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Measuring success: Cohorts and
     Product/Market Fit

   a.k.a WTF are we doing and why!?



     @stephenrapoport | Crashpadder.com | @londonFAIL
A bit about me
• Founder - Crashpadder.com (Sold to Airbnb)
• Organiser – Failboat London
http://www.meetup.com/Failboat-London/




         @stephenrapoport | Crashpadder.com | @londonFAIL
Summary
•   What is a startup?
•   What is your startup?
•   How do most measure success?
•   How should you measure success?
•   Corhort analysis?




          @stephenrapoport | Crashpadder.com | @londonFAIL
What is a startup?
• “Organisation trying to create value in an
  environment of extreme uncertainty.”
                                    • Eric Ries, The Lean Startup



If you’re a disruptive startup, uncertainty is x10:
  – Product fit
  – Model
  – Value Hypothesis


          @stephenrapoport | Crashpadder.com | @londonFAIL
What are you doing?
•   Name?
•   Model/elevator?
•   Stage?
•   Founders – Tech/Commercial/Other




          @stephenrapoport | Crashpadder.com | @londonFAIL
Measuring progress
What is usual?
•   Users
•   Revenue
•   Basket value
•   Dwell/stickiness



           @stephenrapoport | Crashpadder.com | @londonFAIL
What are you measuring?
Who’s feeling brave?

Be honest – NOT what should you be measuring.




         @stephenrapoport | Crashpadder.com | @londonFAIL
Measuring progress
                          Revenue
140
                                                                  What does this actually
                                                                  tell us about the
120                                                               company’s growth?
100


 80
                                                                  What might better
 60                                                               metrics be?
 40


 20


  0
      Jan   Feb   Mar Apr May Jun   Jul   Aug Sep   Oct Nov Dec




                  @stephenrapoport | Crashpadder.com | @londonFAIL
Product/market fit
“Being in a good market with a product that
satisfies the needs of that market.”
                                                                  - Marc Andreessen

                              Users
 3500

 3000

 2500

 2000

 1500                                                     Users      Aka ‘The Hockey Stick’
 1000

  500

    0
        Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec




                     @stephenrapoport | Crashpadder.com | @londonFAIL
Problem/solution hypothesis
•   Who is this for?
•   What pain are you solving?
•   What is their current solution?
•   Why is yours better?
•   Do they care?




           @stephenrapoport | Crashpadder.com | @londonFAIL
What should you be measuring?
• Lifetime value of new users
• How has that changed since new features
  were added?
• Is our problem/solution hypothesis holding
  true?




         @stephenrapoport | Crashpadder.com | @londonFAIL
What is the user’s value chain?
Track the lifetime journey of one of your users.

•   Register?
•   Transact?
•   Review?
•   Share on social networks?
•   Refer/Resell?

           @stephenrapoport | Crashpadder.com | @londonFAIL
Cohorts
Segmenting your users as a means to assess
whether you are getting better rather than
simply bigger.
           - Dan Hill, Technical Ninja @ Crashpadder.com




         @stephenrapoport | Crashpadder.com | @londonFAIL
E.g. Cohort Analysis
250




200




150

                                                                     Jan
                                                                     Feb

100                                                                  Mar




50




  0
      Visit              Register        Purchase        Recommend




              @stephenrapoport | Crashpadder.com | @londonFAIL
Summary
Get BETTER, then get BIGGER

(whilst still getting better…..)




          @stephenrapoport | Crashpadder.com | @londonFAIL

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Cohort analysis the basics

  • 1. Measuring success: Cohorts and Product/Market Fit a.k.a WTF are we doing and why!? @stephenrapoport | Crashpadder.com | @londonFAIL
  • 2. A bit about me • Founder - Crashpadder.com (Sold to Airbnb) • Organiser – Failboat London http://www.meetup.com/Failboat-London/ @stephenrapoport | Crashpadder.com | @londonFAIL
  • 3. Summary • What is a startup? • What is your startup? • How do most measure success? • How should you measure success? • Corhort analysis? @stephenrapoport | Crashpadder.com | @londonFAIL
  • 4. What is a startup? • “Organisation trying to create value in an environment of extreme uncertainty.” • Eric Ries, The Lean Startup If you’re a disruptive startup, uncertainty is x10: – Product fit – Model – Value Hypothesis @stephenrapoport | Crashpadder.com | @londonFAIL
  • 5. What are you doing? • Name? • Model/elevator? • Stage? • Founders – Tech/Commercial/Other @stephenrapoport | Crashpadder.com | @londonFAIL
  • 6. Measuring progress What is usual? • Users • Revenue • Basket value • Dwell/stickiness @stephenrapoport | Crashpadder.com | @londonFAIL
  • 7. What are you measuring? Who’s feeling brave? Be honest – NOT what should you be measuring. @stephenrapoport | Crashpadder.com | @londonFAIL
  • 8. Measuring progress Revenue 140 What does this actually tell us about the 120 company’s growth? 100 80 What might better 60 metrics be? 40 20 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec @stephenrapoport | Crashpadder.com | @londonFAIL
  • 9. Product/market fit “Being in a good market with a product that satisfies the needs of that market.” - Marc Andreessen Users 3500 3000 2500 2000 1500 Users Aka ‘The Hockey Stick’ 1000 500 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec @stephenrapoport | Crashpadder.com | @londonFAIL
  • 10. Problem/solution hypothesis • Who is this for? • What pain are you solving? • What is their current solution? • Why is yours better? • Do they care? @stephenrapoport | Crashpadder.com | @londonFAIL
  • 11. What should you be measuring? • Lifetime value of new users • How has that changed since new features were added? • Is our problem/solution hypothesis holding true? @stephenrapoport | Crashpadder.com | @londonFAIL
  • 12. What is the user’s value chain? Track the lifetime journey of one of your users. • Register? • Transact? • Review? • Share on social networks? • Refer/Resell? @stephenrapoport | Crashpadder.com | @londonFAIL
  • 13. Cohorts Segmenting your users as a means to assess whether you are getting better rather than simply bigger. - Dan Hill, Technical Ninja @ Crashpadder.com @stephenrapoport | Crashpadder.com | @londonFAIL
  • 14. E.g. Cohort Analysis 250 200 150 Jan Feb 100 Mar 50 0 Visit Register Purchase Recommend @stephenrapoport | Crashpadder.com | @londonFAIL
  • 15. Summary Get BETTER, then get BIGGER (whilst still getting better…..) @stephenrapoport | Crashpadder.com | @londonFAIL