Transcript
Page 1: Data-Driven Startups

David Cancel - @dcancelhttp://davidcancel.com/

Data-Driven Startups

Lean Startup Circle BostonCambridge, MA, July 2010

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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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David Cancel - @dcancel

The Problem:98% of the people who visit your site, leave never to return.

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David Cancel - @dcancel

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 Worthless

Get it done.

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#JFDI

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#JFDIJust Fucking Do It.

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#JFDIJust Fucking Do It.

Please.

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Lean Startup? Customer Development? Who cares...

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It can all be summarized into one sentence.

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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. ;-)

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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

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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.

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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.

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Time to talk data.

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David Cancel - @dcancelhttp://www.flickr.com/photos/joao_trindade/4363149160/

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Optimize your startup for learning by creating a data-driven framework.

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Analytics & A/B Testing are also not the answer.

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Use quantitative & qualitative data to test YOUR assumptions.

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A/B Testing. Multivariate Testing. Huh?

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Multivariate Testing is Useless.

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You are way too small to matter.

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The point of testing is to prove or disprove assumptions quickly.

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Multivariate testing leads to a non-gratifying experience because it takes too long.

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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.

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The Local Maxima Problem

Your Design

A Better Design

Optimized at Local Maxima

Current

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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.

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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 ugly & raw Do this tomorrow morning.

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Monitor your funnel weekly to see how changes are impacting your business.

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If you aren’t doing this you are implementing lots of useless features.

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Checkout my friends at KissMetrics.com to capture your funnel level data.

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Step 3: Cohort Analysis

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Without a cohort analysis you are flying blind.

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Is your churn going up or down?

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You don’t have a clue until you’ve done a cohort analysis.

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Time for some more ranting.

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Data Visualizations are a Waste of Time.

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Don’t use anything except for these 3 charts.

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80%

Frequency

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80%

15%

Frequency

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80%

15%

5%

Frequency

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Focus on your business. Not data.

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This is usually when I get some “data” questions.

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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.

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No one cares how smart you are except for your mom.

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Only one thing matters.

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Does anyone give a shit about your dumb idea?


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