By now you've probably heard enough times the importance of metrics. In the initial stages of a startup there isn't a lot of data, so we need to get some! There are some crucial initial steps you need to take to get set and collect metrics. In this talk I'll present how to take an initial snapshot, setup some initial metrics to track your progress, align them with milestones, and how you can use those metrics to guide your decision making and spend your limited time wisely.

1. Metrics that Matter
Poornima Vijayashanker
EIR @ 500 Startups
October 21, 2014
1

2. Agenda
• What are metrics and analytics
• Methods of collecting metrics
• Types of metrics
• One metric that matters
2

3. What are metrics?
3

4. “
A business metric is any type of
measurement used to gauge some
quantifiable component of a company’s
performance such as ROI, churn rate, etc.
”
4

5. “
Analytics is the discovery and
communication of meaningful
patterns in data.
”
5

6. Why do we need
analytics & metrics?
6

7. Uncertainty.
7

8. A startup is an
experiment.
8

9. Experiments needs a
hypothesis & results!
9

10. Vanity metrics.
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11. Almost anything you read on
TechCrunch.
11

12. “ We send out 10M emails daily!
”
“ We received 1M likes overnight!
”
12

13. What are good
metrics?
13

14. 1. Comparative
2. Understandable
3. Ratio
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15. What will I do differently based on
this information?
- Lean Analytics
”
“
15

16. Total sign ups - Vanity Metric
vs.
Total active user - Actionable Metric
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17. Qualitative vs. Quantitative
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18. Sometimes
you have to
pick up the
phone!
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19. KPIs: Key Performance Indicator
19

20. Leading vs. Lagging
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21. Cohort
A/B
Multivariate
Similar groups over time.
Lots of data.
Testing all variables at once.
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22. Average revenue for 5 months as we add features, and
refine product.
January February March April May
Total
Customers 1,000 2,000 3,000 4,000 5,000
Avg Revenue
Per Customer $5.00 $4.50 $4.33 $4.25 $4.50
Table 2-1 from Lean Analytics.
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23. What is this data
telling us?
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24. Cohort Analysis of revenue data. Horizontal axis
are cohorts (e.g. January cohort).
Month of Use
January February March April May
New Users 1000 1000 1000 1000 1000
Total Users 1000 2000 3000 4000 5000
Month 1 $5.00 $3.00 Cohort $2.00 Analysis
$1.00 $0.50
Month 2 $6.00 $4.00 $2.00 $1.00
Month 3 $7.00 $6.00 $5.00
Month 4 $8.00 $7.00
Month 5 $9.00
Table 2-2 from Lean Analytics.
Spending
less
initially.
Spending
increases.
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25. AARRR
25

26. Marketing
Metrics
Product
Metrics
Customer
Metrics
Pricing
Metrics
26

27. Marketing
Metrics
Product
Metrics
Customer
Metrics
Pricing
Metrics
27

28. Need to figure out appropriate metric for each.
website
Market Channels
e-mail campaigns
offline
social media
28

29. Possible Reach in Channel
Actual Reach
Sign Up for Trial
Active
Paying
Long Term Paying
Funnel per Channel
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30. Marketing
Metrics
Product
Metrics
Customer
Metrics
Pricing
Metrics
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31. Sign up for product
Try out product
Actively use product
Convert to Paid
Refer more users
Funnel for Product
31

32. Funnel depends on type of product.
32

33. Services that are used constantly but with a
specific purpose.
Daily
33

34. Frequently used products with a number of use
cases.
Daily
34

35. Less frequently used product with a specific use
case.
Yearly? Possibly monthly.
35

36. Frequency of use (engagement),
use case, and appeal impact
adoption.
36

37. What features trigger
conversions?
37

38. How can you create an
experience that will
set off those triggers?
38

39. Install it!
39

40. • Understand place of features in your product.
• Look at the frequency of their usage.
• Does one feature lead to the usage of another
• Can you constrain UX to improve adoption?
• Can issues reported or requests be monetized?
40

41. Marketing
Metrics
Product
Metrics
Customer
Metrics
Pricing
Metrics
41

42. •# of customers
•Recency
•Retention Rate (churn rate)
•LTV (lifetime value)
•Customer Acquisition Costs
•Customer Profitability
•Net Promoter Score
42

43. •Prospects
•First-time Buyers
•Early Repeat Buyers
•Core Customers
•Core Defectors
43

44. Oh it ain’t no lie, your
churn rates make the
users go BYE BYE BYE!
“
” - Sean P.
44

45. One metric that matters.
45

46. • Most important question you have.
• Draw a line.
• Focuses entire company.
• Encourages a culture of experimentation & small
failures.
46

47. •How many new customers do you need?
•How many new customers per week (per
acquisition channel) do you think define a level of
success?
• Level of success being that which gets you to
the next stage.
47

48. Take a snapshot today!
Marketing & product.
48

49. Marketing activities change.
$0 $1K
$5K $10K
$10K $100K
Customer costs change.
49

50. Exercise!
50

51. Exercise #1
• Come up with 1 metric.
• Ask yourself, “How will our current activities
meet or achieve that metric?”
• Cut out the activities that don’t or put
them on the back burner.
• Email me your metric and activities
(poornima@500.co) or come to my office
hours on Friday @ 12-1pm.
51

52. Review
• What are metrics and analytics
• Methods of collecting metrics
• Types of metrics
• One metric that matters
52

53. Appendix.
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54. Metrics based on business model
• E-Commerce Site
• Get to shopping cart.
• Reduce abandonment!
• SaaS
• Monthly subscription
• Conversion v. cancellation rate
• Marketplace
• transaction fee
• connecting buyers & sellers
• Mobile App
• discovery
• in-app purchases
• upgrading to paid app
• Media
• engagement with content
54