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Lean analytics 40 minute intro
1. Upcoming Networking Events
1
Detailed Schedule and registrations as well as past session videos now available
www.productleadership.in
“5 things every Product Leader should know about UX
July 20th, Bangalore
Speaker: Jay, Head of User Experience Design Adobe
“Webinar: Global Customer Insights from India Product
Management – Can it be done?
Aug 7th, Online
Speaker: Muthu. R, Director Product Management, SAP Labs
“5 ways in how Product Management is different in Agile
July 25th, Pune
Speaker: Dr. Adrian (Hong Kong), Faculty Institute of
Product Leadership
8. Good Metrics are:
1111 Understandable
4444 Behavior Changing
2222 Comparative
Active Users vs.
Active Users/month
3333 Ratio / Rate
% Monthly Active
Users
9. If it won’t change
how you behave,
it’s a
bad
metric.
If a metric won’t change
how you behave, it’s a
http://www.flickr.com/photos/circasassy/7858155676/
11. Warm and fuzzy. Cold and hard.
Unstructured,Unstructured,
anecdotal,anecdotal,
revealing, hard torevealing, hard to
aggregate.aggregate.
Unstructured,Unstructured,
anecdotal,anecdotal,
revealing, hard torevealing, hard to
aggregate.aggregate.
Numbers and stats;Numbers and stats;
hard facts but lesshard facts but less
insight.insight.
Numbers and stats;Numbers and stats;
hard facts but lesshard facts but less
insight.insight.
Qualitative
vs.
Quantitative
13. Do hosts withDo hosts with
professionalprofessional
photography getphotography get
more business?more business?
Do hosts withDo hosts with
professionalprofessional
photography getphotography get
more business?more business?
Airbnb experiments...
14. Professional photography helps Airbnb’s business
Gut instinct
Concierge MVP
20 photographers in the field
Test results
Two to three times more bookings!
Back to the beginning
Use additional data to keep experimenting
16. Historical metricHistorical metric
that shows you howthat shows you how
youyou’’re doing:re doing:
reports the news.reports the news.
Historical metricHistorical metric
that shows you howthat shows you how
youyou’’re doing:re doing:
reports the news.reports the news.
Number today thatNumber today that
shows a metricshows a metric
tomorrow:tomorrow: makesmakes
the news.the news.
Number today thatNumber today that
shows a metricshows a metric
tomorrow:tomorrow: makesmakes
the news.the news.
Try and get here.Start here.
Lagging Leading
vs.
19. The metric will change over time, but
right now you need to FOCUS.
20. So how do you do it?So how do you do it?So how do you do it?So how do you do it?
http://www.flickr.com/photos/horiavarlan/4290549806/sizes/l/in/photostream/
21. Your Business + Stage
What business areWhat business are
you in?you in?
What business areWhat business are
you in?you in?
What stage areWhat stage are
you at?you at?
What stage areWhat stage are
you at?you at?
• E-Commerce
• SaaS
• Free Mobile App
• 2-Sided Marketplace
• Media
• User-Generated Content
• Empathy
• Stickiness
• Virality
• Revenue
• Scale
22. GROWTHRATEGROWTHRATEGROWTHRATEGROWTHRATE
Lean Analytics
Stages
II’’ve found a real, poorly-met need that ave found a real, poorly-met need that a
reachable market faces.reachable market faces.
II’’ve found a real, poorly-met need that ave found a real, poorly-met need that a
reachable market faces.reachable market faces.
II’’ve figured out how to solve the problemve figured out how to solve the problem
in a way they will adopt and pay for.in a way they will adopt and pay for.
II’’ve figured out how to solve the problemve figured out how to solve the problem
in a way they will adopt and pay for.in a way they will adopt and pay for.
II’’ve built the rightve built the right
product/features/functionality that keepsproduct/features/functionality that keeps
users around.users around.
II’’ve built the rightve built the right
product/features/functionality that keepsproduct/features/functionality that keeps
users around.users around.
The users and features fuel growthThe users and features fuel growth
organically and artificially.organically and artificially.
The users and features fuel growthThe users and features fuel growth
organically and artificially.organically and artificially.
II’’ve found a sustainable, scalableve found a sustainable, scalable
business with the right margins in abusiness with the right margins in a
healthy ecosystem.healthy ecosystem.
II’’ve found a sustainable, scalableve found a sustainable, scalable
business with the right margins in abusiness with the right margins in a
healthy ecosystem.healthy ecosystem.
“Gates” needed to move
forward
EMPATHYEMPATHYEMPATHYEMPATHY
STICKINESSSTICKINESSSTICKINESSSTICKINESS
VIRALITYVIRALITYVIRALITYVIRALITY
REVENUEREVENUEREVENUEREVENUE
SCALESCALESCALESCALE
23. • Stage: Empathy / Stickiness
• Model: E-Commerce
• Eco-friendly prints of your photos
• Originally tied specifically to
Instagram and built a custom
InstaOrder feature
Jumping the gun on product
development
24. Optimize for 1st time orders or repeat
purchases?
2x transactions
lower bounce rate
sign-in goals increased
with InstaOrder
Click checkoutClick checkoutClick checkoutClick checkout
Sign into PayPalSign into PayPalSign into PayPalSign into PayPal
Confirmation pageConfirmation pageConfirmation pageConfirmation page
Confirm orderConfirm orderConfirm orderConfirm order
Back to PayPalBack to PayPalBack to PayPalBack to PayPal
Authorize pre-Authorize pre-
approved paymentsapproved payments
Authorize pre-Authorize pre-
approved paymentsapproved payments
Success pageSuccess pageSuccess pageSuccess page
without InstaOrder
Click checkoutClick checkoutClick checkoutClick checkout
Sign into PayPalSign into PayPalSign into PayPalSign into PayPal
Confirmation pageConfirmation pageConfirmation pageConfirmation page
Confirm orderConfirm orderConfirm orderConfirm order
Success pageSuccess pageSuccess pageSuccess page
25. skip steps at yourskip steps at your
own riskown risk
skip steps at yourskip steps at your
own riskown risk
26. Six sample business models
• E-commerce
• SaaS (freemium?)
• Mobile app (gaming)
• Two sided marketplace
• Media
• User generated content
27. The SaaS Customer
Lifecycle
Customer Acquisition Cost
paidpaid directdirect searchsearch womwom inherent
virality
inherent
virality
VISITORVISITORVISITORVISITOR
Freemium/trial offerFreemium/trial offerFreemium/trial offerFreemium/trial offer
EnrollmentEnrollmentEnrollmentEnrollment
UserUserUserUser
Disengaged UserDisengaged UserDisengaged UserDisengaged User
CancelCancelCancelCancel
Freemium
churn
Engaged UserEngaged UserEngaged UserEngaged User
Free user
disengagement
ReactivateReactivateReactivateReactivate
CancelCancelCancelCancel
Trial abandonment
rate
Invite OthersInvite OthersInvite OthersInvite Others
Paying CustomerPaying CustomerPaying CustomerPaying Customer
Reactivation rate
Paid
conversion
FORMER USERSFORMER USERSFORMER USERSFORMER USERS
User Lifetime Value
ReactivateReactivateReactivateReactivate
FORMER CUSTOMERSFORMER CUSTOMERSFORMER CUSTOMERSFORMER CUSTOMERS
Customer Lifetime Value
Viral coefficient
Viral rate
ResolutionResolutionResolutionResolution
Support data
Account CancelledAccount CancelledAccount CancelledAccount Cancelled Billing Info Exp.Billing Info Exp.Billing Info Exp.Billing Info Exp.
Paid Churn Rate
Tiering
Capacity LimitCapacity LimitCapacity LimitCapacity Limit
Upselling
rate
UpsellingUpsellingUpsellingUpselling
DisengagedDisengagedDisengagedDisengaged DissatisfiedDissatisfiedDissatisfiedDissatisfied
Trial OverTrial OverTrial OverTrial Over
28. One Metric
That Matters.
One Metric
That Matters.
How It All Comes Together
The business youThe business you’’re inre inThe business youThe business you’’re inre in
E-Com SaaS Mobile 2-Sided Media UCG
Empathy
Stickiness
Virality
Revenue
Scale
ThestageyouThestageyou’’reatreatThestageyouThestageyou’’reatreat
29. • Stage: Scale
• Model: SaaS
• SEO toolkit (product suite)
• Reduced KPIs to focus on
Net Adds
Moz reduces the KPIs it tracks
30. If Net Adds:If Net Adds:If Net Adds:If Net Adds: Why & Next Steps:Why & Next Steps:Why & Next Steps:Why & Next Steps:
Net Adds = “business health”
indicator
• Was a marketing campaign successful?
• Were customer complaints lowered?
• Was a product upgrade valuable?
• Can we acquire more valuable customers?
• What product features can increase engagement?
• Can we improve customer support?
• Are the new customers not the right segment?
• Did a marketing campaign fail?
• Did a product upgrade fail somehow?
• Is customer support falling apart?
31. What’s your OMTM?
Empathy
Stickines
s
Virality
Revenue
Scale
E-
commerce
SaaS Media
Mobile
app
User-gen
content
2-sided
market
Interviews; qualitative results; quantitative scoring; surveysInterviews; qualitative results; quantitative scoring; surveys
Loyalty,
conversion
Loyalty,
conversion
CAC,
shares,
reactivation
CAC,
shares,
reactivation
Transaction,
CLV
Transaction,
CLV
Affiliates,
white-label
Affiliates,
white-label
Engagemen
t, churn
Engagemen
t, churn
Inherent
virality, CAC
Inherent
virality, CAC
Upselling,
CAC, CLV
Upselling,
CAC, CLV
API, magic
#, mktplace
API, magic
#, mktplace
Content,
spam
Content,
spam
Invites,
sharing
Invites,
sharing
Ads,
donations
Ads,
donations
Analytics,
user data
Analytics,
user data
Inventory,
listings
Inventory,
listings
SEM,
sharing
SEM,
sharing
Transaction
s,
commission
Transaction
s,
commission
Other
verticals
Other
verticals
(Money from transactions)
Downloads,
churn,
virality
Downloads,
churn,
virality
WoM, app
ratings,
CAC
WoM, app
ratings,
CAC
CLV,
ARPDAU
CLV,
ARPDAU
Spinoffs,
publishers
Spinoffs,
publishers
(Money from active users)
Traffic,
visits,
returns
Traffic,
visits,
returns
Content
virality, SEM
Content
virality, SEM
CPE, affiliate
%, eyeballs
CPE, affiliate
%, eyeballs
Syndication,
licenses
Syndication,
licenses
(Money from ad clicks)
35. Identify a key business problem,
pick the OMTM, and get started.
36. Pivot or
give up
Try again
Success!
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 line
in the sand
Pick the OMTM
The Lean Analytics Cycle
Draw a new line
Did we move
the needle?
37. Some interesting benchmarks
Growth
5% / week (revenue or
active users)
Churn
2% / month
Engaged visitors
30% monthly users
10% daily users
Time on site
17 minutes
Page load time
< 5 seconds
CLV:CAC
3:1
Mobile file size
< 50MB
Free to paid
2% of free users
39. 39
Have an idea?
Have a suggestion on the speaker/topics?
Want to know about product events?
LinkedIn Group “Adaptive Marketing”
engage@productleadership.in
www.productleadership.in
Notas del editor
If you ’ re tracking a number that doesn ’ t have the possibility of changing the way you behave it ’ s a bad metric. So think about what you ’ re tracking and ask yourself that simple question.
Here you see our 5 stages and the related gates you have to go through in order to go from one stage to the next. Generally, we believe all startups need to go through these steps. The definition of some things - like Virality - may be different for different startups, because an enterprise software company isn ’ t necessarily going to go viral like we think a consumer application - but the stages are the same. * I ’ ve also put in the corresponding funding buckets that I think make sense. There ’ s some gaps in-between, and this is a broad generalization, but it helps me think about what stage I need to be, what do I have to have had accomplished in order to go out and raise the right money.
We have a lot of case studies in the book. Buffer is a good example of a company that ’ s gone through the Lean Analytics stages in a fairly prescriptive order. Buffer is a social sharing app. Now they're focused primarily on customer acquisition, but it didn't start that way.
Building a more advanced purchasing system that sacrificed first- purchase simplicity for long-term ease of repeat purchases seemed like a good idea, but it was premature. This early in the company ’ s life, the question was “ Will people buy prints? ” and not “ Will we have loyal buyers? ” The feature the team had built was de-risking the wrong question. Always know what risk you ’ re eliminating, and then design the minimum functionality to measure whether you ’ ve overcome it.
Not every startup goes through things in the exact same order, we get that. But we ’ve seen a lot of startups try and jump ahead and screw themselves. Often times with consumer applications they focus on viral growth and user acquisition before they know if what they’re doing is even going to work, if it’s Sticky. * Again, I think investors share some of the blame here because of the pressure for consumer applications to grow widly. And in some cases, even when they do, people don ’t believe it’s real -- they see something as a fad -- and so they won’t invest or continue to invest. It’s a catch 22 spot for entrepreneurs.
change to Moz
As you move through the stages of Lean Analytics, the KPI you ’ re trying to fix will shift. Here are some examples.
