understanding activation - pirate metrics and growth hacking

Activation WorkshopWill Egan | me@willegan.com | @willegan

Overview

1. Setting the scene

2. Understanding core value prop

3. Tracking and analysing activation rate in live time

Context

Subscription Software is fundamentally based around the following

concepts.

Physical services or products can benefit from this thinking substantially

as well.

Growth Hacking

Not this

Quick Definition

Then we’re into it.

Growth hacking is a process of rapid experimentation across marketing

channels and product development to identify the most effective, efficient ways

to grow a business.

Five Key Stages

These are the pirate metrics (Dave McClure). We could also add resurrection.

Acquisition - how do customer’s find you? Activation - do they find immediate value? Retention - do they come back for value? Revenue - do they pay? Referral - do they tell their friends?

Activation

The first time someone experiences the core value offered by your product or service. That initial sense of delight.

The reason why they signed up.

Activation for a physical product is the first step towards long term use (eventually buying your product/service).

ActivationThe first time someone experiences the core value offered by your product or service. That initial sense of delight.

The reason why they signed up.

Why? It’s the single biggest driver of long term growth. Let me explain…

Activation in the Path to Conversion

Activation in the Path to Conversion

75% Lost

Which one has better growth?

Why?• The base of engaged users underpinning the second graph (the

layers) indicates good long term retention. • Every month when a new cohort of users is acquired, they are

simply added to the layers of retained users from previous months. • In the first graph, users are churning, with retention ultimately diving

towards zero. • Both of these graphs are driven by activation.

Core Value Prop

Quick Definition

Think: problem solution fit > product market fit.

The one job your product or service was employed by a customer to do.

By using your product, what do they get?

Identifying Core Value Prop• Product market fit equates to one function done really well. • That one function should align directly with your core value

proposition. In fact, every other product function is secondary to this goal and should only exist to make you better at delivering on your core value proposition.

• Now ask yourself: how fast does your product deliver on its core value proposition? The best products do it immediately.

The best products…

Google

• Core value proposition: a search engine that “understands exactly what you mean and gives you back exactly what you want.”

• Core function: a search bar and instant results.

Uber

• Core value proposition: transportation in minutes. • Core function: one button that lets you ‘Set Pickup Location’.

Snapchat

• Core value proposition: Snap a photo or a video, add a caption, and send it to a friend.

• Core function: take a photo/video.

In a nutshell

Product market fit is when you have a core feature that delivers on your value proposition so well, that you can increase value simply by

improving that core feature.

But…

It is, however, easy to lose product market fit. For example, the transition from Elance to Upwork has made it much harder to hire a

freelancer.

Upwork

• Core value proposition: find freelancers to tackle any job, any size, any time.

• Core function: … where would you click?

Identify for yourself

Tracking Activation

Going to need some tech.

• Track the actual action of activating on your website or app using a javascript event.

• You could use Google Tag Manager, Google Analytics or Segment. • Next, you’ll need to get said data into a warehouse (Redshift) or DB. • Query and visualise data using Mode/SQL.

How it Works

User

Website App

Service 3rd Party

Segment

Datacollection

Database

User Data

RedShift

Unstructured Non relational

Everything

Mode

Graphing Visualisation Transforming

User You

What does this actually look like?

How it Works

User

Website App

Service 3rd Party

Segment

Datacollection

Database

User Data

RedShift

Unstructured Non relational

Everything

Mode

Graphing Visualisation Transforming

User You

Final Points• Beware of the velocity you track at. Daily might be very noisy early

on in the product. • If your activation rate is 50%, 5 out of every 10 users you acquired

didn’t get to experience the value your product suggested it would offer them.

• Similarly, your retention rate will never be higher than your activation rate.

Thank You