data-driven startups
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David Cancel- @dcancelhttp://davidcancel.com/
Data-Driven StartupsNYVC Speaker SeriesNew York, NY, September 2010
Twitter hash tags: #datadriven #nyvc
David Cancel- @dcancel
“In God we trust; all others must bring data.”
- W. Edwards Deming
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Who am I
Companies Advisor Investor
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The Problem:98% of the people who visit your site, leave never to return.
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We love making something from
nothing.Yes, we’re hiring.
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Talking, Reading and Dreaming are
WorthlessGet it done.
David Cancel- @dcancel
#JFDIJust Fucking Do It.
Please.
David Cancel- @dcancel
Lean Startup? Customer Development? Who cares...
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It can all be summarized into one sentence.
David Cancel- @dcancel
Does anyone give a shit about your dumb idea?
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There are NO repeatable patterns for startup success. None. Stop looking for
one.
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Do I have your attention now. ;-)
David Cancel- @dcancel
Buy this book This is the best startup
book I’ve ever read.
I personally own two copies.
Required reading for startup engineers.
You can find it on Lulu.com
David Cancel- @dcancel
And this one too. This is more of a “manual”
than a “book”.
Good for everyone on your team to read.
If people care about your product read this to learn how to determine if you can turn your hobby into a business.
You can find this on Amazon.
David Cancel- @dcancel
But remember that you will not find any “secrets” in those books. Stop looking for
one. Go solve a problem.
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Ok enough ranting.
David Cancel- @dcancel
Time to talk data.
David Cancel- @dcancelhttp://www.flickr.com/photos/joao_trindade/4363149160/
David Cancel- @dcancel
Optimize your startup for learning by creating a data-driven framework.
David Cancel- @dcancel
Analytics & A/B Testing are also not the answer.
David Cancel- @dcancel
Use quantitative & qualitative data to test YOUR assumptions.
David Cancel- @dcancel
A/B Testing. Multivariate Testing. Huh?
David Cancel- @dcancel
Multivariate Testing is Useless.
David Cancel- @dcancel
You are way too small to matter.
David Cancel- @dcancel
The point of testing is to prove or disprove assumptions quickly.
David Cancel- @dcancel
Multivariate testing leads to a non-gratifying experience because it takes too
long.
David Cancel- @dcancel
The vast majority of sites should only use A/B testing. This means you.
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Shameless Plug: ABTests.com Learn by example
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Always Be Testing Just Don’t be Stupid.
David Cancel- @dcancel
The Local Maxima Problem
Your Design
A Better Design
Optimized at Local Maxima
Current
I stole this slide from Joshua Porter - @bokardo
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“Design is never done” - Joshua Porter
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Optimize your startup for learning not data.
David Cancel- @dcancel
The 3 Steps to Data-Driven Startup Enlightenment
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Data-Driven Startup Checklist
Operating Dashboard
Conversion Funnel Analysis
Cohort Analysis
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Skip the fancy shit and use Google Spreadsheet. Ghettofabulous.
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Step 1: The Operating Dashboard.
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A single place for your entire team to see where you suck the most.
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Company-wide dashboard Everyone! Including interns.
Fictional
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Every initiative has to map to positive changes in these numbers.
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Kill all features that don’t improve your operating metrics.
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Only move to the second step after you’ve mastered the Operating Dashboard.
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Step 2: Conversion Funnels
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Metrics are fun, but Funnels kick ass.
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Fancy Forget pretty visualizations
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Pretty Wasted time
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Keep it raw & ugly Do this tomorrow morning.
David Cancel- @dcancel
Monitor your funnel weekly to see how changes are impacting your business.
David Cancel- @dcancel
If you aren’t doing this you are implementing lots of useless features.
David Cancel- @dcancel
Checkout my friends at KissMetrics.com to capture your funnel level data.
David Cancel- @dcancel
Step 3: Cohort Analysis
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This is the “shot caller” of all analyses. Respect.
David Cancel- @dcancel
Cohort Analysis by Fred Wilson (post)
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Without a cohort analysis you are flying blind.
David Cancel- @dcancel
Is your churn going up or down?
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You don’t have a clue until you’ve done a cohort analysis.
David Cancel- @dcancel
Time for some more ranting.
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Data Visualizations are a Waste of Time.
David Cancel- @dcancel
Don’t use anything except for these 3 charts.
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80%
19%
1%
Frequency
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Focus on your business. Not data.
David Cancel- @dcancel
This is usually when I get some “data” questions.
David Cancel- @dcancel
Things clueless people ask
What type of algorithms do you use?
What metrics should I use?
Anything related to a regression analysis.
Anything related to data visualization.
David Cancel- @dcancel
No one cares how smart you are except for your mom.
David Cancel- @dcancel
Only one thing matters.
David Cancel- @dcancel
Does anyone give a shit about your dumb idea?
David Cancel- @dcancel
Thank You!
David Cancel Email: dcancel@dcancel.comTwitter: dcancelhttp://davidcancel.com
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