Regression analysis: Simple Linear Regression Multiple Linear Regression
Ā
Startup Metrics (Ignite Velocity)
1. Startup Metrics for Pirates
ā¢āÆ Acquisition: users come to site from various channels
ā¢āÆ Activation: users enjoy 1st visit: quot;happyā experience
ā¢āÆ Retention: users come back, visit site multiple times
ā¢āÆ Referral: users like product enough to refer others
ā¢āÆ Revenue: users conduct some monetization behavior
AARRR!
Dave McClure, Master of 500 Hats
http://500hats.typepad.com/
http://www.500hats.com/
http://slideshare.net/dmc500hats/
2. AARRR!: 5-Step Startup Metrics Model
SEO Campaigns,
SEM PR Contests Biz
Social
Networks Dev
Blogs Affiliates
Apps & Direct, Tel,
Widgets Email TV
Domains
1.Ā ACQUISITIONĀ ViralĀ
LoopsĀ
EmailsĀ &Ā AlertsĀ Homepage / Emails &
widgets
Landing Page
Product
Blogs,Ā RSS,Ā
on Aļ¬liates,Ā
NewsĀ FeedsĀ
e t enti Features ContestsĀ
3. R
Ads,Ā LeadĀ Gen,Ā Biz Dev
SystemĀ EventsĀ &Ā Subscriptions,Ā
TimeābasedĀ FeaturesĀ
ECommerceĀ
Website.com
3. Why Be a Web 2.0 Entrepreneur?
ā¢āÆ Low Cost
ā¢āÆ Lots of Users
ā¢āÆ Online Advertising / E-Commerce
ā¢āÆ Online Metrics
ā¢āÆ Itās Cool.
ā¢āÆ Make MONEY.
4. Q: Whatās My Business Model?
Can be one of the following:
1.āÆ Get Users (= Acquisition, Referral)
2.āÆ Drive Usage (= Activation, Retention)
3.āÆ Make Money (= Revenue*)
* ideally profitable revenue
Note: eventually need to turn Users/Usage -> Money
5. Role: Founder/CEO
Q: Which Metrics? Why?
A: Focus on Critical Few Actionable Metrics
(if you donāt use the metric to make a decision, itās not actionable)
ā¢āÆ Hypothesize Customer Lifecycle
ā¢āÆ Target ~3-5 Conversion Metrics (tip: Less = More)
ā¢āÆ Test, Measure, Iterate to Improve
ā¢āÆ Delegate Each Key Metric to someone to OWN
6. Role: Product / Engineering
Q: What to Build? Why?
A: Build Features that Increase Conversion
ā¢āÆ Wireframes = Conversion Steps
ā¢āÆ Measure, A/B Test, Iterate FAST (daily/weekly)
ā¢āÆ Optimize for Conversion Improvement
āāÆ 80% on existing feature optimization
āāÆ 20% on new feature development
7. Example Conversion Metrics
(note: *not* actualsā¦ your mileage may vary)
Category Conversion Status Conv % Est. Value
Acquisition Visit Site 100% $.01
(or landing page, or external widget)
Acquisition Doesn't Abandon 70% $.05
(views 2+ pages, stays 10+ sec, 2+ clicks)
Activation Happy 1st Visit 30% $.25
(views X pages, stays Y sec, Z clicks)
Activation Email/Blog/RSS/Widget/Acct Signup 5% $2
(anything that could lead to repeat visit)
Retention Length of Session / # of Clicks 10% $1
(length/intensity of engaged visit, >180s)
Retention Email Open/ RSS view -> Click/Repeat Visit 3% $5
(3+ visits in first 30 days)
Referral Refer 1+ users who visit site 2% $1
Referral Refer 10+ users who activate 0.2% $10
Revenue User generates minimum revenue 2% $5
Revenue User generates break-even revenue 1% $25
8. Role: Marketing / Sales
Q: What channels? Which users? Why?
A: High Volume (#), Low Cost ($), High Conv (%)
ā¢āÆ Design & Test Multiple Marketing Channels + Campaigns
ā¢āÆ Select & Focus on Best-Performing Channels & Themes
ā¢āÆ Optimize for conversion to target CTAs, not just site/landing page
ā¢āÆ Match/Drive channel cost to/below revenue potential
ā¢āÆ Grab the Low-Hanging Fruit:
āāÆ Blogs
āāÆ SEO/SEM
āāÆ Landing Pages
āāÆ Automated Emails
9. Example Marketing Channels
disclaimer: estimates of vol, cost/user, time & effort are subjective ā actual costs are dependent on your specific business
Channel Volume Cost/user Time to implement Mktg Prod Effort
Effort
Viral / depends on CTA; size of accessible low/zero Low for FB social networks; low low/med
Referral social networks / # users med/hi for normal sites
Email depends on CTA, size of your house low/med Low low/med low/med
lists, email signups (med = create
templates)
Blogs / Depends on # blogs in your low/med Low (if just you blogging); low/med low/zero
Bloggers segment, competitive scenario med (if you're setting up big CMS / (med = CMS, prof
evangelizing to other bloggers) design)
SEO depends on your keywords Low/zero Medium low/zero med/hi
(depends on your search geeks)
SEM depends on your keywords Depends Low/med Low/med low/med
(depends on your marketing) (landing pages = med)
Contest small unless big prize $ low/med low/med Med low/zero
(donāt, keep it under $5K) (depends on contest, site, campaign) (med = prof contest site)
Widget Depends on CTA; size of accessible low/med Low/med med med/hi (depends on
sites, level of adoption + bloggers complexity)
domains depends on keywords, domain costs depends low low Low (redirects/co-
brand?)
PR depends on your business & Med/hi medium (develop story, build contacts) med low/zero
audience & news
Biz Dev / depends on partner, size of med-high med/hi (capture metrics, generate Med/hi med/hi
Partner customer base, conversion reports) (reports, co-branding)
Affiliate / depends on economics Med/hi med/hi (need to build affiliate program, med/hi med/hi (depends on rqd
Lead Gen capture metrics, generated reports) tracking & reporting)
Direct / radio depends on geography Med/hi medium Med/hi low/zero
Telemktg depends on target demographics med-high med-high High low/zero if no system;
Med/hi if integrated SFA
TV Potentially large (if you spend) High Med-high High Med/hi (production cost)
10. Acquisition
SEO Campaigns,
SEM PR Contests
Biz
Social
Networks Dev
Blogs Affiliates
Apps & Direct, Tel,
Widgets Email TV
Domains
1.Ā ACQUISITIONĀ
Marketing Channels:
ā¢āÆ largest-volume (#)
ā¢āÆ lowest-cost ($)
ā¢āÆ best-performing (%)
Website.com
11. Acquisition
Where are users coming from?
Acquisition Methods
ļ¼āÆSEO / SEM
ļ¼āÆBlogs
ļ¼āÆEmail
ļ¼āÆSocial Media &
Social Networks
ļ¼āÆDomains
12. Activation
SEO Campaigns,
SEM PR Contests Biz
Social
Networks Dev
Blogs Affiliates Activation Criteria:
Apps & Direct, Tel,
Widgets Email TV ā¢āÆ 10-30+ seconds
1.Ā ACQUISITIONĀ
Domains ā¢āÆ 2-3+ page views
ā¢āÆ 3-5+ clicks
ā¢āÆ 1 key feature usage
Homepage /
Landing Page
Product
Features
do LOTS of landing page
& A/B tests ā
make lots of dumb
guesses & iterate FAST
Website.com
13. Activation
What do users do on their first visit?
Example Activation Goals
ā¢āÆ Click on something!
ā¢āÆ Account sign up / Emails
ā¢āÆ Referrals / Tell a friend
ā¢āÆ Widgets / Embeds
ā¢āÆ Low Bounce Rate
Activation Tips
ā¢āÆ Less is more
ā¢āÆ Focus on user experience / usability
ā¢āÆ Provide incentives & call to actions
ā¢āÆ Test and iterate continuously
14. Retention
SEO Campaigns,
Automated emails are simple & easy SEM PR Contests Biz
Social
retention (but donāt overdo it) Networks Dev
Blogs Affiliates
ā¢āÆ lifecycle emails @ +3, +7, +30d Apps & Direct, Tel,
Widgets Email TV
ā¢āÆ status emails weekly/monthly
Domains
1.Ā ACQUISITIONĀ
ā¢āÆ event-based emails as they occur
BUT:
ā¢āÆ make it easy to unsubscribe
EmailsĀ &Ā AlertsĀ Homepage /
Landing Page
Product
Blogs,Ā RSS,Ā
on
NewsĀ FeedsĀ
et enti Features
3. R
Tip on emails:
ā¢āÆ > 80% or more on SUBJECT LINE
SystemĀ EventsĀ &Ā
ā¢āÆ < 20% or less on BODY TEXT TimeābasedĀ FeaturesĀ
Website.com
16. Referral
SEO Campaigns,
SEM PR Contests
Biz
Social
Networks Dev
Blogs Affiliates
Apps & Direct, Tel,
Widgets Email TV ViralĀ
Domains
1.Ā ACQUISITIONĀ LoopsĀ
Emails &
widgets
EmailsĀ &Ā AlertsĀ Homepage /
Landing Page
Aļ¬liates,Ā
Product ContestsĀ
Blogs,Ā RSS,Ā n
NewsĀ FeedsĀ
e tentio Features
3. R
Focus on driving referrals
SystemĀ EventsĀ &Ā
TimeābasedĀ FeaturesĀ
*after* users have a
āhappyā experience;
Website.com avg score >= 8 out of 10
17. Referral
How do users refer others?
Referral Methods
ļ¼āÆSend to Friend:
Email / IM
ļ¼āÆSocial Media
ļ¼āÆWidgets / Embeds
ļ¼āÆAffiliates
18. Referral
Viral Growth Factor
Viral Growth Factor = X * Y * Z
X = % of users who invite other people
Y = average # of people that they invited
Z = % of users who accepted an invitation
A viral growth factor > 1 means an exponential organic user acquisition.
19. Revenue
SEO Campaigns,
SEM PR Contests Biz
Social
Networks Dev
Blogs Affiliates
Apps & Direct, Tel,
Widgets Email TV
Domains
1.Ā ACQUISITIONĀ ViralĀ
LoopsĀ
EmailsĀ &Ā AlertsĀ Homepage / Emails &
widgets
Landing Page
Product
Blogs,Ā RSS,Ā
on Aļ¬liates,Ā
NewsĀ FeedsĀ
e t enti Features ContestsĀ
3. R
Ads,Ā LeadĀ Gen,Ā Biz Dev
SystemĀ EventsĀ &Ā Subscriptions,Ā
TimeābasedĀ FeaturesĀ
ECommerceĀ
This is the part *you* Website.com
still have to figure outā¦
(we donāt know jack
about your business)
20. Revenue
How do you make money?
Revenue Tips
ā¢āÆ Donāt rely on AdSense
ā¢āÆ Start Free -> Go Freemium
ā¢āÆ Subscription / Recurring transactions
ā¢āÆ Qualify your customers -> Lead generation (arbitrage)
ā¢āÆ Sell something! (physical or virtual)
21. AARRR!
Any Questions, Ye Scurvy Dogs?
Additional References:
ā¢āÆ āInfluence: The Psychology of Persuasionā, Robert Cialdini (book)
ā¢āÆ āPutting the Fun in Functionalā, Amy Jo Kim (etech 2006 preso)
ā¢āÆ āFuturistic Playā, Andrew Chen (blog)
ā¢āÆ āDonāt Make Me Thinkā, Steve Krug (book)
ā¢āÆ āA Theory of Funā, Raph Koster (book, website)
22. Dave McClure, Master of 500 Hats
http://500hats.typepad.com/
http://www.500hats.com/
http://slideshare.net/dmc500hats/
Hiten Shah, CrazyEgg / ACS / KISSmetrics
http://crazyegg.com
http://acsseo.com
http://KISSmetrics.com
23. Acquisition
Keyword Vocabulary
Top 10 - 100 words
ā¢āÆ Your Brand / Products
ā¢āÆ Customer Needs / Benefits
ā¢āÆ Competitorās Brand / Products
ā¢āÆ Semantic Equivalents
ā¢āÆ Misspellings
Things to analyze
ā¢āÆ Sources
ā¢āÆ Volume
ā¢āÆ Cost
ā¢āÆ Conversion
24. Acquisition
Where are users coming from?
Key Metrics to Track Example
ļ¼āÆQuantity (#)
ļ¼āÆCost ($)
ļ¼āÆConversions (%)
25. Acquisition
Tools
Google Analytics (web analytics)
google.com/analytics
Google Keyword Tool (keyword research tool)
adwords.google.com/select/KeywordToolExternal
SEO Book Tools (SEO related tools)
tools.seobook.com
Resources
SEO Book Blog
seobook.com/blog
The Social Media Manual: Read Before You Play
searchengineland.com/071120-144401.php
Strategies to ruthlessly acquire users
andrewchen.typepad.com/andrew_chens_blog/2007/04/10_obvious_stra.html
26. Activation
What do users do on their first visit?
Key Metrics to Track
ļ¼āÆPages per visit
ļ¼āÆTime on site
ļ¼āÆConversions
Before After
27. Activation
Tools
Crazy Egg (Visual Click Mapping)
crazyegg.com
Google Website Optimizer (A/B & Multivariate Testing)
google.com/websiteoptimizer
Marketo.com (B2B Lead Generation Management)
marketo.com
Resources
Experimentation and Testing: A Primer
kaushik.net/avinash/2005/05/experimentation-and-testing-a-primer.html
Landing Page Tutorials and Case Studies
copyblogger.com/landing-pages/
101 Easy Easy to use Google Website Optimizer
conversion-rate-experts.com/articles/101-google-website-optimizer-tips/
28. Retention
How do users come back?
Example Retention Goals
ā¢āÆ 1 - 3+ visits per month
ā¢āÆ 20% open rate / 2% CTR
ā¢āÆ High deliverability / Low spam rating
ā¢āÆ Long customer life cycle / Low decay
ā¢āÆ Identify fanatics and cheerleaders
Retention Tips
ā¢āÆ Email is simple and it works
ā¢āÆ BUT make unsubscribe easy
ā¢āÆ 80% subject line / 20% body text
ā¢āÆ ACTUALLY 99% subject line / 1% body text
ā¢āÆ Fanatics = virality + affiliate channel (bloggers?)
29. Retention
How do users come back?
Key Metrics to Track Example
ļ¼āÆ Source
ļ¼āÆ Quantity
ļ¼āÆ Conversions
ļ¼āÆ Visitor Loyalty
ļ¼āÆ Session Length
31. Referral
Tools
Gigya (social media distribution & tracking tool)
gigya.com
ShareThis / AddThis (sharing buttons)
sharethis.com / addthis.com
GetMyContacts (PHP contacts importing & invitation software)
getmycontacts.com
Resources
Seven Ways to GO VIRAL
lsvp.wordpress.com/2007/03/02/seven-ways-to-go-viral/
Whatās your viral loop? Understanding the engine of adoption
andrewchen.typepad.com/andrew_chens_blog/2007/07/whats-your-vira.html
Metrics: Where Users Come From
slideshare.net/guest2968b8/rockyou-snap-summit-32508