hotspot alpha camp_setting course with metrics

Bernard Chan

Setting course with Metrics

I have an app idea.Should I quit my job and start the startup?

I want to promote my product.Should I advertise on FB or Google?

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METRICS

Why we need metrics?

Use of metrics

- Monitor health of business

- Make decision

- Focus (North Star)

Use of metrics - Monitoring

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Make Decision

Opinions are like assholes.

Everybody's got one and

everyone thinks everyone

else's stinks

Let the number speak.

“

When making decision, always askWhat’s your objective?

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PerformanceBrand

Nature of Metrics

- Quantifiable

- Measurable- Can be recorded an analyse

QuestionIs “weight” a metrics?

Nature of Metrics

- Quantity (How Many): No. of Downloads, Revenue, Daily Active Users (DAU)

- Quality (How well): Click-thru-rate (CTR), Activation Rate, Margin

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Establish success formula on 3 levels

1. Business

2. Product

3. Marketing

What’s most important on Business Level?

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Visits Conversion per Visit Avg Order ValueX X Revenue=

VCAR• E-commerce:

Business level metrics: E-Commerce

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Business level metrics: Digital Media

Visits

CPM (Yield)No. of Ad Units per

PageX X

Revenue=

PAYR• Digital Media:

1,000

Avg Page/VisitX

Pageview

Unit economics

Business model (revenue and cost) for a single customer

Examples

ARPU - Average Revenue Per User

LTV - Lifetime value

CAC - Customer acquisition cost

LTV

Reference: https://blog.kissmetrics.com/how-to-calculate-lifetime-value/

Mark is considering to acquire one of these messenger app: Whatsapp, Cubie, Snapchat. As Head of M&A you can ask these companies for 3 metrics. Which would you choose?

Exercise

A. No. of downloadB. ValuationC. No. of messages per user per monthD. No. of messages handled totalE. Monthly revenueF. Active user growth rate (monthly / quarterly / YoY)G. No. of monthly active users

Read: WhatsApp vs. bull-shit metricsA way to think about Whatsapp staggering price

Product Metrics

Product Metrics

Product Level Metrics tie directly with the product; it includes everything that relates to- Users- Usage- Core Product Value

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Button Click-Thru-Rate (CTR)

No. of Downloads

Daily Active User (DAU)Unique Visitors (UV)Page Views (PV) Monthly Active Users (MAU)

Retention Rate

Bounce Rate

Session LengthDownload-to-Activation (%)

DAU/MAU

Product Metrics examples

2nd Day Retention Rate

Message Sent per User per Day

Total Monthly Post per Month

Sell-thru-rate

25Source: https://blog.kissmetrics.com/bounce-rate/

What’s most important aboutProduct Metrics

Answers to -

Is our product delivering core product value?

Are our users experiencing our core product value?

Be-careful with numbers

Our app is opened 3,000 times per week. Lots of users like us!

QuestionWhat’s wrong with this statement?

“Measuring busi-ness is far easier than measuring business”

Seth Godin

What to measure?

What’s your core product value?

Exercise

You are product manager of mobile marketplace for 2nd goods. Your revenue model is transaction fee (%).

What are two most important core product metrics in first year?

Exercise

Phase 1:• No. of Active Users• No. of Listings

Phase 2:• Gross Merchandise Value (GMV)• Avg. time from listed to sold (hrs)

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Metrics helps you define whats most important

For Facebook -

“Get any individual to 7 friends in 10 days”http://www.youtube.com/watch?v=raIUQP71SBU [20:45]

Chamath Palihapitiya

VP of Growth, Facebook

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Marketing Metrics

Marketing Metrics

Measure cost and effectiveness of your distribution channels

In the internet world - we can measure everything

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Cost-Per-Click (CPC)

Cost-Per-Acquisition (CPA)

Return-on-Investment (ROI)

Cost-Per-Download (CPD)

Cost-Per-Milli (CPM)

Marketing Metrics examples

Return-on-Ads-Spend (ROAS)

Share-of-Voice (SOV)

Click-thru-rate (CTR)

Conversion Rate

No. of Clicks

No. of Conversion

Reach

Frequency

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Metrics used by most US Marketers (2011)

“Digital marketers today are drowning in metrics, but they don’t know which ones are important or how to connect the dots in a meaningful way that will drive marketing performance”

Using Marketing Metrics

- What’s my impact / ROI?

- What do I learn about the channel?

- What do I learn about our (potential) users?

Exercise

You want to promote your landing page on Google, Facebook, and Yahoo.

You have SGD 10,000 budget for each channel.Pricing: CPC

How would you compare their “effectiveness”?

Hardest part about startup ischoosing what not to do

Vanity vs. Actionable Metrics

a16z

http://a16z.com/2015/08/21/16-metrics/16 Startup Metrics

http://a16z.com/2015/09/23/16-more-metrics/16 More Startup Metrics

Analytics Tools: Google Analytics

Analytics Tools: Hotjar

The purpose of metrics

Answer questions - • Is my business healthy?• Is my marketing effort (campaign) effective?• Is my product solving my users’ problem? Delivering value?

Make decisions - how can we do better?

Set your company North Star

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Metric Framework

Defining AARRR Strategy

1) Define key events for each AARRR step

2) Define tactics that drive these events

3) Define key metrics to measure performance / results

Events Tactics Metrics

Let’s try this

1) Define key event for each step

1) Define key event for each step

Open an Account

Upload first photo

Upload more

Share on FB

5.99 above 10GB

2) Design tactics that drive these events

Open an Account

Upload first photo

Upload more

Share on FB

5.99 above 10GB

FB ads

Free 10GB + on boarding

auto upload photos

Easy share mechanism

5.99 above 10GB

3) Measure results: metrics

Visitor to Account Openingconversion rate (%)

Download toactivation (%)

2nd Day Retention

avg. no. of shareper user

Paid users / all users (%)

Free 10GB + on boarding

auto upload photos

Easy share mechanism

5.99 above 10GB

FB ads

Please design your campaign for

Please design your AARRR campaign for Uber

Events Tactics Metrics

In class workshop (30min)

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You can alsoSet Target Conversion % & Estimated Value

65Source: Metrics for Early Stage Startups by @andreasklinger

Early stage: what matters most for growth?

http://startupclass.samaltman.com/ - Lecture #6: Growth [1:45][9:50]

User Accounting

Retention - users vs. time

Cohort analysis (measuring retention)

Source: http://creativetraction.com/2014/06/06/cohort-analysis-new-customers-acquisition-costs/

Post-product-market fit: how to use metrics?

http://startupclass.samaltman.com/ - Lecture #6: Growth [9:50]

North Star

North Star

• The key metric(s) set the goal, purpose, and culture of

your startup

• Let everyone in the company know what is most

important to the company, in turn affect every business

decision, product feature, resource investment, etc.

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http://startupclass.samaltman.com/courses/lec06/ [11:22]

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Confirmed Registered Users (CRU)

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Active Confirmed Registered Users (CRU)

~ END ~

http://alphacamp.tw

hotspot alpha camp_setting course with metrics

Small Business & Entrepreneurship