This document provides an overview of key metrics and analytics for startups. It discusses the importance of tracking actionable metrics over vanity metrics to drive business decisions. Some key metrics discussed include activation rates, retention, churn, viral coefficient, net promoter score, revenue, and cost of customer acquisition. It also covers different types of metrics relevant for different business models like e-commerce, SaaS, and mobile apps. Cohort analysis and funnel analysis are presented as useful frameworks for analyzing user behavior and engagement over time.
2. BLAZ KOS
• 10+ years working with start-ups
• Management of university incubator, technology park and business angel network
• Management of two start-up accelerators and co-working space
• PODIM Conference – one of the biggest conferences in Alps-Adriatic region
• 600+ lectures in CEE
• Mentored over 300 start-ups
• Two handbooks about startups, 1500+ pages on two blogs
I am on a life mission to make the world a more innovative, organized and transparent place to be by
helping individuals, organizations and communities achieve their peak potential and an entirely new level of
performance.
11. A match between product and
market segment that results in
high growth or high demand.
PRODUCT
MARKET FIT
12. “In a great market - a market with lots of real
potential customers – the market pulls product
out of the start-up”
“Conversely, in a terrible market, you can have
the best product in the world and an
absolutely killer team, and it doesn't matter -
you're going to fail.“
Marc Andreesen
You don‘t have to ask the question
14. AFTER PRODUCT – MARKET FIT
• Building a robust, feature-rich product
• Crossing the chasm
• Designing for virality & scalability
• Scaling a sales force
• Challenges with corporate partnerships
• Building a brand
• Scaling the exec team
• Metrics, analytics, funnels
15. Metrics reduce arguments based on opinion
Measure first, then manage/change
Answers about what really works
What you allow, you encourage
Metrics drive behaviour
INSTINCTS ARE EXPERIMENTS.
DATA IS PROOF.
Source: Lean Analytics
17. • The only metrics that entrepreneurs should invest
energy in collecting are those that help them make
decisions.”
— Eric Ries, The Lean Startup
VANITY METRICS
ACTIONABLE METRICS
18. If all metric does it stroke your
ego, it won‘t help.
WHAT WILL I DO
DIFFERENTLY BASED ON
THIS INFORMATION?
If you can‘t answer the question
you probably should not worry
about the metric too much.
19. If you don‘t know
which metrics
would change your
organization‘s
behavior,
you aren‘t data-driven.
20. Examples of Vanity Metrics
• Number of visits
• 1 person, 100 times or 100 people, 1 time
• Number of unique visitors
• What they did?
• Number of likes
• Time on site, number of pages
• What if it is complants page?
• Emails collected
• Will they do what you tell them?
• Downloads
• Activation, account creation,… Source: Lean Analytics
22. Good metrics
• Comparative
• Understandable
• Ratio (1:5) or rate (per sth)
• Changes your behavoiur
• Otherwise you waste your time
• Fool yourself in false progress
Source: Lean Analytics
23. Actionable metrics
• Success at your core business
• Directly relates to revenue
• Track individual customers
• Illustrate cause and effect
• Lead you to what to do next
Source: Lean Analytics
24. Actionable metrics aren‘t
magic. They won‘t tell you
what to do.
The point is that you‘re
doing something based on
the data you collect.
25. An organization drowning in data is little better off than
one without data.
Capture everything, but focus on
what‘s important.
26. On what to focus?
• Riskiest areas of your business
• Clear goals
• Focuses entire company
• Inspires a culture of experimentation
27. Using data to optimize one part of
your business, without stepping back
and looking at the big pictue, can be
dangerous or even fatal.
• Public image
• Long term goals
28. OMTM (Changes over time)
• It answers the most important question you have
• It forces you to draw a line in the sand
• It focuses the entire company
• It inspires the culture of innovation
Simple (number)
Immediate (generate it every night)
Actionable (change behaviour)
Comparable (track it over time)
29.
30. 10 COMMON PITFALLS
• Assuming the data is clean (check the data)
• Not normalizing (comparing apples to apples)
• Excluding/Including outliers (qualitative perspective)
• Ignoring seasonality
• Ignoring size when reporting growth (beginnings)
• Data vomit (no focus)
• Metrics that cry wolf (to sensitive trash holds)
• The „Not Collected Here“ syndrome (mashing up)
• Focusing on noise (bigger picture)
Source: Lean Analytics
33. Best – preforming (%)
Largest – volume (#)
Lowest – cost ($)
1
ACQUISITION
CHANNEL
34. ACTIVATION
From signup to their first happy experience of your product
• Customers use product for first time
• Entry page
• First user experience
• Product features
• ACTIVATION GOALS: Click on something, Sign Up,…
• Uptime, Page Load Time, Absence of bugs
• Feature Set
• Usability & Design
• Pages per visit, Time on site, Conversion
2
Source: Dave McClure
35. ENGAGEMENT – STICKINESS
RETENTION
• KPI
• Customer retention (what % comes back)
• Churn rate
• Usage frequency
• One of the best predictors of success
• Tactics to bring them back
• Alerts, blogs, E-mail, Social networks,…
3
Source: Dave McClure
37. RETENTION MANAGEMENT
• It takes 6 – 7 customers to replace existing one
• If you can stop that one customer per leaving, you have
doubled your revenue and cut your cost od customer
acquisition in half
• Companies who put in a customer retention program
are 50% - 95% more profitable
• Increasing retention (LTV) directly decreases CAC.
Moving from 1% to 2% retention doubles revenue and
halves CAC.
3
Source: Lean Analytics
38. How would you feel if you
could no longer use this
product or service?
If 40%+ of people say they‘d be very disappointed to
lose the service, you‘ve found a fit, and it‘s time to
scale.
3
39. REFERRAL - VIRALITY
• Viral coefficient
• The number of new users that each user brings on
• Viral cycle time
• Speed with which a user invites another
• Type of virality
• Inherent: Built into product
• Artificial: Forced through reward system
• Word-of mouth: Satisfied users
4
Source: Dave McClure, Eric Ries
40. REFERRAL – VIRALITY
What % of users recommend you
• Make it easy for them to spread the word
• Referral mechanisms
• Social Media Sharing
• Invite a friend type mechanics
• App Reviews
• Word of mouth, Contests
• Affiliates
• E-mails, Widgets, Viral loops
4
Source: Dave McClure
41. NET PROMOTER SCORE
• How likely is that you would recommend our
company to a friend or colleague on a scale from 0 –
10?
• Promoters (9 – 10)
• Passives (7 – 8)
• Detractors (0 – 6)
• NPS = % Promoters - % Detractors
• NPS = 0 is good, NPS + 50 is excellent
4
42. REVENUE
• What % of users become paying customers
• Business Model
43. Metrics depand on your
business model
In every industry you have typical business models.
• E-commerce
• SaaS
• Advertising
• In-app purchases
• User generated content (social media)
• Two-sided marketplace
Source: Lean Analytics
44. E-commerce
• Conversion rate: N of visitors who buy sth
• Purchases per year: N of purchases made by each customer per year
• Average shooping chart size: Amount of money spent on a purchase
• Abandonment: % of people who begin to make a purchase, then don‘t
• CAC: Money spent to get soo to buy sth
• LTV: Revenue per customer
• Top keywords driving traffic to the site
• Top Search Terms
• Recommendation Engine: Added recommended produst
• Virality: Sharing per visitor
• Mailing list effetivnes
Source: Lean Analytics
45. Saas
• Attention: Attracting visitors
• Enrollment: Free trial
• Stickiness: Usage of product
• Conversion: Paying customers
• Revenue per customer: Money from customer in a time period
• CAC: Cost of getting a paying user
• Virality: Customers spreading the word
• Upselling: How often customers increase spending
• Uptime and reliability
• Churn: How many users leave in a given time period
• LTV: Worth of customers from cradle to grave
Source: Lean Analytics
46. Advertising
• Audience: How many people visit the site
• Unique visitors
• Engagement
• Churn: How loyal is the audience
• Ad Inventory: N of impressions that can be monitized
• Number of unique page views
• Ad rates (Cost per engagement): How much can a site make
• CTR: Impressions turnes into money
• Content/Advertising Balance: The balace of ad inventory rates and content
that maximizes overall performance.
Source: Lean Analytics
47. Free Mobile Application
(gatekeeper hampers experimentations)
• Business model: Downloadable content, New features (character appearance, advantages,…),
elimination of countdown timers, Upselling to a paid version, in-Game Adds
• Dawnloads
• CAC
• Launch rate: Downloaded, launch it, created account
• % of active users: DAU and MAU, daily/monthly active users
• % of paying users
• Time to first purchase
• APRU: Average monthly revenue per user
• Ratings click through: % of users who put a ration or a review
• Virality
• Churn
• LTV
Source: Lean Analytics
48. User Generated Content
• Number of engaged visitors: Stickiness
• Day to week ration: How many today‘s vistors were on the site erlier in the week
• Content creation
• Engagenemtn funnel changes: How fast are becoming more engaged
• Value of created content: Media Clicks
• Content sharing and virality
• Notification effectivness
Source: Lean Analytics
49. Two Sided Market
• Buyer and seller growth
• Inventory growth: New listings, completeness of listings
• Search effectivness
• Conversion funnels and what helps sell items
• Ratings and signs of fraud
• Pricing metrics for bidding methods
Source: Lean Analytics
50. COHORT ANALYSIS
COHORT = Group of users
Helps to measure user
engagement over time.
Growth -> Engagement
Users who join you in the first week will have a different
experience from those who join later on.
54. POST LAUNCH GOAL
Increase LTV = Improve value to customer
• Add features
• Improve features
• Remove features
• Find and foster loyalty behaviours
Decrease CAC
• Changes to messaging
• Changes to marketing channels
• Match experience and marketing
• Optimize customer acquisition
• Optimize funnel
• Experience for new users
61. (sources and references) Learn More
Steve Blank
@sgblank
http://steveblank.com/
Eric Ries
@EricRies
http://startuplessonslearned.com/
Ash Maurya
@ashmaurya
http://ashmaurya.com/
Dave McClure
@davemcclure
http://davemcclure.com/
Alex Osterwalder
@AlexOsterwalder
http://alexosterwalder.com
Brad Feld
@bfeld
http://feld.com/