A quick introduction to the core principles of Lean Analytics -- what makes a good metric, how to track metrics, what to track based on your business model and stage. As well, covers the One Metric That Matters and shares a couple case studies.

1. LEAN ANALYTICS
Using data to build a better startup faster
Ben
Yoskovitz
@byosko

2. A little about me…
Acquihired Instigator Blog Exited (but Big win!
not a real
win)

3. YEAR ONE LABS
YEAR ONE LABS

4. Pre-order
today!
(please)
http://leananalyticsbook.com

5. what. why. when. how.
✓what makes a good metric
✓the one metric that matters
✓business model flipbook
✓lean analytics stages
✓problem / solution canvas
✓analytics in the enterprise
http://leananalyticsbook.com

6. Case studies galore

7. WE’RE ALL LIARS

8. DON’T
IGNORE
YOUR GUT

9. Your Gut Increased
+ = likelihood of
Lean Analytics success

10. PART
ONE
The basics of
good analytics.

11. Analytics is the measurement
of movement towards your
business goals.

12. In a startup, the purpose of
analytics is to iterate to
product/market fit before
the money runs out.

13. Five categories of metrics to think about:
• Qualitative vs. quantitative
• Vanity vs. actionable
• Exploratory and reporting
• Leading vs. lagging
• Correlated vs. causal

14. What makes a great metric?
• Comparative over time, against a baseline
• Understandable
• Ratios and rates, not numbers
• Improves the accuracy of your predictions
• Your behavior changes when it does

15. PART
TWO
What metrics
should you track?

16. What you should track is dependent on:
Your basic The stage your
business model startup is at
How you make $$ Lifecycle
• E-­‐commerce • Empathy
• SaaS • S>ckiness
• Free
mobile
app • Virality
• Media
site • Revenue
• Collabora>ve
content
site • Scale
• Two-­‐sided
marketplace

17. Example business model: E-commerce
Quick summary:
• Are you focused on loyalty or acquisition?
• Don’t overlook logistics, delays, and ratings
• Old “average conversion rates”

18. Loyalty or acquisition?
How many Then you are in Your customers You are Focus on
customers buy this mode will buy from you just like
a second time
in 90 days?
Low CAC,
1-15% Acquisition Once 70% high
of retailers checkout
15-30% Hybrid 2-2.5 20% Increasing
per year of retailers returns
Loyalty,
>30% Loyalty >2.5 10% inventory
per year of retailers expansion
(Thanks to Kevin Hillstrom for this.)

19. Don’t forget the real world
Shipping time, stock availability,
logistics, ratings, and other factors
haveShipping time, stock availability,
a real impact on most e-
DON’T FORGET commerce companies.and other factors
logistics, ratings,
have a real impact on most e-
THE REAL WORLD commerce companies.

21. Case study:
WineExpress increases revenues
• Stage: Revenue
• Model: E-commerce
• Exclusive wine shop partner of the Wine
Enthusiast catalog and website.
• “Wine of the day” page is highly trafficked,
needed optimization

22. A

23. B

24. WineExpress: Before and After
41% increase
in
revenue
per
visitor

25. Lifecycle stage
Discover a known need within a sizeable market
Identify a solution reachable people will pay for
Develop and validate a viable product to sell profitably
Create a sustainable business model
Attract and appease investors
Find a successful exit

26. Where’s the risk?
Real need? Key: Empathy
Right solution?
Key: Stickiness
Key: Growth rate
Good product?
Key: Virality
Sustainable biz?
Key: Revenue
Healthy market?
Successful exit? Key: Scale

28. Case study: Buffer goes from
Stickiness to Scale (through Revenue)
• Stage: Scale
• Model: SaaS (consumer)
• Popular social sharing application.
• Focused primarily on customer acquisition
• Charged from day one

29. Buffer charges early to prove people
want the problem solved
of visitors create an account
20% (acquisition / Empathy)
of sign-ups become active
64% (start of Stickiness)
of sign-ups return in the 1st month
60% (engagement / Stickiness)
of sign-ups are active after 6 months
20% (engagement / Stickiness)
convert from free to paid
2% (Revenue)

30. PART
THREE
The One Metric
That Matters

31. Choose only one metric.

32. Benefits of the OMTM:
• It should answer the most important
question you have
• There’s a clear goal
• Focuses the entire company
• Instills a culture of experimentation

33. Case study: Timehop aims for
virality through content sharing
• Stage: Virality
• Model: Mobile app
• Social network around the past
• Focused on virality (but not the viral
coefficient)

34. The One Metric That Matters:
Content sharing
• Focused on % of daily active
users that share content
• Aiming for 20-30% of daily
active users to share content
“All that matters now is virality. Everything else—be it
press, publicity stunts or something else—is like
pushing a rock up a mountain: it will never scale. But
being viral will.” - Jonathan Wegener, co-founder

35. METRICS ARE LIKE
SQUEEZE TOYS

36. Thank you.
follow me. email me.
@byosko
instigatorblog.com
byosko@gmail.com
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leananalyticsbook.com