Data Analytics for Startups - Tetuan Valley Startup School Fall 2014

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Metrics: because everything countsJusto Hidalgo@justohidalgoTetuan Valley Startup School FallNovember 12th, , 2014

Hi!Co-founder, Business Dev, Data Analytics

Data Integration and Management, Product Strategy and Innovation

Ph.D. in Computer Science on Data Integration and Web Automation

Ergo: Love Data

@justohidalgo

3A service to read and discover digital books that works on any device

@justohidalgo

5Metrics

Conclusions

Eat pizza

My goals todayMetricA metric is a number.

PERIOD

OK, a Count or a Ratio.

But a number.

PERIOD7

AARRRAcquireActivateRetainReferGet RevenueSEOSEMCampaignsEmailBlogsLanding PageProduct FeaturesContent (blogs, articles, )EmailsAlertsCampaignsEmailsShopping cartSubscriptionsLead GentrafficsocialbusinessBased on Dave McClures AARRR metrics model (http://500hats.typepad.com/500blogs/2007/09/startup-metrics.html)8

Traffic Metrics

http://www.flickr.com/photos/hktang/4243300265/9How do people find your site?Acquisition

@justohidalgoHow you bring people to your siteSEO, SEM, Social Networks, Blogs, Email, Find those channels that bring you the LARGEST QUALIFIED volume, at the LOWEST costwith the best PERCENTAGE

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@justohidalgo12

15 seconds in La 1

Metrics

Number of visitsDistributions (per browser, region, )

Number of page viewsBounce rateHow sticky is your site?AActivation

MetricsTime per page

Time on site# Sign ins!!!Recency (time since user did something meaningful)(and churn as well!!!)

Biggest Apple Reseller in Spain

1-year subscription to 24s per iPad/Mac purchased

@justohidalgoAnd (3) by searching for alternative channels. Ill mention two of them. K-Tuin is the biggest Apple reseller in Spain, and theyre currently offering a 1-year subscription to 24s to every Mac or iPad buyer. Another one is the deal weve reached with a major telco in Spain to offer a similar subscription to their new customers coming from portability.26

Why do users come back?AARetention

How to make your users coming back

Automated emailsAs personalized as possible but up to a limitNon intrusive (easy to unsubscribe)As less commercial-ish as possible

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Number of unique/returning visitors

Visits over time

Average session time

Metrics. The standard ones

D/WAU: Daily/Weekly Active Users

MAU: Monthly Active Users

Stickiness = engagement

D/WAUMAUThis is related to the retention stats: active readers in our case. Stickyness is quite related to social gaming. Dont expect the same degree of stickyness as Facebook or Zynga!!! This is more profound that try to keep it highFaceboks ratio seems to have been > 50% all of the timeAmazons seems to be around 17%24symbols is between 6 and 10% right now.Games and communication apps should have a high ratio as wellE-commerce and other categories have a much lower ratio

http://www.flickr.com/photos/lucasjames123/5040993203/

35# Active readers# Books read per userPages read per active reader per month but also domain-specific!!!

Pages read per paid user per monthUsers becoming digital librarians

Social Metrics

http://www.flickr.com/photos/anirudhkoul/3786725982/38Do people talk about your site?AARReferral

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Amplification rate: (#shares, #RTs, )

K-Factor = AR * conversion rate= 1: steady state> 1: growth 1.4 < x < 2.1 => hot & viral!!!< 1: decline

Virality

http://www.flickr.com/photos/twenty_questions/2192450204/42

@justohidalgo

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Business Metrics

http://www.flickr.com/photos/76657755@N04/6921689726/44Do you make money?AARRRevenue

24s or White LabelMOBILE CARRIERS24symbols.comD2C

Lifetime Value = 100%

LTV

Source: http://blog.kissmetrics.com/how-to-calculate-lifetime-value/ Churn rate

ARPU *

47CAC Ratio=

Bessemer: average ratio of SaaS companies = 0.6Customer Acquisition Cost

gross margin per customersales/marketing costs per customerdivide the NEW annualized net gross margin added during the quarter (gross new CMRR x your average Gross Margin % x 4 quarters; forget the effect of churn for now), by the sales and marketing costs of the previous quarter excluding any account management costs attributed to your "farmer" organization48Of course, LTV > CACBut, moreover: LTV > 3x CACLTV vs CAC

Conclusions

1. Measure from Day 1

@justohidalgo

2. Have someone taking care of it

DATA SCIENCE

SO EASY A CAVEMAN CAN DO IT#ELS2014

http://nirvacana.com/thoughts/becoming-a-data-scientist/56

AND NOW

BUSINESS-SAVVY!!!

@justohidalgohttp://rlv.zcache.com/little_unicorn_with_pink_mane_tie-r63d74334bf074562988a6286e0081cdb_v9whb_8byvr_324.jpg583. Only measure what you truly care about

@justohidalgohttp://www.flickr.com/photos/qualityandstyle/4628275080/

Ockhams razor,also spelledOccams razor, also calledlaw of economyorlaw of parsimony, principle stated byWilliam of Ockham(12851347/49), a Scholastic, thatPluralitas non est ponenda sine necessitate, Plurality should not be posited without necessity. The principle gives precedence to simplicity; of two competing theories, the simplerexplanationof an entity is to be preferred. The principle is also expressed as Entities are not to be multiplied beyond necessity.

All metrics are ACTIONABLEIf you dont plan to do anything with a metric, DONT MEASURE IT!i.e. Dont waste your valuable and limited time

Kill useless metrics.59

But again, choose right4. Dont be data-driven

be data-informed

#ELS2014 but VERY DATA-INFORMED!#ELS2014

5. Beware vanity metrics

they may hide an awful truth

Thanks for your time!@justohidalgo

Justo Hidalgohttp://www.loscuentosdelabuelo.com

jhidalgo@24symbols.com65CreditsOlivier Guin, from The Noun ProjectDima Yagnyuk, from The Noun ProjectRedesign from Otl Aichers icon, from The Noun ProjectAxsys, from The Noun ProjectMonika Ciapala, from The Noun ProjectRob Schill, from The Noun ProjectMartin Karachorov, from The Noun ProjectAlexandre Mendes, from The Noun Project

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