How to be a Web 2.0 Metrics Jedi (Web 2.0 Expo, April 2009)

Become a Web 2.0 Jedi: How to Use the Force of Product & Marketing Metrics to Optimize Your Business Web 2.0 Expo Apr 3, 2009 #w2e #metrics

Startup Metrics for Pirates: AARRR! Web 2.0 Expo SF April 2009 Dave McClure, Founders Fund http://www.foundersfund.com/ http://500hats.typepad.com/ http://slideshare.net/dmc500hats/

Startup Metrics: The Basics ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Web 2.0: Hell Yes , Good Times. ,[object Object],[object Object],[object Object],[object Object],[object Object]

The Startup Metrics Religion ,[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],$$$

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]

Startup Metrics for Pirates: AARRR! ,[object Object],[object Object],[object Object],[object Object],[object Object],(note: If you’re in a hurry, watch 5 min video after slide 23) 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

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

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.

3 Core Models: biz model, conversion dashboard, mktg channels ,[object Object],[object Object],[object Object],[object Object]

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

The 1-Page Business Model (Users + Conversions + Priorities) ,[object Object],[object Object],[object Object],[object Object],[object Object]

TeachStreet Metrics v1: Eye Chart Madness

TeachStreet 1-Page Business Model: Teachers & Students Teachers Students Activation ,[object Object],[object Object],[object Object],[object Object],Retention ,[object Object],[object Object],Referral ,[object Object],[object Object]

TeachStreet: 45-day Claim Rates ( Seattle , Portland )

Role: Product / Engineering ,[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

Summary ,[object Object],[object Object],[object Object],[object Object],[object Object]

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

Dan Olsen CEO, YourVersion Web 2.0 Expo Apr 3, 2009 How to Use the Force of Metrics to Optimize your Web 2.0 Product

The Force of Metrics is Real The Force of Metrics? Really?

[object Object],Define the Equation of your Business “Peeling the Onion” Unique Visitors x Ad Revenue per Visitor Impressions/Visitor x Effective CPM / 1000 Visits/Visitor x Pageviews/Visit x Impressions/PV New Visitors + Returning Visitors Invited Visitors + Uninvited Visitors # of Users Sending Invites x Invites Sent/User x Invite Conversion Rate Copyright © 2009 Olsen Solutions LLC

[object Object],[object Object],How to Track Your Metrics ,[object Object],[object Object],[object Object],[object Object],[object Object],Copyright © 2009 Olsen Solutions LLC Date Unique Visitors Page views Ad Revenue New User Sign-ups … 4/24/08 10,100 29,600 25 490 4/25/08 10,500 27,100 24 480 …

Marrying UI Design with Metrics ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Improving Sign In/Registration Flow Copyright © 2009 Olsen Solutions LLC Open Account Sign in Account Selection Register 56% 44% Forget Password Registration Process 45% drop off (20% of total) 36% overall drop off for this step 70% (32% of Total) 17% drop off (10% of total) 20% drop off (6% of total) 30% (14% of Total) 80% (26% of Total) 55% (24% of Total) 64% of Total Change Password 83% (46% of Total)

Optimization through Iteration: Continuous Improvement Copyright © 2009 Olsen Solutions LLC Measure the metric Analyze the metric Identify top opportunities to improve Design & develop the enhancement Launch the enhancement ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

[email_address] @danolsen www.yourversion.com May the Force of Metrics be with you!

Dogster, Inc. Case Study Ted Rheingold blog.dogster.com / @tedr How actionable metrics informed us we were chasing our tail the wrong key results yet still guided us to the primary objective … bacon making money

Dogster, Inc. ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Marketing Initiative Feb ‘07 Goal: 2,000 New Registrants a Day ,[object Object],[object Object],[object Object],[object Object],[object Object]

Quantitative Success Doesn’t Mean Qualitative Success ,[object Object],[object Object],[object Object],[object Object]

Actionable Results ,[object Object],[object Object],[object Object]

Ted Rheingold Top Dog, Dogster, Inc. blog.dogster.com twitter: @tedr Web2Expo - 2009

Questions? #metrics @davemcclure @danolsen @tedr

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]

Be Bold. Be Humble. ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Passion vs. Precision ,[object Object],[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]

Design, Optimize for Conversion

Kano Model: User Needs & Satisfaction Copyright © 2008 Olsen Solutions LLC User Satisfaction User Dissatisfaction Performance (more is better) Delighter (wow) Need not met Need fully met Must Have Needs & features migrate over time

Olsen’s Hierarchy of Web User Needs (adapted from Maslow) Copyright © 2008 Olsen Solutions LLC Is the site up when I want to use it? Is the site fast enough? Does the functionality work? Does the functionality meet my needs? Customer’s Perspective What does it mean to us? Uptime Page Load Time Absence of Bugs Feature Set Usability & Design Decreasing Dissatisfaction Increasing Satisfaction How easy to use is it?

Adding Metrics and Optimization to your Product Process Copyright © 2008 Olsen Solutions LLC Plan Design Develop Business Objectives Product Objectives Prioritized Feature List Scoping Requirements & Design Code Test Launch Site Level Feature Level Optimize Metrics & User Feedback

Using Metrics to Optimize the Equation of your Business ,[object Object],[object Object],[object Object],[object Object],[object Object],Copyright © 2008 Olsen Solutions LLC Return Investment Return Investment Return Investment Metric A Good ROI Metric B Bad ROI Metric C Great ROI

How to be a Web 2.0 Metrics Jedi (Web 2.0 Expo, April 2009)

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How to be a Web 2.0 Metrics Jedi (Web 2.0 Expo, April 2009)