do marketing (it's not evil)
DESCRIPTION
My talk on marketing metrics for pirates from TwTRANSCRIPT
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DO Marketing! (It’s Not Evil.)
#TwilioConSan Francisco – Sept 2011
#AARRR
Dave McClure @DaveMcClurehttp://www.500startups.com http://500hats.typepad.com
http://slideshare.net/dmc500hats
AARRR!
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Dave McClure
2001-2010:• Startup Investor: 500 Startups, Founders Fund• Tech Marketing: PayPal, Simply Hired, Mint.com• Advisor, Angel Investor: 100+ Startups• Conferences: Warm Gun, Lean Startup, SMASH• Stanford Lecturer: Facebook, Startup Metrics
80’s & 90’s:• Entrepreneur: Founder/CEO Aslan Computing (acq.)• Developer: Windows Apps / SQL DB Admin• User Groups: E-Commerce, Internet, Client-Server• Engineer: Johns Hopkins ‘88, BS Eng / Applied Math
GEEK, CODER,
ENTREPRENEUR
Blogger, Marketing, Angel/VC Investor
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500 StartupsSeed Fund & Accelerator
(180+ companies, 10+countries)
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[ This Talk ]
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Geek Renaissance
• Tech Innovation• Finance Innovation• Design Innovation• Social Innovation• Global Innovation
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Platforms 2.0Search, Social, Mobile
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What’s a Platform?
Users . . Money
Features
Growth Profit
ProfitableGrowth
Awesome
Successful Platforms have 3 Things:1) Features2) Users3) Money
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Distribution PlatformsCustomer Reach: 100M+
• Search: Google (SEO/SEM)
• Social: Facebook, Twitter, Zynga, LinkedIn
• Mobile: Apple (iPhone, iPad), Android
• Media: YouTube (Video), Blogs, Photos
• Comm: Email, Chat, SMS, Twilio!
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DO Marketing! (Not Evil)
• Marketing is Both Qualitative + Quantitative• Qualitative: Create Emotion, Drive Action• Quantitative: Measure Results of Action• Design (UX) & Distribution (MKTG) Matter• Volume (#), Cost ($), Conversion (%)
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[ Interesting Shit. ]
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Read Geoffrey MillerSex + Evolution + Consumer Mktg = Awesome Sauce
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More Great Shit.Psychology + Comics
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[The Lean Startup]
[Startup Metrics 4 Pirates]
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Just Gimme the GOOD Metrics.Users, Pages, Clicks, Emails, $$$...?
Q: Which of these is best? How do you know?• 1,000,000 one-time, unregistered unique visitors• 500,000 visitors who view 2+ pages / stay 10+ sec• 200,000 visitors who clicked on a link or button• 20,000 registered users w/ email address• 2,000 passionate fans who refer 5+ users / mo.• 1,000 monthly subscribers @ $5/mo
the good stuff.
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The Lean Startup• Talk to Customers; Discover Problems• Progress ≠ Features (Less = More)• Fast, Frequent Iteration (+ Feedback Loop)• Measure Conversion; Compare 2+ Options• Focus on Product/Market Fit (don’t “launch” b4)• Keep it Simple & Actionable
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Discover Customers(Steve Blank, SteveBlank.com)
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LEARN BUILD
MEASURE
IDEAS
CODEDATA
Iterate, Dammit.(Eric Ries, StartupLessonsLearned.com)
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Product/Market Fit b4 “Launch”(Sean Ellis, Startup-Marketing.com)
Startup-Marketing.com
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AARRR!: 5-Step Startup Metrics Model
Website.com
Revenue $$$
Biz DevAds, Lead Gen,
Subscriptions, ECommerce
ACQUISITION
SEOSEM
Apps & Widgets
Affiliates
PR Biz Dev
Campaigns, Contests
Direct, Tel, TV
Social Networks
Blogs
Domains
Retention
Emails & Alerts
System Events & Time-based Features
Blogs, RSS, News Feeds
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Startup Metrics for Pirates
• Acquisition: users come to site from various channels• Activation: users enjoy 1st visit: "happy” experience• Retention: users come back, visit site multiple times• Referral: users like product enough to refer others• Revenue: users conduct some monetization behavior
AARRR!
(note: If you’re in a hurry, Google “Startup Metrics” & watch 5m video)
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One Step at a Time.
1. Make a Good Product: Activation & Retention2. Market the Product: Acquisition & Referral3. Make Money: Revenue & Profitability
“You probably can’t save your Ass and your Face at the same time… choose carefully.” – DMC
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[ DO Marketing: What Do I Do & WHY?]
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Startup Challenges
Startups have problems in 3 key areas:
• Management: Set Priorities, Define Key Metrics
• Product: Build “Right” Features. Measure, Iterate.
• Marketing: Distribution, Distribution, Distribution. (Search, Social, Mobile)
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Role: Founder / CEOQ: Which Customers? Problems? Metrics? Why?A: Focus on Critical Few Actionable Metrics
(if you don’t use the metric to make a decision, it’s not actionable)
• Hypothesize Customer Lifecycle• Target ~3-5 Conversion Events (tip: Less = More)
• Test, Measure, Iterate to Improve
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Role: Product / Eng / DesignQ: What Features to Build? Why? When are you “Done”?A: Easy-to-Find, Fun/Useful, Unique Features that
Increase Conversion (stop iterating when increase decelerates)
• Wireframes = Conversion Steps• Measure, A/B Test, Iterate FAST (daily/weekly)• Optimize for Conversion Improvement
– 80% on existing feature optimization– 20% on new feature development
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Role: Marketing / Sales
Q: What channels? Which users? Why?A: High Volume (#), Low Cost ($), High Conv (%)
• Design & Test Multiple Marketing Channels + Campaigns• Select & Focus on Best-Performing Channels & Themes• Optimize for conversion to target CTAs, not just site/landing page• Match/Drive channel cost to/below revenue potential
• Low-Hanging Fruit: – Blogs– SEO/SEM– Landing Pages– Automated Emails
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Example Marketing Channels
• PR• Contest• Biz Dev• Direct Marketing• Radio / TV / Print• Dedicated Sales• Telemarketing
• Email• SEO / SEM• Blogs / Bloggers• Viral / Referral• Affiliate / CPA• Widgets / Apps• LOLCats ;)
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MAARRRketing Plan
Marketing Plan = Target Customer Acquisition Channels• 3 Important Factors = Volume (#), Cost ($), Conversion (%)• Measure conversion to target customer actions• Test audience segments, campaign themes, Call-To-Action (CTAs)
[Gradually] Match Channel Costs => Revenue Potential • Increase Vol. & Conversion, Decrease Cost, Optimize for Revenue Potential• Avg Txn Value (ATV), Ann Rev Per User (ARPU), Cust Lifetime Value (CLV)• Design channels that (eventually) cost <20-50% of target ATV, ARPU, CLV
Consider Costs, Scarce Resource Tradeoffs• Actual $ expenses• Marketing time & resources• Product/Engineering time & resources• Cashflow timing of expense vs. revenue, profit
ACQ = F(Customer, Campaign, Vol, Cost, Conv)
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[ Don’t Pitch Me, Bro. ]Seriously: Don’t. F*#king. Pitch Me.
(and don’t email me either, cuz i won’t read it)
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Don’t Pitch Me, Bro.
• 1st: Read my stuff (blogs, decks, tweets).• 2nd: Get a referral from someone I trust.
– 500 Mentors or 500 Founders– Other Subject Matter Experts– *Not* Your Mom.
• 3rd: Be Concise. Don’t Suck.
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Links & ResourcesAdditional References:
• Influence: The Psychology of Persuasion Robert Cialdini (book)
• The Mating Mind Geoffrey Miller (book)
• Putting the Fun in Functional Amy Jo Kim (etech 2006 preso)
• Futuristic Play Andrew Chen (blog)
• Don’t Make Me Think Steve Krug (book)
• Designing for the Social Web Joshua Porter (book, website)
• Startup Lessons Learned Eric Ries (blog)
• Customer Development Methodology Steve Blank (presentation, blog)
• Startup-Marketing.com Sean Ellis (blog)
• KISSmetrics.com Hiten Shah / Neil Patel (website)
• How To Pitch a VC Dave McClure (slides, NSFW)
• Understanding Comics Scott McCloud (book)