object Object],[object Object],[object Object],do LOTS of landing page & A/B tests – make lots of dumb guesses & iterate FAST Activation SEO SEM Apps & Widgets Affiliates Email PR Biz Dev Campaigns, Contests Direct, Tel, TV Social Networks Blogs Domains

Activation What do users do on their first visit? ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Activation What do users do on their first visit? ,[object Object],[object Object],[object Object],[object Object]

Activation ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Website.com ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Retention SEO SEM Apps & Widgets Affiliates Email PR Biz Dev Campaigns, Contests Direct, Tel, TV Social Networks Blogs Domains Emails & Alerts System Events & Time-based Features Blogs, RSS, News Feeds

[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Retention How do users come back? How often?

[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Retention How do users come back? How often?

Retention How do users come back? How often? ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Retention ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Website.com ,[object Object],[object Object],[object Object],[object Object],Acquisition SEO SEM Apps & Widgets Affiliates Email PR Biz Dev Campaigns, Contests Direct, Tel, TV Social Networks Blogs Domains

Acquisition Where are users coming from? ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Acquisition Keyword Vocabulary ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Acquisition Where are users coming from? ,[object Object],[object Object],[object Object],[object Object],Example

Acquisition ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Website.com Focus on driving referrals * after * users have a “ happy ” experience; avg score >= 8 out of 10 Referral Acquisition SEO SEM Apps & Widgets Affiliates Email PR Biz Dev Campaigns, Contests Direct, Tel, TV Social Networks Blogs Domains Retention Emails & Alerts System Events & Time-based Features Blogs, RSS, News Feeds

Referral How do users refer others? ,[object Object],[object Object],[object Object],[object Object],[object Object]

Referral Viral Growth Factor ,[object Object],[object Object],[object Object],[object Object],A viral growth factor > 1 means an exponential organic user acquisition.

Referral ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Website.com Revenue This is the part *you* still have to figure out… (we don’t know jack about your business) R evenue $$$ Biz Dev Ads, Lead Gen, Subscriptions, ECommerce Acquisition SEO SEM Apps & Widgets Affiliates Email PR Biz Dev Campaigns, Contests Direct, Tel, TV Social Networks Blogs Domains Retention Emails & Alerts System Events & Time-based Features Blogs, RSS, News Feeds

Revenue How do you make money? ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Revenue ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Types of Measurement ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Startup Metrics for Pirates (Nov 2010)

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