The Metrics-Driven StartupWhich Metrics Matter and Why

Hiten ShahLean LA • September 21st, 2010

Ferrari F430 Spider

152 miles per hour

Most Startups Crash and Burn

Let’s talk about what else is easy.

Stop measuring what’s easy.

Start measuring what matters.

Failure attracted me to The Lean Startup

Vanity Metrics

Actionable Metrics

Are the metrics you are tracking helping you make decisions?

Example SaaS Web App

• People sign up and pay online

• They first sign up for a 7 day free trial

• Then they pay $97 per month

What are your assumptions?

Example SaaS Web App

• People sign up and pay online

• They first sign up for a 7 day free trial

• Then they pay $97 per month

Software as a Service Product(Assumptions)

Key Actions % of people # of people

Visit Site 100% 1000

Sign Up 10% 100

Activate 5% 50

Upgrade 1% 10

Revenue $970 per month$970 per month

Baseline these key actions and assumptions.

Software as a Service Product(Actual Baseline)

Key Actions % of people # of people

Visit Site 100% 1000

Sign Up 3.6% 36

Activate 1.2% 12

Upgrade 0.4% 4

Revenue $388 per month$388 per month

What would you try to improve?

Key Actions % of people # of people

Visit Site 100% 1000

Sign Up 3.6% 36

Activate 1.2% 12

Upgrade 0.4% 4

Revenue $388 per month$388 per month

Software as a Service Product(Video Test)

Key Actions % of people # of people

Visit Site 100% 1000

Sign Up 6.5% 65

Activate 1.8% 18

Upgrade 0.3% 3

Revenue $291 per month vs. $388 baseline :($291 per month vs. $388 baseline :(

Get Inspired!

Software as a Service Product(Inspired Test)

Key Actions % of people # of people

Visit Site 100% 1000

Sign Up 7.7% 77

Activate 2.8% 28

Upgrade 1.2% 12

Revenue $1164 per month vs. $388 baseline :)$1164 per month vs. $388 baseline :)

Software as a Service Product(Compare all 3)

Key Actions Baseline Video Test Inspired Test

Visit Site 100% 100% 100%

Sign Up 3.6% 6.5% 7.7%

Activate 1.2% 1.8% 2.8%

Upgrade 0.4% 0.3% 1.2%

Revenue $388 per month

$291 per month

$1164 per month

Crazy Egg Pricing Before

Crazy Egg Pricing After

Crazy Egg Pricing Results

• Before - 150 sign ups per day

• After - 15 sign ups per day

• But revenue doubled in the first month!

Start measuring what matters.

Questions?

hiten@kissmetrics.com

Got questions? Want advice? Email Me!