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Startup Metrics 4 Pirates
                                      AARRR
                                      AARRR
                                        !!




       Seoul, Korea
        Oct 2012 - #AARRR

 Dave McClure @DaveMcClure
              http://500.co
      http://500hats.typepad.com
   http://slideshare.net/dmc500hats
WARNING:
WARNING!!!
 this deck is guaranteed to offend,
provide tragically incorrect advice,
   and perhaps get you arrested.

             Deal with it.
Dave McClure
           Developer, Entrepreneur, Marketer, Investor, GEEK!




00’s & 10’s:
• Investor: Founders Fund, Facebook fbFund, 500 Startups
• Companies: Mint.com, SlideShare, Twilio, WildFire, SendGrid
• Marketing: PayPal, Simply Hired, Mint.com, O’Reilly Media
• Speaker: Lean Startup, Web 2.0, Stanford/Facebook

80’s & 90’s:
• Entrepreneur: Founder/CEO Aslan Computing (acq’d)
• Developer: Windows / SQL DB consultant (Intel, MSFT)
• Engineer: Johns Hopkins‘88, BS Eng / Applied Math
500 Startups
Seed Fund & Accelerator
   (350+ companies, 20+ countries)
[ This Talk ]
Topics

•   Basic Concepts of “Startup Metrics 4 Pirates”
•   3 Steps to AARRR: Product, Market, Revenue
•   Constructing MVP: Just ONE Feature?
•   Design (UX) & Distribution (MKTG)
•   Winning: Market, Revenue, Profit?
Key Concepts

•   MVP = F(Customer, Problem, Time or $$$)
•   PMF = F(Customer, Solution, Alternatives)
•   AUX = F(Customer, Design/UX, Metrics)
•   ACQ = F(Customer, Campaign, Vol, Cost, Conv)
•   WIN! = F(Customer, Usage, Dist, Revenue)
Platforms 2.0
Search, Social, Mobile
What’s a Platform?
Successful Platforms
have 3 Things:               Features
                              Features
1) Features
2) Users
3) Money
                    Growth           Profit

                         Awesome

                                ..
                         Profitable
            Users
            Users           ..
                          Growth Money
                                    Money
Distribution Platforms
Customer Reach: 100M+

  • Search: Google (SEO/SEM)

  • Social: Facebook, Twitter, Zynga, LinkedIn

  • Mobile: Apple (iPhone, iPad), Android

  • Media: YouTube (Video), Blogs, Photos

  • Comm: Email, Chat, SMS, Voice
DO Marketing!
                 (It’s Not Evil)

•   Marketing is Both Qualitative + Quantitative
•   Qualitative: Create Emotion, Drive Action
•   Quantitative: Measure Results of Action
•   Design (UX) & Distribution (MKTG) Matter
•   Volume (#), Cost ($), Conversion (%)
[ Interesting Shit. ]
Read Geoffrey Miller
Sex + Evolution + Consumer Mktg = Awesome Sauce
More Great Shit.
  Psychology + Comics
[The Lean Startup]
[Startup Metrics 4 Pirates]
Just Gimme the GOOD Metrics.
            Users, Pages, Clicks, Emails, $$$...?

         Q: Which of these is best? How do you know?
           • 1,000,000 one-time, unregistered unique visitors
           • 500,000 visitors who view 2+ pages / stay 10+ sec
the
good       • 200,000 visitors who clicked on a link or button
stuff.
           • 20,000 registered users w/ email address
           • 2,000 passionate fans who refer 5+ users / mo.
           • 1,000 monthly subscribers @ $5/mo
The Lean Startup
•   Talk to Customers; Discover Problems
•   Progress ≠ Features (Less = More)
•   Fast, Frequent Iteration (+ Feedback Loop)
•   Measure Conversion; Compare 2+ Options
•   Focus on Product/Market Fit (don’t “launch” b4)
•   Keep it Simple & Actionable
Discover Customers
(Steve Blank, SteveBlank.com)
Iterate, Dammit.
(Eric Ries, StartupLessonsLearned.com)


                 IDEAS




     LEARN                BUILD




       DATA
                          CODE


               MEASURE
Product/Market Fit b4 “Launch”
             (Sean Ellis, Startup-Marketing.com)




Startup-Marketing.com
AARRR!: Startup Metrics Model
                                     SEO
                                      SEO          Campaigns,
                                                    Campaigns,
                          SEM
                           SEM               PR
                                              PR    Contests
                                                     Contests        Biz
          Social
           Social                                                     Biz
         Networks
          Networks                                                   Dev
                                                                      Dev
                           Blogs
                            Blogs                    Affiliates
                                                      Affiliates
        Apps &&
         Apps                                                        Direct,
                                                                      Direct,
        Widgets
        Widgets                     Email
                                     Email                           Tel, TV
                                                                      Tel, TV

                 Domains
                  Domains
                                        ACQUISITION
                                        ACQUISITION




        Emails & Alerts
        Emails & Alerts



Blogs, RSS,
Blogs, RSS,
                               n
                          ntio
News Feeds
News Feeds
                  R   et e

                                                   Ads, Lead Gen,                Biz Dev
                                                                                  Biz Dev
                                                    Ads, Lead Gen,
           System Events &
           System Events &                         Subscriptions,
                                                    Subscriptions,
                                                                      Rev
                                                                      Reve
         Time-based Features
         Time-based Features                        ECommerce
                                                     ECommerce
                                                                          enue
                                                                           nue $
                                                   Website.com                 $$$
                                                                                 $$
Startup Metrics for Pirates

•   Acquisition: users come to site from various channels
•   Activation: users enjoy 1st visit: "happy” experience
•   Retention: users come back, visit site multiple times
•   Referral: users like product enough to refer others
•   Revenue: users conduct some monetization behavior

                                           AARRR!!
                                           AARRR




     (note: If you’re in a hurry, Google
     “Startup Metrics” & watch 5m video)
One Step at a Time.

1. Make a Good Product: Activation & Retention
2. Market the Product: Acquisition & Referral
3. Make Money: Revenue & Profitability

“You probably can’t save your Ass and your Face
at the same time… so choose carefully.” – DMC
Startup Challenges

Startups have problems in 3 key areas:
• Management: Set Priorities, Define Key Metrics

• Product: Build “Right” Features. Measure, Iterate.

• Marketing: Distribution, Distribution, Distribution.
                 (Search, Social, Mobile)
Key Concepts

•   MVP = F(Customer, Problem, Time or $$$)
•   PMF = F(Customer, Solution, Alternatives)
•   AUX = F(Customer, Design/UX, Metrics)
•   ACQ = F(Customer, Campaign, Vol, Cost, Conv)
•   WIN! = F(Customer, Usage, Dist, Revenue)
[ Constructing MVP ]
Role: Founder / CEO
Q: Which Customers? Problems? Metrics? Why?
A: Focus on Critical Few Actionable Metrics
  (
Optimize 4 Happiness
           (both User + Business)               $$$

•   Define States of User + Business Value
•   Prioritize (Estimate) Relative Value of Each State
•   Move Users: Lower Value -> Higher Value
•   Optimize for User Happiness + Business $$$
•   Achieve High Cust Value + Low ACQ$ @ Scale
What is Minimum Viable Product?
MVP = F(Customer, Problem, Time or $$$)
• Focus on CUSTOMER
   – Qualitative Discovery, Quantitative Validation

• Get to know habits, problems, desires (FUN MATTERS)
   – what causes pain? what causes pleasure?

• Define 1-5 TESTABLE Conversion Metrics of Value
   –   Attention/Usage (session time, clicks)
   –   Customer Data (email, connect, profile)
   -   Revenue (direct or indirect)
   -   Retention (visits over time, cohort behavior)
   -   Referral (users evangelize to other users)

• Note: Paid Solutions drive FOCUS (& pay rent)
Example Conversion Metrics
                  (note: *not* actuals… your mileage may vary)

  Stage                     Conversion Status                         Conv.   Est. Value
                                                                        %     (*not* cost)

Acquisition         Visitors -> Site/Widget/Landing Page               60%       $.05
                (2+ pages, 10+ sec, 1+ clicks = don’t abandon)

Activation              “Happy” 1st Visit; Usage/Signup                15%       $.25
              (clicks/time/pages, email/profile reg, feature usage)

Retention            Users Come Back; Multiple Visits                  5%         $1
                 (1-3x visits/mo; email/feed open rate / CTR)

 Referral                    Users Refer Others                        1%         $5
                       (cust sat >=8; viral K factor > 1; )

 Revenue                    Users Pay / Generate $$$                   2%         $50
                   (first txn, break-even, target profitability)
KILL A FEATURE.
               Something Sucks. Find It. KILL It.


• STOP ADDING FEATURES.
• Find the ONE THING that users LOVE.
• How to figure out? TAKE. SHIT. AWAY.
• When they SCREAM, you’ve FOUND it.
• Then Bring it Back… Only Better.

• Tip: KILL a Feature Every Week.
[ Getting 2 PMF ]
Role: Product / Eng / Design
Q: What Features to Build? Why? When are you “Done”?
A: Easy-to-Find, Fun/Useful, Unique Features that
   Increase Conversion (stop iterating when increase decelerates)

•   Wireframes = Conversion Steps
•   Measure, A/B Test, Iterate FAST (daily/weekly)
•   Optimize for Conversion Improvement
     – 80% on existing feature optimization
     – 20% on new feature development
What is Product/Market Fit?
PMF = F(Customer, Solution, Alternatives*)

• Product / Market Fit occurs when:
   – Customers like your stuff better than other options
   – Not static, Not optimal – just Local Max 4 F(customers, solution, time)
   – make sure you’re moving in optimal direction 2 local max
• Q: what competitive solutions are available?
   – … that your customers know about?
   – how are you diff/same?
   – in ways that people care about? (will pay for)


• KILL a FEATURE regularly (or rotate 1% tests)
   – Q: what is MOST $ cust pay 4 LEAST func MVP relative 2 BEST alt?


• NICHE 2 WIN: RE-define cust + DIFFerentiated features
Better or Different.

                Funny!




                                  Shocking
Accepted
                                     !!!




               Not Funny.
[ Testing 4 AUX ]
Discover Meaning
         Why Should Users CARE About Your Product?




Kathy Sierra:
“Creating
Passionate
Users”
Discover Meaning
                Keywords, Images, Call-to-Action

Top 10 - 100 words                     Call-to-Action
    • Your Brand / Products                 • Words
    • Customer Needs / Benefits             • Images
    • Competitor’s Brand / Products         • Context
    • Semantic Equivalents                  • Button/Link
    • Misspellings                          • Emotion


Relevant images                        Result
    • People                              • Positive?
    • Products                            • Negative?
    • Problems                            • Neutral (= Death)
    • Solutions                           • A/B test & Iterate
How 2 Tell if Design/UX is Good?
[ Metrics 4 ACQ ]
Role: Marketing / Sales

Q: What channels? Which users? Why?
A: High Volume (#), Low Cost ($), High Conv (%)

•    Design & Test Multiple Marketing Channels + Campaigns
•    Select & Focus on Best-Performing Channels & Themes
•    Optimize for conversion to target CTAs, not just site/landing page
•    Match/Drive channel cost to/below revenue potential

•     Low-Hanging Fruit:
    –    Blogs
    –    SEO/SEM
    –    Landing Pages
    –    Automated Emails
Example Marketing Channels


•   PR                   •   Email
•   Contest              •   SEO / SEM
•   Biz Dev              •   Blogs / Bloggers
•   Direct Marketing     •   Viral / Referral
•   Radio / TV / Print   •   Affiliate / CPA
•   Dedicated Sales      •   Widgets / Apps
•   Telemarketing        •   LOLCats ;)
MAARRRketing Plan
  ACQ = F(Customer, Campaign, Vol, Cost, Conv)
Marketing Plan = Target Customer Acquisition Channels
   • 3 Important Factors = Volume (#), Cost ($), Conversion (%)
   • Measure conversion to target customer actions
   • Test audience segments, campaign themes, Call-To-Action (CTAs)

[Gradually] Match Channel Costs => Revenue Potential
    • Increase Vol. & Conversion, Decrease Cost, Optimize for Revenue Potential
    • Avg Txn Value (ATV), Ann Rev Per User (ARPU), Cust Lifetime Value (CLV)
    • Design channels that (eventually) cost <20-50% of target ATV, ARPU, CLV

Consider Costs, Scarce Resource Tradeoffs
   • Actual $ expenses
   • Marketing time & resources
   • Product/Engineering time & resources
   • Cashflow timing of expense vs. revenue, profit
[ What is WINNING? ]
Choose #WINNING Metrics

WIN = F(Customer, Usage, Dist, Revenue)

• after MVP functional use, several options:
  – better Usage – Activation & Retention (AUX)
  – more Users -- Distribution / Acquisition
  – mo' Money --- U Wants 2 Get Paid, Yo.


• understand ACQ$ vs REV$, optimize 4 short-term
  – High(er) volume usually a priority
  – costs may change as vol increases
[ The Lean Investor ]
Startup 2.0:
       “Lean Investor” Model
Method: Invest in startups using incremental
 investment, iterative development. Start with
 lots of small experiments, filter out failure, and
 expand investment upon success.

• Incubator: $0-250K (“Product Viability”)
• Seed: $100K-$2M (“Expand Distribution”)
• Venture: $1M-$5M (“Maximize Revenue”)
Investment #1: Incubate
                             (“Product”)
• Structure
   – 1-3 founders
   – $25K-$250K investment
   – Incubator environment: multiple peers, mentors/advisors


• Build Functional Prototype / “Minimum Viable Product” (MVP):
   –   Concept->Alpha, ~3-6 months
   –   Develop Minimal Critical Feature Set => Get to “It Works”
   –   Instrument Basic Dashboard, Conversion Metrics
   –   Test Cust. Adoption (10-1000 users) / Cust. Satisfaction (Scale: 1-10)

• Demonstrate Concept, Reduce Product Risk, Test Functional Use
• Develop Metrics & Filter for Follow-on Investment
Investment #2: Seed
• Structure
                               (“Market”)
   – 2-5 person team
   – $100K-$2M investment
   – Syndicate of Angel Investors / Small VC Funds


• Improve Product, Expand Market, Test Revenue:
   –   Alpha->Beta, ~6-12 months
   –   Customer Sat ≥ 6 => Get to “Doesn’t Suck”
   –   Setup A/B Testing Framework, Optimize Conversion
   –   Test Marketing Campaigns, Cust Acqstn Channels

• Prove Solution/Benefit, Assess Market Size
• Test Channel Cost, Revenue Opportunity
• Determine Org Structure, Key Hires
Investment #3: Venture
                             (“Revenue”)
• Structure
   – 5-10 person team
   – $1M-$5M investment
   – VC Investors


• Make Money, Get to Sustainability:
   –   Beta->Production, 12-18 months
   –   Customer Sat ≥ 8 => “It Rocks, I’ll Tell My Friends”
   –   MktgPlan => Predictable Channels / Campaigns + Budget
   –   Scalability & Infrastructure, Customer Service & Operations
   –   Connect with Distribution Partners

• Prove/Expand Market, Operationalize Business
• Future Milestones: Profitable/Sustainable, Exit Options
NOTE:
    Don’t Pitch Me, Bro.
Seriously: Don’t. F**king. Pitch Me.
     (and don’t email me either, cuz i won’t read it)
Links & Resources
Additional References:
• Influence: The Psychology of Persuasion Robert Cialdini (book)
• The Mating Mind Geoffrey Miller (book)
• Putting the Fun in Functional Amy Jo Kim (etech 2006 preso)
• Futuristic Play Andrew Chen (blog)
• Don’t Make Me Think Steve Krug (book)
• Designing for the Social Web Joshua Porter (book, website)
• Startup Lessons Learned Eric Ries (blog)
• Customer Development Methodology Steve Blank (presentation, blog)
• Startup-Marketing.com Sean Ellis (blog)
• KISSmetrics.com Hiten Shah / Neil Patel (website)
• How To Pitch a VC Dave McClure (slides, NSFW)
• Understanding Comics Scott McCloud (book)

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Startup Metrics 4 Pirates (Seoul)

  • 1. Startup Metrics 4 Pirates AARRR AARRR !! Seoul, Korea Oct 2012 - #AARRR Dave McClure @DaveMcClure http://500.co http://500hats.typepad.com http://slideshare.net/dmc500hats
  • 3. WARNING!!! this deck is guaranteed to offend, provide tragically incorrect advice, and perhaps get you arrested. Deal with it.
  • 4. Dave McClure Developer, Entrepreneur, Marketer, Investor, GEEK! 00’s & 10’s: • Investor: Founders Fund, Facebook fbFund, 500 Startups • Companies: Mint.com, SlideShare, Twilio, WildFire, SendGrid • Marketing: PayPal, Simply Hired, Mint.com, O’Reilly Media • Speaker: Lean Startup, Web 2.0, Stanford/Facebook 80’s & 90’s: • Entrepreneur: Founder/CEO Aslan Computing (acq’d) • Developer: Windows / SQL DB consultant (Intel, MSFT) • Engineer: Johns Hopkins‘88, BS Eng / Applied Math
  • 5. 500 Startups Seed Fund & Accelerator (350+ companies, 20+ countries)
  • 7. Topics • Basic Concepts of “Startup Metrics 4 Pirates” • 3 Steps to AARRR: Product, Market, Revenue • Constructing MVP: Just ONE Feature? • Design (UX) & Distribution (MKTG) • Winning: Market, Revenue, Profit?
  • 8. Key Concepts • MVP = F(Customer, Problem, Time or $$$) • PMF = F(Customer, Solution, Alternatives) • AUX = F(Customer, Design/UX, Metrics) • ACQ = F(Customer, Campaign, Vol, Cost, Conv) • WIN! = F(Customer, Usage, Dist, Revenue)
  • 10. What’s a Platform? Successful Platforms have 3 Things: Features Features 1) Features 2) Users 3) Money Growth Profit Awesome .. Profitable Users Users .. Growth Money Money
  • 11. Distribution Platforms Customer Reach: 100M+ • Search: Google (SEO/SEM) • Social: Facebook, Twitter, Zynga, LinkedIn • Mobile: Apple (iPhone, iPad), Android • Media: YouTube (Video), Blogs, Photos • Comm: Email, Chat, SMS, Voice
  • 12. DO Marketing! (It’s Not Evil) • Marketing is Both Qualitative + Quantitative • Qualitative: Create Emotion, Drive Action • Quantitative: Measure Results of Action • Design (UX) & Distribution (MKTG) Matter • Volume (#), Cost ($), Conversion (%)
  • 14. Read Geoffrey Miller Sex + Evolution + Consumer Mktg = Awesome Sauce
  • 15. More Great Shit. Psychology + Comics
  • 16. [The Lean Startup] [Startup Metrics 4 Pirates]
  • 17. Just Gimme the GOOD Metrics. Users, Pages, Clicks, Emails, $$$...? Q: Which of these is best? How do you know? • 1,000,000 one-time, unregistered unique visitors • 500,000 visitors who view 2+ pages / stay 10+ sec the good • 200,000 visitors who clicked on a link or button stuff. • 20,000 registered users w/ email address • 2,000 passionate fans who refer 5+ users / mo. • 1,000 monthly subscribers @ $5/mo
  • 18. The Lean Startup • Talk to Customers; Discover Problems • Progress ≠ Features (Less = More) • Fast, Frequent Iteration (+ Feedback Loop) • Measure Conversion; Compare 2+ Options • Focus on Product/Market Fit (don’t “launch” b4) • Keep it Simple & Actionable
  • 20. Iterate, Dammit. (Eric Ries, StartupLessonsLearned.com) IDEAS LEARN BUILD DATA CODE MEASURE
  • 21. Product/Market Fit b4 “Launch” (Sean Ellis, Startup-Marketing.com) Startup-Marketing.com
  • 22. AARRR!: Startup Metrics Model SEO SEO Campaigns, Campaigns, SEM SEM PR PR Contests Contests Biz Social Social Biz Networks Networks Dev Dev Blogs Blogs Affiliates Affiliates Apps && Apps Direct, Direct, Widgets Widgets Email Email Tel, TV Tel, TV Domains Domains ACQUISITION ACQUISITION Emails & Alerts Emails & Alerts Blogs, RSS, Blogs, RSS, n ntio News Feeds News Feeds R et e Ads, Lead Gen, Biz Dev Biz Dev Ads, Lead Gen, System Events & System Events & Subscriptions, Subscriptions, Rev Reve Time-based Features Time-based Features ECommerce ECommerce enue nue $ Website.com $$$ $$
  • 23. Startup Metrics for Pirates • Acquisition: users come to site from various channels • Activation: users enjoy 1st visit: "happy” experience • Retention: users come back, visit site multiple times • Referral: users like product enough to refer others • Revenue: users conduct some monetization behavior AARRR!! AARRR (note: If you’re in a hurry, Google “Startup Metrics” & watch 5m video)
  • 24. One Step at a Time. 1. Make a Good Product: Activation & Retention 2. Market the Product: Acquisition & Referral 3. Make Money: Revenue & Profitability “You probably can’t save your Ass and your Face at the same time… so choose carefully.” – DMC
  • 25. Startup Challenges Startups have problems in 3 key areas: • Management: Set Priorities, Define Key Metrics • Product: Build “Right” Features. Measure, Iterate. • Marketing: Distribution, Distribution, Distribution. (Search, Social, Mobile)
  • 26. Key Concepts • MVP = F(Customer, Problem, Time or $$$) • PMF = F(Customer, Solution, Alternatives) • AUX = F(Customer, Design/UX, Metrics) • ACQ = F(Customer, Campaign, Vol, Cost, Conv) • WIN! = F(Customer, Usage, Dist, Revenue)
  • 28. Role: Founder / CEO Q: Which Customers? Problems? Metrics? Why? A: Focus on Critical Few Actionable Metrics (
  • 29. Optimize 4 Happiness (both User + Business) $$$ • Define States of User + Business Value • Prioritize (Estimate) Relative Value of Each State • Move Users: Lower Value -> Higher Value • Optimize for User Happiness + Business $$$ • Achieve High Cust Value + Low ACQ$ @ Scale
  • 30. What is Minimum Viable Product? MVP = F(Customer, Problem, Time or $$$) • Focus on CUSTOMER – Qualitative Discovery, Quantitative Validation • Get to know habits, problems, desires (FUN MATTERS) – what causes pain? what causes pleasure? • Define 1-5 TESTABLE Conversion Metrics of Value – Attention/Usage (session time, clicks) – Customer Data (email, connect, profile) - Revenue (direct or indirect) - Retention (visits over time, cohort behavior) - Referral (users evangelize to other users) • Note: Paid Solutions drive FOCUS (& pay rent)
  • 31. Example Conversion Metrics (note: *not* actuals… your mileage may vary) Stage Conversion Status Conv. Est. Value % (*not* cost) Acquisition Visitors -> Site/Widget/Landing Page 60% $.05 (2+ pages, 10+ sec, 1+ clicks = don’t abandon) Activation “Happy” 1st Visit; Usage/Signup 15% $.25 (clicks/time/pages, email/profile reg, feature usage) Retention Users Come Back; Multiple Visits 5% $1 (1-3x visits/mo; email/feed open rate / CTR) Referral Users Refer Others 1% $5 (cust sat >=8; viral K factor > 1; ) Revenue Users Pay / Generate $$$ 2% $50 (first txn, break-even, target profitability)
  • 32. KILL A FEATURE. Something Sucks. Find It. KILL It. • STOP ADDING FEATURES. • Find the ONE THING that users LOVE. • How to figure out? TAKE. SHIT. AWAY. • When they SCREAM, you’ve FOUND it. • Then Bring it Back… Only Better. • Tip: KILL a Feature Every Week.
  • 33. [ Getting 2 PMF ]
  • 34. Role: Product / Eng / Design Q: What Features to Build? Why? When are you “Done”? A: Easy-to-Find, Fun/Useful, Unique Features that Increase Conversion (stop iterating when increase decelerates) • Wireframes = Conversion Steps • Measure, A/B Test, Iterate FAST (daily/weekly) • Optimize for Conversion Improvement – 80% on existing feature optimization – 20% on new feature development
  • 35. What is Product/Market Fit? PMF = F(Customer, Solution, Alternatives*) • Product / Market Fit occurs when: – Customers like your stuff better than other options – Not static, Not optimal – just Local Max 4 F(customers, solution, time) – make sure you’re moving in optimal direction 2 local max • Q: what competitive solutions are available? – … that your customers know about? – how are you diff/same? – in ways that people care about? (will pay for) • KILL a FEATURE regularly (or rotate 1% tests) – Q: what is MOST $ cust pay 4 LEAST func MVP relative 2 BEST alt? • NICHE 2 WIN: RE-define cust + DIFFerentiated features
  • 36. Better or Different. Funny! Shocking Accepted !!! Not Funny.
  • 37. [ Testing 4 AUX ]
  • 38. Discover Meaning Why Should Users CARE About Your Product? Kathy Sierra: “Creating Passionate Users”
  • 39. Discover Meaning Keywords, Images, Call-to-Action Top 10 - 100 words Call-to-Action • Your Brand / Products • Words • Customer Needs / Benefits • Images • Competitor’s Brand / Products • Context • Semantic Equivalents • Button/Link • Misspellings • Emotion Relevant images Result • People • Positive? • Products • Negative? • Problems • Neutral (= Death) • Solutions • A/B test & Iterate
  • 40. How 2 Tell if Design/UX is Good?
  • 41. [ Metrics 4 ACQ ]
  • 42. Role: Marketing / Sales Q: What channels? Which users? Why? A: High Volume (#), Low Cost ($), High Conv (%) • Design & Test Multiple Marketing Channels + Campaigns • Select & Focus on Best-Performing Channels & Themes • Optimize for conversion to target CTAs, not just site/landing page • Match/Drive channel cost to/below revenue potential • Low-Hanging Fruit: – Blogs – SEO/SEM – Landing Pages – Automated Emails
  • 43. Example Marketing Channels • PR • Email • Contest • SEO / SEM • Biz Dev • Blogs / Bloggers • Direct Marketing • Viral / Referral • Radio / TV / Print • Affiliate / CPA • Dedicated Sales • Widgets / Apps • Telemarketing • LOLCats ;)
  • 44. MAARRRketing Plan ACQ = F(Customer, Campaign, Vol, Cost, Conv) Marketing Plan = Target Customer Acquisition Channels • 3 Important Factors = Volume (#), Cost ($), Conversion (%) • Measure conversion to target customer actions • Test audience segments, campaign themes, Call-To-Action (CTAs) [Gradually] Match Channel Costs => Revenue Potential • Increase Vol. & Conversion, Decrease Cost, Optimize for Revenue Potential • Avg Txn Value (ATV), Ann Rev Per User (ARPU), Cust Lifetime Value (CLV) • Design channels that (eventually) cost <20-50% of target ATV, ARPU, CLV Consider Costs, Scarce Resource Tradeoffs • Actual $ expenses • Marketing time & resources • Product/Engineering time & resources • Cashflow timing of expense vs. revenue, profit
  • 45. [ What is WINNING? ]
  • 46. Choose #WINNING Metrics WIN = F(Customer, Usage, Dist, Revenue) • after MVP functional use, several options: – better Usage – Activation & Retention (AUX) – more Users -- Distribution / Acquisition – mo' Money --- U Wants 2 Get Paid, Yo. • understand ACQ$ vs REV$, optimize 4 short-term – High(er) volume usually a priority – costs may change as vol increases
  • 47. [ The Lean Investor ]
  • 48. Startup 2.0: “Lean Investor” Model Method: Invest in startups using incremental investment, iterative development. Start with lots of small experiments, filter out failure, and expand investment upon success. • Incubator: $0-250K (“Product Viability”) • Seed: $100K-$2M (“Expand Distribution”) • Venture: $1M-$5M (“Maximize Revenue”)
  • 49. Investment #1: Incubate (“Product”) • Structure – 1-3 founders – $25K-$250K investment – Incubator environment: multiple peers, mentors/advisors • Build Functional Prototype / “Minimum Viable Product” (MVP): – Concept->Alpha, ~3-6 months – Develop Minimal Critical Feature Set => Get to “It Works” – Instrument Basic Dashboard, Conversion Metrics – Test Cust. Adoption (10-1000 users) / Cust. Satisfaction (Scale: 1-10) • Demonstrate Concept, Reduce Product Risk, Test Functional Use • Develop Metrics & Filter for Follow-on Investment
  • 50. Investment #2: Seed • Structure (“Market”) – 2-5 person team – $100K-$2M investment – Syndicate of Angel Investors / Small VC Funds • Improve Product, Expand Market, Test Revenue: – Alpha->Beta, ~6-12 months – Customer Sat ≥ 6 => Get to “Doesn’t Suck” – Setup A/B Testing Framework, Optimize Conversion – Test Marketing Campaigns, Cust Acqstn Channels • Prove Solution/Benefit, Assess Market Size • Test Channel Cost, Revenue Opportunity • Determine Org Structure, Key Hires
  • 51. Investment #3: Venture (“Revenue”) • Structure – 5-10 person team – $1M-$5M investment – VC Investors • Make Money, Get to Sustainability: – Beta->Production, 12-18 months – Customer Sat ≥ 8 => “It Rocks, I’ll Tell My Friends” – MktgPlan => Predictable Channels / Campaigns + Budget – Scalability & Infrastructure, Customer Service & Operations – Connect with Distribution Partners • Prove/Expand Market, Operationalize Business • Future Milestones: Profitable/Sustainable, Exit Options
  • 52. NOTE: Don’t Pitch Me, Bro. Seriously: Don’t. F**king. Pitch Me. (and don’t email me either, cuz i won’t read it)
  • 53. Links & Resources Additional References: • Influence: The Psychology of Persuasion Robert Cialdini (book) • The Mating Mind Geoffrey Miller (book) • Putting the Fun in Functional Amy Jo Kim (etech 2006 preso) • Futuristic Play Andrew Chen (blog) • Don’t Make Me Think Steve Krug (book) • Designing for the Social Web Joshua Porter (book, website) • Startup Lessons Learned Eric Ries (blog) • Customer Development Methodology Steve Blank (presentation, blog) • Startup-Marketing.com Sean Ellis (blog) • KISSmetrics.com Hiten Shah / Neil Patel (website) • How To Pitch a VC Dave McClure (slides, NSFW) • Understanding Comics Scott McCloud (book)

Notes de l'éditeur

  1. I know, too many bullets…