Lean AnalyticsBringing 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

1980

2000

Dot Com Boom (1997 - 2000

Dot Com Crash (2000 - 2001)

...

Toyota

2010

Steve Blank - 4 Steps to the Epiphany (2005)

Lean Startup "coined" (2008)

The Lean Startup (2011)

The Lean Startup @ SXSW (2012)

The Lean Startup Conference (2012)

Lean 2.0 - The Growth of a Management Science?

Pre History

Lean Startup 1.0

Lean Startup 2.0Lean Analytics (2013)Lean UX (2013)

Image Credit - http://brendanmarsh.com/lean/the-lean-startup-validation-board/

Lean Analytics in a Slide

Small Batch Production

A/B TestingCohort Analysis Funnel Analysis

5 Stage Lifecycle

Startup Life Cycle Actionable Metrics

Business Model Types

Lean Principles

Analytics for Lean

Lean Analytics

CASE STUDIES and EXAMPLES

OMTM Benchmarking

Refresh - Actionable Metrics

Small Batch Production

A/B TestingCohort Analysis Funnel Analysis

5 Stage Lifecycle

Startup Life Cycle Actionable Metrics

Business Model Types

Lean Principles

Analytics for Lean

Lean Analytics

CASE STUDIES and EXAMPLES

OMTM Benchmarking

● Must go up over time

● NOT comparative

● Often a simple total

● Typically not granular

● Focused on story telling

● Not directly tied to biz. health

Vanity Metrics Actionable Metrics

EXAMPLES

● Total downloads

● FB likes

● Registered users

● Enables comparison

● Often a ratio

● Often cohort based

● Drives decision making

● Can answer the question "did that

experiment work"?

EXAMPLES

● Conversion or retention rate

● Churn rate

● Shopping cart size

The 6 Startup Business Models

Small Batch Production

A/B TestingCohort Analysis Funnel Analysis

5 Stage Lifecycle

Startup Life Cycle Actionable Metrics

Business Model Types

Lean Principles

Analytics for Lean

Lean Analytics

CASE STUDIES and EXAMPLES

OMTM Benchmarking

- CAC - Conversion rate - Cart size - Return purchase - LTV (or Payback)

E Commerce

- CAC - Engagement - Free/paid conversion - Churn - LTV

SAAS

- CAC - MAU - Free/paid conversion - Churn - ARPU

Free App

- MAU - Engagement - PV (or equivalent) - CTR - CPM

Media

- MAU - Engagement - % Creators - CTR - CPM

UGC (Social)

- Inventory (Supply) - Buyers (Demand) - Search Effectiveness - Ratings

Marketplace

Takeaway - Know your funnel!

The 6 Startup Business Models

The Lean Analytics Stages

Small Batch Production

A/B TestingCohort Analysis Funnel Analysis

5 Stage Lifecycle

Startup Life Cycle Actionable Metrics

Business Model Types

Lean Principles

Analytics for Lean

Lean Analytics

CASE STUDIES and EXAMPLES

OMTM Benchmarking

The Lean Analytics Stages

EMPATHY

STICKINESS

REVENUE

VIRALITY

SCALE

Takeaway - Know your stage (but feel free to use other terms)

One Metric That Matters

Small Batch Production

A/B TestingCohort Analysis Funnel Analysis

5 Stage Lifecycle

Startup Life Cycle Actionable Metrics

Business Model Types

Lean Principles

Analytics for Lean

Lean Analytics

CASE STUDIES and EXAMPLES

OMTM Benchmarking

● 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

One Metric That Matters

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

Case Study - Wooboard OMTM

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

Small Batch Production

A/B TestingCohort Analysis Funnel Analysis

5 Stage Lifecycle

Startup Life Cycle Actionable Metrics

Business Model Types

Lean Principles

Analytics for Lean

Lean Analytics

CASE STUDIES and EXAMPLES

OMTM Benchmarking

Some Benchmarking Examples

Conversion - expect 2% - aim for 10%

Cart abandonment- expect 65%!

E Commerce

Free trial - request card - 2% try, 50% buy

Free trial - no card - 10% try, 25% buy

Monthly churn - < 5% for growth - < 2% for scale

Growth - increase customer revenue by 20% a year - upsell 2% of users/month

SAAS

App size - stay below 50MB to avoid download drop off

App CAC - Shoot for $.50 to $.75 - make sure CAC is less than LTV!

Conversion - free to aid - 2% - In app purchases - 1.5%

Free App

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