Lean Startup - Customer Development - Aarrr metrics

How to catch the fishAnd learn how to improve your

fishing power

WHY I AM HERETo kick your ass...

WHY I AM HERETime to wake up...

WHAT DO YOU REALLY KNOW ABOUT YOUR REALITY?

THERE IS NO WAY BACK!

WHAT IS THE PROBLEM YOU ARE TRYING TO SOLVE?

WHAT IS YOUR MOST IMPORTANT CUSTOMER SEGMENT?

WHO IS YOUR BEST CUSTOMER?

WHY IS THIS YOUR BEST CUSTOMER?

HOW DO YOU (PLAN TO) MAKE YOUR MONEY?

HAVE YOU COLLABORATED WITH YOUR (POTENTIAL) CUSTOMERS?

WHO TRIED THIS BEFORE?

WHAT IS YOUR MOST USED FEATURE?

THERE IS NO WAY BACK!

YOU’RE DOING TOO MUCH

KILL A FEATUREEVERY WEEK

DON’T HANG ON TO THINGS THAT YOU MIGHT BUILD SOMEDAY

CREATE HYPER FOCUS

TAKE OUT A FEATURE AND MONITOR THE REACTIONS

OPTIMIZE FOR HAPPINESS

Either they love it or hate it, all other reactions means you’re screwed

AARRRDave McClures’

NARRATIVE OF YOUR PROCESS

Create different storylines for different combinations

EXAMPLESLet’s take a look at this meta-framework

#1 DOGGIECOLR

Social Network for Dog LoversMakes money through advertising and affiliate sales of lush dog collars.

Key business driversAdvertising and affiliates need large traffic/page views so growth and retention are key.

VISIT

SIGN-UP

CREATE PROFILE

POST PICTURES COMMENT

SHARE PICTURES

INVITE FRIENDS

BUY COLAR

ACQUISITION

ACQUISITION

ACTIVATION

ACTIVATION

REFERRAL

REVENUE

#2 AGILESAMBA

Project management tool for Agile startupsMakes money through monthly subscriptions. Has a free trial period.

Key business driversConversion to paid users and cancellation rates.

VISIT

SIGN-UP

CREATE PROJECT

UPGRADES PAID

CANCELS ACCOUNT

ACQUISITION

ACQUISITION

ACTIVATION

REVENUE

REVENUE

ACQUISITIONLet’s take a closer look at this meta-framework

ARE YOU FISHING IN THE RIGHT POND?

HOW DO YOU GET NEW CUSTOMERS?

IS YOUR MESSAGE REACHING THE RIGHT PEOPLE?

ARE YOU FOCUSSING ON THE RIGHT PEOPLE?

ACTIVATION

ARE YOU USING THE RIGHT BAIT?

HOW DO YOU LAND POTENTIAL CUSTOMERS?

IS YOUR MESSAGE CLEAR?

ARE YOU HELPING YOUR CUSTOMERS?

RETENTION

DO YOU USE THE RIGHT MATERIAL?

HOW DO YOU MAKE CUSTOMERS STAY?

DO YOU OFFER THE RIGHT EXPERIENCE?

DO YOU OFFER QUALITY?

REFERRAL

HOW DO YOUR FISHES LURE IN MORE FISHES?

HOW IMPORTANT IS WORD OF MOUTH?

HOW EASY IS IT FOR CUSTOMERS TO SHARE THEIR EXPERIENCES?

REVENUE

SELLING YOUR FISH

HOW DO YOU (PLAN TO) MAKE YOUR MONEY?

ARE YOU CATCHING THE RIGHT FISH?

TIME TO START MEASURING AND LEARN

VANITY METRICSMetrics that make you feel good but don’t tell anything…

Google Analytics

TechCrunch

WHAT WOULD INDICATE SUCCES?

150 000 UsersNumerous superior competitors…

WHAT WOULD INDICATE SUCCES?

Let us examine Facebook…

• 75% of the users visit the site 1 or multiple times a day

• 1 month after the launh in a student campus they could acquire 90%

of the student body

Metrics that matter!

• Value Hypothesis How do we add more value to our cusotmers live?

• Growth Hypothesis Through what engine will we acquire new customers?

Metrics that matter!

• Value Hypothesis How do we add more value to our cusotmers live?

• Growth Hypothesis Through what engine will we acquire new customers?

Metrics are…- Actionable- Auditable- Accessible

COHORTFact: New users are more engaged! Group users in month or week.

A-B TESTINGLet different groups of customers validate different new features

RATE OF VALIDATED LEARNING

Experiment, validate learning & change!

VIRAL COEFFICIENTFocus on Acquisition & Referral – Revenu is side effect

Viral Coeff = Invites * Conversion RateExamples: Facebook, Hotmail…

LIFETIME VALUE (LTV)Focus on Activation & Retention – Payment is central

LTV = Cost of Acquiring Customer / Earnings from that customerExamples: Amazon, Match.com…

Recommended Software

• Ubounce• KISS Metrics• Survey.io• Wufoo• LinkShiftr

WE DONT’T KNOW ENOUGH!

WE’RE DOING TO MUCH!

WE CAN USE AARRR TO BUILD THE NARRATIVE OF YOUR STRATEGY!

AcquisitionActivationRetentionReferralRevenue

WE SHOULD FOCUS ON REAL METRICS

Metrics are…- Actionable- Auditable- Accessible

WE SHOULD GO OUT AND COLLABORATE WITH OUR CUSTOMERS!

J

THERE IS NO WAY BACK!

Thank you

Slidedeck by: Erik Talboom – Jurgen De Smet – Maarten Volders