analytics for startups - 500 startups accelerator marketing hell week
TRANSCRIPT
Andy Young // @andyy // [email protected]
How do I Analytics?a practical guide forpragmatic startups
Andy Young // @andyy // [email protected]
Hi, I’m Andy!@andyy
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Andy Young // @andyy // [email protected]
What do we measure, and why?
Vanity metricsRevenue metrics
Conversion rate metricsPirate metrics..
We need to know how we’re doing.
Andy Young // @andyy // [email protected]
If you're not keeping score there's no point playing the game -
you'll never know if you'rewinning or not
- @distrodom
Andy Young // @andyy // [email protected]
Today’s tools make it super-easy to track
thingsGoogle Analytics
MixpanelLocalyticsKissMetrics
Branch Metrics..
Andy Young // @andyy // [email protected]
Today’s tools make it super-easy to track
thingsBUT they also make it really easy to
- become overwhelmed with data- focus on the wrong things
Andy Young // @andyy // [email protected]
Typical analytics challenges/pitfalls
Drowning in too much data
Failure to select + focus on the top metrics that matter
Not tracking the data you need to answer key questions
Andy Young // @andyy // [email protected]
Why analytics?
1. How are we doing? - are KPIs on the right track?
2. What are the results of our experiments?- so we can learn
3. What’s happening right now?- did something great or terrible just happen?
Andy Young // @andyy // [email protected]
Identify top-level KPI
if you pick the wrong KPIs, you're screwed.
If you pick KPIs and then ignore them, you're screwed.
If you pick and monitor KPIs diligently, but don't assess everything you and your whole team does on the basis of whether your tasks are the most effective way to grow your KPIs, you're screwed.
Andy Young // @andyy // [email protected]
Identify top-level KPI
Keep it simple!
The good news: there’s probably apre-determined answer
forwhat drives your business
Andy Young // @andyy // [email protected]
Identify top-level KPI
There’s probably a pre-determined answer for what drives your business
Spoiler: ultimately it’s $$$
Andy Young // @andyy // [email protected]
How’re we doing?
There’s probably a pre-determined answer for what drives your business
Commerce: # salesSubscription / SaaS: # subscribers
Marketplace: # transactions
Andy Young // @andyy // [email protected]
How’re we doing?
1. Identify top-level KPI2. Next, add nuance
Andy Young // @andyy // [email protected]
How’re we doing?
Nuance behind your top level KPI
E.g. for commerce: # salesNuance: average sale $; # customers
Andy Young // @andyy // [email protected]
How’re we doing?
1. Identify top-level KPI2. Add nuance3. Add drivers
Andy Young // @andyy // [email protected]
How’re we doing?
Drivers behind your top level KPI
E.g. for marketplaces: # transactionsDrivers: # suppliers, # customers
Andy Young // @andyy // [email protected]
How’re we doing?
1. Identify top-level KPI2. Add nuance3. Add drivers
4. Add funnel for these drivers
Andy Young // @andyy // [email protected]
How’re we doing?
1. Identify top-level KPI2. Add nuance3. Add drivers
4. Add funnel for these drivers
End up with AARRR
Andy Young // @andyy // [email protected]
How’re we doing?
1. Identify top-level KPI2. Add nuance3. Add drivers
4. Add funnel for these drivers
Put in a spreadsheet(Template Google Sheet: http://bit.ly/kpi-sheet)
Andy Young // @andyy // [email protected]
How’re we doing?
Put in a spreadsheet
- key KPI at the top, nuance and drivers below, finally the detailed funnel below for reference
- columns for weekly numbers, w/w growth
Andy Young // @andyy // [email protected]
How’re we doing?
Put in a spreadsheet
- review weekly- share with whole team
- set targets- use as a model to predict and prioritize
Andy Young // @andyy // [email protected]
Weekly/Monthly reporting
% week-on-week or month-on-month growthin your
One Metric That Matters
Focus. Set a target.How to choose? Read this Lean Analytics post
Andy Young // @andyy // [email protected]
Other key metrics
Customer Acquisition Cost (CAC)how much you spend (on average) to acquire a
customer
Lifetime Value (LTV)How much revenue $$ an average customer
brings you in all time
Andy Young // @andyy // [email protected]
If yourLTV
is greater than yourCAC
then you’re in business
Andy Young // @andyy // [email protected]
If yourLTV
is greater than 3x yourCAC
then you’re in a good business
Andy Young // @andyy // [email protected]
CAC & LTV: nuances
Payback period: time to recoup CAC
Magnitude of your numberse.g. enterprise vs. social
Andy Young // @andyy // [email protected]
Calculating CAC
Simple approach: total spend / total signups
“50% of the money I spend on advertisingis wasted - the problem is I don't know which half”
- John Wanamaker
Eventual goal: calculate CAC per channel
Andy Young // @andyy // [email protected]
Calculating LTV
Problem!You don’t have a lifetime of data
Measured LTV vs. estimated LTV
Measure actual LTV per cohortExtrapolate revenue curve over time
Andy Young // @andyy // [email protected]
Calculating LTV
Know your definitions!
MRR?! GMV?!
A16Z blog posts: 16 Startup Metrics & 16 MOAR Startup Metrics
Andy Young // @andyy // [email protected]
Andy Young // @andyy // [email protected]
Andy Young // @andyy // [email protected]
Andy Young // @andyy // [email protected]
How not to do Metrics
Outdated information
Just 1 view of your data
Manual calculations
Bad metrics lead you astray
Andy Young // @andyy // [email protected]
Andy Young // @andyy // [email protected]
Andy Young // @andyy // [email protected]
● A16Z: 16 Startup Metrics - and 16 MOAR● Lean Analytics Book - Choosing your OMTM● Josh Elman - The only metric that matters● Dave McClure's Startup Metrics for Pirates● Eric Ries’s Three Engines of Growth● Mark Suster - Why misunderstanding startup
metrics can cost you your business● Intercom - SaaS metrics for fundraising● Social Capital - Accounting for User Growth● Sarah Tavel: Engagement Hierarchy-Core Actions
Further references..