[500distro] measuring for saas monetization: choosing metrics, running experiments & deciding...
TRANSCRIPT
Jean-Denis Greze (@jgreze)
OutlinePart I: What is growth?
Part II: Metrics
Part III: Growth & engagement in practice
CONFIDENTIAL
At a minimum… Getting people to your page
A great logged-out experience
Signup
On-boarding
Engagement & Retention*
Virality
* pre-condition (but LinkedIn)
CONFIDENTIAL
Growth = data driven It’s just an approach to solving problems that should permeate all of your decisions
Warning: as you growth, you need an increasingly strong advocate for the data-driven approach. That’s your growth team.
Jean-Denis Greze (@jgreze)
Growth v. product: avoid holy wars
At Dropbox, extremes on both sides
Growth v1: pure bizops, number crunching, optimized parts of the funnel but never changed the experience as a whole
Growth v2: design something “perfect” that resonated well during user studies but not worried about numbers
Monetization got it right (Team Ca$h, Prowth)
Jean-Denis Greze (@jgreze)
Don’t think smallDon’t just reduce steps / friction
Don’t forget that there are fundamental human problems to people understanding, seeing a need for, coming back to, and adopting your product into their daily lives.
Jean-Denis Greze (@jgreze)
Understanding the user journey
Acquisition
Activation*
Engagement
Virality
* Don’t forget me
Jean-Denis Greze (@jgreze)
ViralityVirality that drives growth
Users bringing in non-users
Virality that drives engagement
Users bringing in other existing users
Think about this stuff from day 1: it’s hard to add vitality after-the-fact
Jean-Denis Greze (@jgreze)
MetricsBe way of *AU (DAU, WAU, MAU, 3MAU)
You have different kinds of active users (e.g., sync users v. backup users)
Activity is a means to an end — what is your business model?
Measure activation
Facebook’s “7 friends in 10 days”
Figure out the highest predictors of retention
Signin up != active
Jean-Denis Greze (@jgreze)
Actually, why metrics?Obvious: goals to aim for
Less obvious: communication (makes it easy to explain what you are going to VCs, the rest of your organization, etc.)
Jean-Denis Greze (@jgreze)
Revisit your metrics oftenExamples
Two sharing models at Dropbox
Email subject lines
Referral at Dropbox
If you don’t always pay attention, you will make bad product decisions
Ask yourself: “Is the funnel I am looking at the real and current funnel?”
Jean-Denis Greze (@jgreze)
$aaS (I)Should growth look at metrics through monetization?
No (maybe?)
Dropbox example: free space as cost
Free users as happy people deriving benefit
Free users as cost-center
Free users as potential self-serve revenue
Free users as qualified leads (sales)
CONFIDENTIAL
$aaS (II) Monetization like growth is data-driven, but it’s purview is turning existing users into paying users
Jean-Denis Greze (@jgreze)
A/B testing (I)One rule: statistical significance is hard (you don’t have enough exposures)
When you are a startup, go for big wins and don’t worry about small optimizations: they won’t be the difference between a sustainable startup and a failing one
Jean-Denis Greze (@jgreze)
A/B testing (II)A/B tests do not understand your users
“With this variant, a user is more likely to click on X”
You don’t know “why” or “what the user is thinking”
If you want to understand your users (a little bit), conduct user research
Jean-Denis Greze (@jgreze)
Easy v. difficult (anecdotal)Hard
Reactivating dormant users
Making your product awesome by changing a button color
Easy
Going from nothing to something
No onboarding to onboarding
No email reminders to email reminders (or notifications)
Focusing on channels that are already doing well and bringing in high-value AUs
Jean-Denis Greze (@jgreze)
Virality templates (I)Big splash
Dropbox space race
NYTimes dialect quiz
Trade your product for “shares” (i.e., the Dropbox model)
Referrals -> free space
E.g., Uber
Jean-Denis Greze (@jgreze)
Virality templates (II)Achievements
Broadcast something that makes your user look good or interesting
E.g., Foursquare, fitness apps
Caveat: Signing up is not an achievement
Jean-Denis Greze (@jgreze)
Virality templates (III)Network building
E.g., Facebook, WhatsApp
If you have this… I’d love to invest
Pro-tip: your users’ phone contacts / address book is the best way to kickstart this
Only takes 1 permission, cost to you is small (SMS / user), no one controls it (yet)
Network riding (e.g., Airbnb, Instagram & Twitter)
Jean-Denis Greze (@jgreze)
Virality templates (IV)Word of mouth
Content
SEO
Partnerships
E.g., Chrome (really?)
Jean-Denis Greze (@jgreze)
Progressive engagementActivity & quality
Activity: 3MAU to MAU or MAU to WAU
Quality: MAU -> high-value MAU
E.g., reminder to get users to complete actions
People forget what they are doing
E.g., have one set of users re-engage another set
Tip: opt-in beta program
Jean-Denis Greze (@jgreze)
Growth & freemium$aaS: Cost of giving your product for free v.
Ads, outbound sales, paid-for leads, partnerships
It’s not just self-serve!
Freemium for growth:
Trade for vitality (shares)
Trade for better UX (address book makes it easier for your users to share in the future)
Trade for a better product (upload all of your photos makes albums better)
Jean-Denis Greze (@jgreze)
Gating freemiumWhen do you break things and ask people to pay you?
Usage (e.g., space)
Social (# of people you are collaborating with)
Content type (Word v. Excel)
Functionality for subset of users (e.g., IT)
Make sure the subset has purchasing power
Time-bounded
Experiment early (you can have multiple gates)
Jean-Denis Greze (@jgreze)
Parting adviceEvery company/situation is different
Be wary of learning specific lessons from Dropbox, Google, Square, Github, etc.
We may be optimizing for very different things
We may not be optimizing (things going too well)
We may be stuck at a local maxima
Get ideas, test them, talk to others, be creative, etc.