• 3. We’ll cover... 1 The data problems that startups face 2 Gateway metrics 3 4 gateways and the metrics for each • 5. If you’re SaaS, track these • 6. Use these for ecommerce • 7. Consumer tech? • 8. Sounds easy right? • 9. There’s just one little problem... • 10. You can’t track them. • 11. You’re just getting started. • 12. Advanced metrics are a luxury you don’t need. • 13. Over time, your data decays. • 14. Your data is messy. • 15. It takes time to perfect your metrics. • 16. Super basic version of lifetime value for SaaS • 17. Advanced LTV formula • 18. Let’s review the problems we face • 19. Gateway Metrics • 20. When picking metrics, always ask yourself: What’s my single biggest constraint right now and which metric will tell me if I’m making progress? • 21. Why ignore other data? • 22. Every business model is slightly different. Let’s cover the main gateways that startups face when getting traction. • 23. Gateway 1: Is your idea any good? • 24. Your main constraint: Getting anyone to care about your idea. • 25. Your main metric: Can you get anyone to pay for your product or use it regularly? • 26. Bad metrics for this gateway • 27. Gateway 2: Is your product good enough? • 28. Your main constaint: Having a product that’s good enough to build a business on. • 29. Your main metric: Ask 500 users the Product/Market Fit Question • 30. What’s the P/M Fit Question? How would you feel if you could no longer use [your product]? • 31. Your goal for the P/M Fit Question • 32. What about traffic, conversions, or engagement? • 33. Gateway 3: Can you grow? • 34. Your main constraint: Acquiring customers consistently from at least one channel. • 35. Possible channels: 1 Inbound 2 Paid 3 Virality • 36. Pick just one to start. Work on a single channel for 3 months. • 37. Your main metrics: Your acquisition funnel and your main business metric. • 38. Main business metrics: 1 SaaS 2 Ecommerce 3 Consumer Tech • 39. SaaS Funnel: • 40. Ecommerce Funnel: • 41. Consumer Tech Funnel: • 42. Why not cost per acquisition? • 43. Gateway 4: Do you have a stable model? • 44. Your main constraint: In order to keep scaling, you need a healthy model for your business. • 45. Your main metrics: They depend entirely on which business model you’ve choosen. • 46. The SaaS Model: 1 LTV is at least 3x acquisition cost 2 Recover acquisition cost within 12 months 3 Get monthly churn below 2% • 47. The Ecommerce Model: 1 Annual repurchase rate below 40% = focus on customer acquisition 2 Annual repurchase rate 40%-60% = acquisition and loyalty 3 Annual repurchase rate above 60% = focus on loyalty • 48. The Consumer Tech Model 1 Virality > 1 2 Usage 3 out of 7 days 3 30% users active day after signup 4 Organic growth of 100s signups/day 5 Clear path to 100,000+ users • 49. Time to get serious with data. • 50. How to get the data you need

1. Master Class: Analytics for Startups - Startup
Phenomenon
Lars Lofgren
Growth Manager - November 2013

2. @larslofgren

3. We’ll cover...
1
The data problems that startups face
2
Gateway metrics
3
4 gateways and the metrics for each

4. Let’s start measuring!

5. If you’re SaaS, track these:
1
Monthly Recurring Revenue
2
Monthly Churn
3
Cost Per Acquisition
4
Lifetime Value
5
Signup Funnel

6. Use these for ecommerce:
1
Site Conversion Rate
2
Total Revenue
3
Average Order Value
4
Annual Repurchase Rate
5
Merchandise

7. Consumer tech? Track these bad boys:
1
Monthly Active Users
2
Daily Active Users
3
Virality
4
Engagement by Cohort
5
Activation

8. Sounds easy right? Time to jump in!

9. There’s just one little problem...

10. You can’t track them. At least not right away.

11. You’re just getting started.

12. Advanced metrics are a luxury you don’t need.

13. Over time, your data decays.

14. Your data is messy.

15. It takes time to perfect your metrics.

16. Super basic version of lifetime value for SaaS:
Average
Average monthly
X
subscription length
subscription

17. Advanced LTV formula:
LTV =
(Average revenue per
account X gross margin)
monthly churn
X
(Monthly growth in average
revenue) X (1 - monthly churn)
2
(monthly churn)
*forentrepreneurs.com/saas-metrics-2-definitions

18. Let’s review the problems we face:
1
Lack of data.
2
Advanced metrics are a luxury.
3
Data decays over time.
4
Data gets messy.
5
It takes time to perfect metrics.

19. Gateway Metrics

20. When picking metrics, always ask yourself:
What’s my single biggest constraint
right now and which metric will tell
me if I’m making progress?

21. Why ignore other data?
You need to do the right things in
the right order.

22. Every business model is slightly different.
Let’s cover the main gateways that
startups face when getting traction.

23. Gateway 1: Is your idea any good?

24. Your main constraint:
Getting anyone to care about your
idea.

25. Your main metric:
Can you get anyone to pay for your
product or use it regularly?

26. Bad metrics for this gateway:
1
Asking people if they’ll pay
2
Adwords clicks
3
Beta or waiting list signups
4
Traffic

27. Gateway 2: Is your product good enough?

28. Your main constaint:
Having a product that’s good
enough to build a business on.

29. Your main metric:
Ask 500 users the Product/Market
Fit Question

30. What’s the P/M Fit Question?
How would you feel if you could no
longer use [your product]?
1
Very disappointed
2
Somewhat disappointed
3
Not disappointed (it isn’t really that
useful)

31. Your goal for the P/M Fit Question:
At least 40% of your users should
say “Very disappointed”.
*Sean Ellis and Hiten Shah get credit for this one

32. What about traffic, conversions, or engagement?
None of that matters (yet).

33. Gateway 3: Can you grow?

34. Your main constraint:
Acquiring customers consistently
from at least one channel.

35. Possible channels:
1
Inbound (Google, Content, Social)
2
Paid (PPC, Affiliates)
3
Virality (Invites, Referrals)

36. Pick just one to start.
Work on a single channel for 3
months. Assume it’ll work and get
the resources needed to execute.

37. Your main metrics:
Your acquisition funnel and your
main business metric.

38. Main business metrics:
1
SaaS: Monthly Recurring Revenue
2
Ecommerce: Monthly Revenue
3
Consumer Tech: Monthly Active Users

39. SaaS Funnel:

40. Ecommerce Funnel:

41. Consumer Tech Funnel:

42. Why not cost per acquisition?
You don’t even know if you can
acquire customers let alone how
much it’ll cost.

43. Gateway 4: Do you have a stable model?

44. Your main constraint:
In order to keep scaling, you need a
healthy model for your business.

45. Your main metrics:
They depend entirely on which
business model you’ve choosen.

46. The SaaS Model:
1
LTV is at least 3x acquisition cost
2
Recover acquisition cost within 12 months
3
Get monthly churn below 2%

47. The Ecommerce Model:
1
Annual repurchase rate below 40% =
focus on customer acquisition
2
Annual repurchase rate 40%-60% =
acquisition and loyalty
3
Annual repurchase rate above 60% =
focus on loyalty
*Kevin Hillstrom in Lean Analytics

48. The Consumer Tech Model
1
Virality > 1
2
Usage 3 out of 7 days
3
30% users active day after signup
4
Organic growth of 100s signups/day
5
Clear path to 100,000+ users
*Andrew Chen’s “Zero to Product/Market Fit”

49. Time to get serious with data.

50. How to get the data you need:
1
One team owns data quality.
2
Hire a data scientist if you need to.
3
Clean up your data.
4
Use customer analytics.
5
Tie all data back to individual users.

51. Where to find these slides:
kiss.ly/startup-phenom

52. Q&A Time!
Lars Lofgren
llofgren@kissmetrics.com
@larslofgren