Analytics for Startups - 500 Startups Accelerator Marketing Hell Week

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Transcript of Analytics for Startups - 500 Startups Accelerator Marketing Hell Week

  • Andy Young // @andyy // andy@500.co

    How do I Analytics?a practical guide forpragmatic startups

  • Andy Young // @andyy // andy@500.co

    Hi, Im Andy!@andyy

    #fb

    Pho

    to b

    y Dan

    Tay

    lor - da

    n@he

    isen

    bergmed

    ia.com

    mailto:dan@heisenbergmedia.com

  • Andy Young // @andyy // andy@500.co

    Wait what, why?

    Analytics?

  • Andy Young // @andyy // andy@500.co

    What do we measure, and why?

    Vanity metricsRevenue metrics

    Conversion rate metricsPirate metrics..

    We need to know how were doing.

  • Andy Young // @andyy // andy@500.co

    If you're not keeping score there's no point playing the game -

    you'll never know if you'rewinning or not

    - @distrodom

  • Andy Young // @andyy // andy@500.co

    Todays tools make it super-easy to track

    thingsGoogle Analytics

    MixpanelLocalyticsKissMetrics

    Branch Metrics..

  • Andy Young // @andyy // andy@500.co

    Todays tools make it super-easy to track

    thingsBUT they also make it really easy to

    - become overwhelmed with data- focus on the wrong things

  • Andy Young // @andyy // andy@500.co

    Typical analytics challenges/pitfalls

    Drowning in too much data

    Failure to select + focus on the top metrics that matter

    Not tracking the data you need to answer key questions

  • Andy Young // @andyy // andy@500.co

    Why analytics?

    1. How are we doing? - are KPIs on the right track?

    2. What are the results of our experiments?- so we can learn

    3. Whats happening right now?- did something great or terrible just happen?

  • Andy Young // @andyy // andy@500.co

    How are we doing?

  • Andy Young // @andyy // andy@500.co

    Howre we doing?

    1. Identify top-level KPI

  • Andy Young // @andyy // andy@500.co

    Identify top-level KPI

    its hard.

  • Andy Young // @andyy // andy@500.co

    Identify top-level KPI

    if you pick the wrong KPIs, you're screwed.

    If you pick KPIs and then ignore them, you're screwed.

    If you pick and monitor KPIs diligently, but don't assess everything you and your whole team does on the basis of whether your tasks are the most effective way to grow your KPIs, you're screwed.

  • Andy Young // @andyy // andy@500.co

    Identify top-level KPI

    How?

  • Andy Young // @andyy // andy@500.co

    Identify top-level KPI

    Keep it simple!

    The good news: theres probably apre-determined answer

    forwhat drives your business

  • Andy Young // @andyy // andy@500.co

    Identify top-level KPI

    Theres probably a pre-determined answer for what drives your business

    Spoiler: ultimately its $$$

  • Andy Young // @andyy // andy@500.co

    Howre we doing?

    Theres probably a pre-determined answer for what drives your business

    Commerce: # salesSubscription / SaaS: # subscribers

    Marketplace: # transactions

  • Andy Young // @andyy // andy@500.co

    Howre we doing?

    1. Identify top-level KPI

  • Andy Young // @andyy // andy@500.co

    Howre we doing?

    1. Identify top-level KPI2. Next, add nuance

  • Andy Young // @andyy // andy@500.co

    Howre we doing?

    Nuance behind your top level KPI

    E.g. for commerce: # salesNuance: average sale $; # customers

  • Andy Young // @andyy // andy@500.co

    Howre we doing?

    1. Identify top-level KPI2. Add nuance3. Add drivers

  • Andy Young // @andyy // andy@500.co

    Howre we doing?

    Drivers behind your top level KPI

    E.g. for marketplaces: # transactionsDrivers: # suppliers, # customers

  • Andy Young // @andyy // andy@500.co

    Howre we doing?

    1. Identify top-level KPI2. Add nuance3. Add drivers

    4. Add funnel for these drivers

  • Andy Young // @andyy // andy@500.co

    Howre we doing?

    1. Identify top-level KPI2. Add nuance3. Add drivers

    4. Add funnel for these drivers

    End up with AARRR

  • Andy Young // @andyy // andy@500.co

    Howre we doing?

    1. Identify top-level KPI2. Add nuance3. Add drivers

    4. Add funnel for these drivers

    Put in a spreadsheet(Template Google Sheet: http://bit.ly/kpi-sheet)

    http://bit.ly/kpi-sheet

  • Andy Young // @andyy // andy@500.co

    - Howre we doing? -

    - bit.ly/kp

    i-sheet -

    http://bit.ly/kpi-sheet

  • Andy Young // @andyy // andy@500.co

    Howre we doing?

    Put in a spreadsheet

    - key KPI at the top, nuance and drivers below, finally the detailed funnel below for reference

    - columns for weekly numbers, w/w growth

  • Andy Young // @andyy // andy@500.co

    Howre we doing?

    Put in a spreadsheet

    - review weekly- share with whole team

    - set targets- use as a model to predict and prioritize

  • Andy Young // @andyy // andy@500.co

    Weekly/Monthly reporting

    % week-on-week or month-on-month growthin your

    One Metric That Matters

    Focus. Set a target.How to choose? Read this Lean Analytics post

    http://leananalyticsbook.com/one-metric-that-matters/

  • Andy Young // @andyy // andy@500.co

    Other key metricsCAC, LTV, churn

  • Andy Young // @andyy // andy@500.co

    Other key metrics

    Customer Acquisition Cost (CAC)how much you spend (on average) to acquire a

    customer

    Lifetime Value (LTV)How much revenue $$ an average customer

    brings you in all time

  • Andy Young // @andyy // andy@500.co

    If yourLTV

    is greater than yourCAC

    then youre in business

  • Andy Young // @andyy // andy@500.co

    If yourLTV

    is greater than 3x yourCAC

    then youre in a good business

  • Andy Young // @andyy // andy@500.co

    CAC & LTV: nuances

    Payback period: time to recoup CAC

    Magnitude of your numberse.g. enterprise vs. social

  • Andy Young // @andyy // andy@500.co

    Calculating CAC

    Simple approach: total spend / total signups

    50% of the money I spend on advertisingis wasted - the problem is I don't know which half

    - John Wanamaker

    Eventual goal: calculate CAC per channel

  • Andy Young // @andyy // andy@500.co

    Calculating LTV

    Problem!You dont have a lifetime of data

    Measured LTV vs. estimated LTV

    Measure actual LTV per cohortExtrapolate revenue curve over time

  • Andy Young // @andyy // andy@500.co

    Calculating LTV

    Know your definitions!

    MRR?! GMV?!

    A16Z blog posts: 16 Startup Metrics & 16 MOAR Startup Metrics

    http://a16z.com/2015/08/21/16-metrics/http://a16z.com/2015/09/23/16-more-metrics/

  • Andy Young // @andyy // andy@500.co

    Analysing your data

  • Andy Young // @andyy // andy@500.co

  • Andy Young // @andyy // andy@500.co

  • Andy Young // @andyy // andy@500.co

  • Andy Young // @andyy // andy@500.co

    How not to do Metrics

    Outdated information

    Just 1 view of your data

    Manual calculations

    Bad metrics lead you astray

  • Andy Young // @andyy // andy@500.co

    Growth Accountingwha..?

  • Andy Young // @andyy // andy@500.co

    Growth Accounting

  • Andy Young // @andyy // andy@500.co

    Growth Accounting

  • Andy Young // @andyy // andy@500.co

    Cohort analysis?

  • Andy Young // @andyy // andy@500.co

  • Andy Young // @andyy // andy@500.co

  • Andy Young // @andyy // andy@500.co

    Analytics = Knowledge

  • Andy Young // @andyy // andy@500.co

    Knowledge = power confidence

    sanity

  • Andy Young // @andyy // andy@500.co

    Good luck!

  • Andy Young // @andyy // andy@500.co

    A16Z: 16 Startup Metrics - and 16 MOAR Lean Analytics Book - Choosing your OMTM Josh Elman - The only metric that matters Dave McClure's Startup Metrics for Pirates Eric Riess Three Engines of Growth Mark Suster - Why misunderstanding startup

    metrics can cost you your business Intercom - SaaS metrics for fundraising Social Capital - Accounting for User Growth Sarah Tavel: Engagement Hierarchy-Core Actions

    Further references..

    http://a16z.com/2015/08/21/16-metrics/http://a16z.com/2015/09/23/16-more-metrics/http://leananalyticsbook.com/one-metric-that-matters/https://medium.com/@joshelman/the-only-metric-that-matters-ab24a585b5ea#.s42njpqghhttp://www.slideshare.net/dmc500hats/startup-metrics-for-pirates-long-versionhttp://www.startuplessonslearned.com/2008/09/three-drivers-of-growth-for-your.htmlhttps://bothsidesofthetable.com/why-misunderstanding-startup-metrics-can-cost-you-your-business-352923a53dcb#.h74chhjr0https://bothsidesofthetable.com/why-misunderstanding-startup-metrics-can-cost-you-your-business-352923a53dcb#.h74chhjr0https://bothsidesofthetable.com/why-misunderstanding-startup-metrics-can-cost-you-your-business-352923a53dcb#.h74chhjr0https://blog.intercom.io/saas-metrics-for-fundraising/https://medium.com/swlh/diligence-at-social-capital-part-1-accounting-for-user-growth-4a8a449fddfc#.zawmzzmb0https://news.greylock.com/engagement-hierarchy-core