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Lean Analytics - Bringing Back the Book Report

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Isaac Souweine
Isaac Souweine

A quick review of Lean Analytics by Ben Yoskovitz and Alistair Croll. Presented at Singapore Lean Startup Circle.

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Lean Analytics Bringing Back the Book Report Presented at Singapore Lean Startup Circle April 10, 2013
Hello! ● Product guy ● Mix of corp and startup ● 5+ years in SEA ● Yahoo Product Marketing ● Pollenizer SEA GM ● @sonofsarah
Lean Analytics - Bringing Back the Book Report
Lean Analytics - Bringing Back the Book Report
Lean 2.0 - The Growth of a Management Science? 1980 Toyota ... Dot Com Boom (1997 - 2000 Pre History 2000 Dot Com Crash (2000 - 2001) Steve Blank - 4 Steps to the Epiphany (2005) Lean Startup "coined" (2008) 2010 Lean Startup 1.0 The Lean Startup (2011) The Lean Startup @ SXSW (2012) The Lean Startup Conference (2012) Lean Analytics (2013) Lean Startup 2.0 Lean UX (2013)
Image Credit - http://brendanmarsh.com/lean/the-lean-startup-validation-board/
Lean Analytics - Bringing Back the Book Report
Lean Analytics in a Slide CASE STUDIES and EXAMPLES OMTM Benchmarking Lean Analytics Business Model Types 5 Stage Lifecycle Analytics for Cohort Analysis A/B Testing Funnel Analysis Lean Lean Principles Small Batch Production Startup Life Cycle Actionable Metrics
Refresh - Actionable Metrics CASE STUDIES and EXAMPLES OMTM Benchmarking Lean Analytics Business Model Types 5 Stage Lifecycle Analytics for Cohort Analysis A/B Testing Funnel Analysis Lean Lean Principles Small Batch Production Startup Life Cycle Actionable Metrics
Vanity Metrics Actionable Metrics ● Must go up over time ● Enables comparison ● NOT comparative ● Often a ratio ● Often a simple total ● Often cohort based ● Typically not granular ● Drives decision making ● Focused on story telling ● Can answer the question "did that ● Not directly tied to biz. health experiment work"? EXAMPLES EXAMPLES ● Total downloads ● Conversion or retention rate ● FB likes ● Churn rate ● Registered users ● Shopping cart size
The 6 Startup Business Models CASE STUDIES and EXAMPLES OMTM Benchmarking Lean Analytics Business Model Types 5 Stage Lifecycle Analytics for Cohort Analysis A/B Testing Funnel Analysis Lean Lean Principles Small Batch Production Startup Life Cycle Actionable Metrics
The 6 Startup Business Models E Commerce SAAS Free App - CAC - CAC - CAC - Conversion rate - Engagement - MAU - Cart size - Free/paid conversion - Free/paid conversion - Return purchase - Churn - Churn - LTV (or Payback) - LTV - ARPU Media UGC (Social) Marketplace - MAU - MAU - Inventory (Supply) - Engagement - Engagement - Buyers (Demand) - PV (or equivalent) - % Creators - Search Effectiveness - CTR - CTR - Ratings - CPM - CPM Takeaway - Know your funnel!
The Lean Analytics Stages CASE STUDIES and EXAMPLES OMTM Benchmarking Lean Analytics Business Model Types 5 Stage Lifecycle Analytics for Cohort Analysis A/B Testing Funnel Analysis Lean Lean Principles Small Batch Production Startup Life Cycle Actionable Metrics
The Lean Analytics Stages SCALE REVENUE VIRALITY STICKINESS EMPATHY Takeaway - Know your stage (but feel free to use other terms)
One Metric That Matters CASE STUDIES and EXAMPLES OMTM Benchmarking Lean Analytics Business Model Types 5 Stage Lifecycle Analytics for Cohort Analysis A/B Testing Funnel Analysis Lean Lean Principles Small Batch Production Startup Life Cycle Actionable Metrics
One Metric That Matters ● Pick one metric that is critical to biz health ● Focus the team around it (put it on screen!) ● Optimize the hell out of it ● Pick a new metric as biz grows and changes
Case Study - Wooboard OMTM
Case Study - Wooboard OMTM PHASE METRIC TYPE METRIC Is there a problem? User Interest Company sign ups Do we have a solution? Engagement Woos per user Is there a market? Revenue % of premium conversions This is a classic SaaS OMTM progression. See also Backupify. ● Phase 1 - site visits ● Phase 2 - trials ● Phase 3 - monthly recurring revenue Takeaway - Pick an OMTM (or at least get data focused)
"The core idea behind Lean Analytics is this: by knowing the kind of business you are, and the stage you are at, you can track and optimize the One Metric that Matters to your startup right now." - B Yoskovitz and A Croll
Benchmarking CASE STUDIES and EXAMPLES OMTM Benchmarking Lean Analytics Business Model Types 5 Stage Lifecycle Analytics for Cohort Analysis A/B Testing Funnel Analysis Lean Lean Principles Small Batch Production Startup Life Cycle Actionable Metrics
Some Benchmarking Examples E Commerce SAAS Free App Conversion Free trial - request card App size - expect 2% - 2% try, 50% buy - stay below 50MB to avoid - aim for 10% download drop off Cart abandonment Free trial - no card - expect 65%! - 10% try, 25% buy App CAC - Shoot for $.50 to $.75 Monthly churn - make sure CAC is less than - < 5% for growth LTV! - < 2% for scale Conversion Growth - free to aid - 2% - increase customer revenue - In app purchases - 1.5% by 20% a year - upsell 2% of users/month Takeaway - Lines in the sand are key to measuring success
Lean Analytics Truisms ● Know your funnel! ● Know where you're at in the lifecycle ● Establish data focus ● Set clear success metrics ● Instrument and track early! ● Make sure that you are allocating resources to test a measurable hypothesis
THANK YOU

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Lean Analytics - Bringing Back the Book Report

  • 1. Lean Analytics Bringing Back the Book Report Presented at Singapore Lean Startup Circle April 10, 2013
  • 2. Hello! ● Product guy ● Mix of corp and startup ● 5+ years in SEA ● Yahoo Product Marketing ● Pollenizer SEA GM ● @sonofsarah
  • 5. Lean 2.0 - The Growth of a Management Science? 1980 Toyota ... Dot Com Boom (1997 - 2000 Pre History 2000 Dot Com Crash (2000 - 2001) Steve Blank - 4 Steps to the Epiphany (2005) Lean Startup "coined" (2008) 2010 Lean Startup 1.0 The Lean Startup (2011) The Lean Startup @ SXSW (2012) The Lean Startup Conference (2012) Lean Analytics (2013) Lean Startup 2.0 Lean UX (2013)
  • 6. Image Credit - http://brendanmarsh.com/lean/the-lean-startup-validation-board/
  • 8. Lean Analytics in a Slide CASE STUDIES and EXAMPLES OMTM Benchmarking Lean Analytics Business Model Types 5 Stage Lifecycle Analytics for Cohort Analysis A/B Testing Funnel Analysis Lean Lean Principles Small Batch Production Startup Life Cycle Actionable Metrics
  • 9. Refresh - Actionable Metrics CASE STUDIES and EXAMPLES OMTM Benchmarking Lean Analytics Business Model Types 5 Stage Lifecycle Analytics for Cohort Analysis A/B Testing Funnel Analysis Lean Lean Principles Small Batch Production Startup Life Cycle Actionable Metrics
  • 10. Vanity Metrics Actionable Metrics ● Must go up over time ● Enables comparison ● NOT comparative ● Often a ratio ● Often a simple total ● Often cohort based ● Typically not granular ● Drives decision making ● Focused on story telling ● Can answer the question "did that ● Not directly tied to biz. health experiment work"? EXAMPLES EXAMPLES ● Total downloads ● Conversion or retention rate ● FB likes ● Churn rate ● Registered users ● Shopping cart size
  • 11. The 6 Startup Business Models CASE STUDIES and EXAMPLES OMTM Benchmarking Lean Analytics Business Model Types 5 Stage Lifecycle Analytics for Cohort Analysis A/B Testing Funnel Analysis Lean Lean Principles Small Batch Production Startup Life Cycle Actionable Metrics
  • 12. The 6 Startup Business Models E Commerce SAAS Free App - CAC - CAC - CAC - Conversion rate - Engagement - MAU - Cart size - Free/paid conversion - Free/paid conversion - Return purchase - Churn - Churn - LTV (or Payback) - LTV - ARPU Media UGC (Social) Marketplace - MAU - MAU - Inventory (Supply) - Engagement - Engagement - Buyers (Demand) - PV (or equivalent) - % Creators - Search Effectiveness - CTR - CTR - Ratings - CPM - CPM Takeaway - Know your funnel!
  • 13. The Lean Analytics Stages CASE STUDIES and EXAMPLES OMTM Benchmarking Lean Analytics Business Model Types 5 Stage Lifecycle Analytics for Cohort Analysis A/B Testing Funnel Analysis Lean Lean Principles Small Batch Production Startup Life Cycle Actionable Metrics
  • 14. The Lean Analytics Stages SCALE REVENUE VIRALITY STICKINESS EMPATHY Takeaway - Know your stage (but feel free to use other terms)
  • 15. One Metric That Matters CASE STUDIES and EXAMPLES OMTM Benchmarking Lean Analytics Business Model Types 5 Stage Lifecycle Analytics for Cohort Analysis A/B Testing Funnel Analysis Lean Lean Principles Small Batch Production Startup Life Cycle Actionable Metrics
  • 16. One Metric That Matters ● Pick one metric that is critical to biz health ● Focus the team around it (put it on screen!) ● Optimize the hell out of it ● Pick a new metric as biz grows and changes
  • 17. Case Study - Wooboard OMTM
  • 18. Case Study - Wooboard OMTM PHASE METRIC TYPE METRIC Is there a problem? User Interest Company sign ups Do we have a solution? Engagement Woos per user Is there a market? Revenue % of premium conversions This is a classic SaaS OMTM progression. See also Backupify. ● Phase 1 - site visits ● Phase 2 - trials ● Phase 3 - monthly recurring revenue Takeaway - Pick an OMTM (or at least get data focused)
  • 19. "The core idea behind Lean Analytics is this: by knowing the kind of business you are, and the stage you are at, you can track and optimize the One Metric that Matters to your startup right now." - B Yoskovitz and A Croll
  • 20. Benchmarking CASE STUDIES and EXAMPLES OMTM Benchmarking Lean Analytics Business Model Types 5 Stage Lifecycle Analytics for Cohort Analysis A/B Testing Funnel Analysis Lean Lean Principles Small Batch Production Startup Life Cycle Actionable Metrics
  • 21. Some Benchmarking Examples E Commerce SAAS Free App Conversion Free trial - request card App size - expect 2% - 2% try, 50% buy - stay below 50MB to avoid - aim for 10% download drop off Cart abandonment Free trial - no card - expect 65%! - 10% try, 25% buy App CAC - Shoot for $.50 to $.75 Monthly churn - make sure CAC is less than - < 5% for growth LTV! - < 2% for scale Conversion Growth - free to aid - 2% - increase customer revenue - In app purchases - 1.5% by 20% a year - upsell 2% of users/month Takeaway - Lines in the sand are key to measuring success
  • 22. Lean Analytics Truisms ● Know your funnel! ● Know where you're at in the lifecycle ● Establish data focus ● Set clear success metrics ● Instrument and track early! ● Make sure that you are allocating resources to test a measurable hypothesis