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Lean Analytic
Marvin
Clerics
Agate Studio
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Lean Analytics: Using data to build a better
startup faster
TDS – 12 April 2014
Lee Marvin- [email protected]
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WHAT IS LEAN ANALYTICS?
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What is Lean Analytics?
Make what you can sell, don’t sell what you can make
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What is Lean Analytics? (cont’d)
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THE LEAN ANALYTICS FRAMEWORK
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Lean Analytics Stages
Empathy • I’ve found a real, poorly-met need a reachable market faces
Stickiness
• I’ve figured out how to solve the problem in a way they will adpot and pay for
Virality
• I’ve built the righ product/features/functionality that keeps users around
Revenue • The users and features fuel growth organically and artificially
Scale
• I’ve found a sustainable, scalable business with right margin in a healthy ecosystem
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Empathy Stage: Localmind hacks Twitter
• Needed to find out if a core assumption-strangers answering questions – was valid
• Ran Twitter Exeriment instead of writing code
• Asked senders of geolocated Tweets from Times Square random questions; counted response rate
• Conclusion: high enough to proceed
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Stickiness: qidiq streamlines invites
Survey owner adds recipient to group
Survey owner asks questions
Recipient gets invite
Recipient installs mobile app
Recipient creates account
Recipient reads survey question
Recipient responds to question
Recipient sees survey results
Survey owner adds recipient to group
Survey owner asks questions
Recipient gets invite
Recipient installs mobile app
Recipient creates account
Recipient reads survey question
Recipient responds to question
Recipient sees survey results
10
-25
% R
esp
on
se R
ate
70
-80
% R
esp
on
se R
ate
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Who is worth more?
A
B
pre
sen
t
Lifetime: $200
Lifetime: $200
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Virality Stage
Users Viral Coefficient Churn &
abandonment x - > 1
• How to calculate viral coefficient:
• 2000 users sent 5000 invitation
• Your invitation rate = 2,5
• Every ten invitations get 1 sign ups
• Your acceptance rate = 0,1
• Multiply the two,you have viral coefficient 0,25
• Every customer you add will add an addition 25% of customer
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Revenue Stage: Backupify’s Customer Acquisition Payback
• Initially focused on site visitors
• Then focused on trials
• Then switched to signus
• Early 2010, CAC was $243 and ARPU was only $ 39
– Pivoted target business users
– CLV-to-CAC today is 5-6x
• Metrics: Customer Acquisition Payback
– Target is less than 12 months
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CLV calculation
25%
Monthly Churn
100/25=4
The average customers
lasts
5% Monthly
Churn
100/5=20
The average customers
lasts
2% Monthly
Churn
100/2=50
The average customers
lasts
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Scale Stage: Incremental order cost
Fixed Cost
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Six Tech-Business Archetype
E-commerce
2 Sided Market
SaaS
Mobile App
User-gen content
Media
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Lean Analytics Framework
Empathy
Stickiness
Virality
Revenue
Scale
E-commerce
2 Sided Market
SaaS Mobile
App User gen-content
Media
Model + Stages = One Metrics that Matters
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Moz cuts down on metrics
• SaaS-based SEO toolkit in the scale stage, Focus on net adds – Net adds up:
– Net adds flat:
– Net adds down:
Was a marketing campaign successful? Were customer complaints lowered?
Was a product upgrade valuable?
Can we acquire more valuable customers? What product features can increase engagement?
Can we improve customer support?
Are the new customers not in the right segment? Did a marketing campaign fail?
Did a product upgrade fail somehow? Is customer support failing apart?
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Lean Analytics Framework (detailed)
Thank You
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