Growth - TDC2014

GrowthTDC2014

9/10 startups fail

(Startup Genome Project, study on pre-mature scaling)

74% of high growth internet startups fail due to premature scaling

1/10How to be the successfull

startup?

Computer Engineer, PUC-Rio

CTO & Co-Founder @ Passei Direto

Product Management, Growth

Internet Business, Software Engineering

Andre Simoes

Transition to Growth

Product/Market Fit

Growth


Product/Market Fit

Growth


Product/Market Fit

Growth

Find your product/market fit before you run out of money

Focus: Customer DevelopmentExperiments: PivotMetrics: Qualitative

“How would you feel if you could no longer us this product?”Sean Ellis

“How would you feel if you could no longer us this product?”Sean Ellis

-40% Very disappointed

Iterate

+40% Very disappointed

Move to next stage

NPS – Net Promoter Score

NPS = (% de Promoters) – (% de Detractors)

The Net Promoter Score can vary from -100 to 100

De 0 a 6 = “Detractors" De 7 a 8 = “Passives" De 9 a 10 = “Promoters"

“In a scale 0 to 10, how likely is it that you would recommend this product to a friend?”


Product/Market Fit

Growth

Focus: GrowthExperiments: OptimizationsMetrics: Quantitative

Implement users analytics

Identify must have benefits

CRO

Hire growth expert

Improve business model

Conversion rate = desire - friction


Product/Market Fit

Growth

Explore different acquisition channelsFind different marketsExpand internationally

Warning!

UGC products may need growth to assure PMF

Network Effect

Metcalfe’s Law

U = k*n²(utility of a network)

Transition to GrowthTransition to Growth

Product/Market Fit

Growth

Focus on the right metrics

The key is to map out the user lifecycle for your product

Key Metrics

Acquisition

Activation

Retention

Revenue

Referral

How do users find you?

Do users have a great first experience?

Do users come back?

Do users tell others?

How do you make money?

Key Metrics

Acquisition

Activation

Retention

Revenue

Referral



Do users come back?



PR, SEM, SEO, Campaigns, Blogs, Email

Landing pages, step-by-step, find something cool

News feed, transactional emails, alerts, notifications

Invite friends, share content

Ads, subscriptions

Growth Metrics

Acquisition

Activation

Retention

Revenue

Referral



Do users come back?







Ads, subscriptions

Value Metrics

Acquisition

Activation

Retention

Revenue

Referral



Do users come back?







Ads, subscriptions

AcquisitionHow do users find you?

Word of Mouth

ActivationDo users have a great first experience?

Getting users to the

A-HAMOMENT

What’s the one core activity of your product?


How can you get people there as fast as possible?



Our AHA moment at Twitter was ‘Once a user follow 30 people, they’re more or

less active forever.’

- Josh Elman, ex-Product Lead at Twitter






‘Reach 7 friends in 10 days.’

- Chamath Palihapitiya, ex-Product Lead at Facebook








‘Put at least one file in one Dropbox folder’

- ChenLi Wang, Business Ops at Dropbox








‘Put at least one file in one Dropbox folder’

- ChenLi Wang, Business Ops at Dropbox

‘Find one relevant study material.’

- Passei Direto

Examples

Examples

RetentionDo users come back?

Transactional Emails

NotificationsNews feed Gamification

(+) New User Registrations (+) 20.000

(+) Ressurected Users (+) 1.050

(-) Deactivations (-) 50

(-) Gone Inactive (-) 10.000

(+/-) Net Change (+) 11.000

User accountingTrack it daily

Total Active Users 1.000.000

Total Active 1.011.000

Yesterday

Today

Cohort Analysis

Group of people who share a particular characteristic over a priod of time

Twitter (tweets) Pinterest (pins)

ReferralDo users tell others?

Examples

Single viral loop

Single viral k-factor

k = (% who invite) x (#avg invites) x (%accept)

Single viral k-factor

k = (% who invite) x (#avg invites) x (%accept)

70% 10 20%1,4

Double viral loop

1) Register2) Invite3) Nudge existing users4) Existing users invite new users

(1) Register

(2) Invite

(3) Nudge Existing users

(4) Existing users invite more users

You need to measure conversions at each step

124,300

37,737

13,2086,868

46% 35% 65%

Acquisition Activation Retention Revenue

124,300

820 189 23

1% 23% 15%


At first your numbers will be really shitty


124,300

820 189 23

1% 23% 15%


Focus here!


124,300

12,3062,830 340

15% 23% 15%


Measure different channels seperatly

Stage User State Conversion % Visitors

Acquisition Visit the site 100% 1,534,000

Acquisition Sign up step 1 4% 67,386

Acquisition Sign up step 2 4% 57,277

Activation Buy something 72% 41,177

Retention Back at least once in the month 39% 16,227

Retention Back and buy something 10% 4,007

Referral Invite 1+ users who just visit the site 21% 4,007

Referral Invite 1+ users who visit the site and sign up 5% 4,007

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

57,277

41,177

4,007 4,007

Conversion funnel

Acquisition Activation Engagement Referral

Acquisition Channel SEO

72% 10% 5%

Don’t focus on acquisition or referral if your activation rate is 1%

Don’t focus on acquisition or referral if your activation rate is 1%

What happen if you do that?

This...

And this..

The product don’t sustain it self and loses traction

Then..

Growth Hacking

Sean Ellis (2010)

“A person whose true north is growth”

Growth Hacking is a set of tatics and best practices for dealing with user growth

Growth Hacker job is to figure out how to move users from

one state to the next

Acquisition

Activation

Retention

Referral

??

Growth Hacker

CROSEO

Analytics

PR

Email mkt

A-ha moment

SEM

Onboarding UX

A/B testing

Crawlers

Habits

Famous Growth Hacks

Insight

Use the own mailing system to tell others about it

Hack

Put ‘PS: I love you. Get your free e-mail at Hotmail’ at the bottom of each e-mail

12M users

12M users

Insight

Craiglist is where people look for rooms They could cross-post to Craigslist

Hack

Even without an API, AirBnb team figured out a way to hack the craiglist submission process (w/o API)

1)

2)

Insight

Traditional marketing wasn’t working. CAC $300 to $99 LTV. Activating customers was the key to paying accounts

Hack

Giving away free space in exchange for word of mouth referralsGiving away free space in exchange for activation

Activation Referral

Insight

They could leverage the size of Facebook and its open graph permissions to drive growth

Hack

One click invite send and account creation with Facebook Connect

Insight

It’s not how many Tweets you send, it’s how many people you followUser follow 5-10 people, they are far more likely to remain active

Hack

Drive product onboarding not around publishing, but following

Mistakes that kill Startups

• Premature Scaling• Too many features• Ego• Lack or excess of metrics• Lack or excess of validations• Data-driven x Data-informed

What do I do next?

Be creative.Use your data.Kill features.

Ship. Measure. Learn

Questions?

[email protected]

• Names mentioned• Sean Ellis• Dave McLure• Steve Blank

• Analytics and Customer Relationship tools• Mixpanel• Kissmetrics• Google Analytics• Optimizely (a/b test)• SEOMoz• Geckoboard• Uservoice• Qualaroo

• Infrastructure tools• Zabbix• Pagerduty• Pingdom• Blitz.io

• Startup Genome Report• http://gallery.mailchimp.com/8c534f3b5ad611c0ff8aeccd5/files/Startup_Genome_Report.pdf

References asked by the audience

Technology

Growth - TDC2014