Analytics for Startups (Gaza Sky Geeks May '17)

Andy Young // @andyy // andy@500.co
How do I Analytics?
a practical guide for
pragmatic startups

Hi, I’m Andy!
@andyy
#fb
PhotobyDanTaylor-dan@heisenbergmedia.com

Wait what, why?
Analytics?

What do we measure, and why?
Vanity metrics
Revenue metrics
Conversion rate metrics
Pirate metrics..
We need to know how we’re doing.

If you're not keeping score
there's no point playing the game -
you'll never know if you're
winning or not
- @distrodom

Today’s tools make it
super-easy to track
things
Google Analytics
Mixpanel
Localytics
KissMetrics
Branch Metrics..

Today’s tools make it
super-easy to track
things
BUT they also make it really easy to
- become overwhelmed with data
- focus on the wrong things

Typical analytics challenges/pitfalls
Drowning in too much data
Failure to select + focus on the top metrics that
matter
Not tracking the data you need to answer key
questions

Why analytics?
1. How are we doing?
- are KPIs on the right track?
2. What are the results of our experiments?
- so we can learn
3. What’s happening right now?
- did something great or terrible just happen?

How are we doing?

How’re we doing?
1. Identify top-level KPI

Identify top-level KPI
it’s hard.

Identify top-level KPI
if you pick the wrong KPIs, you're screwed.
If you pick KPIs and then ignore them, you're
screwed.
If you pick and monitor KPIs diligently, but don't
assess everything you and your whole team does
on the basis of whether your tasks are the most
effective way to grow your KPIs, you're screwed.

Andy Young // @andyy // andyyoung.co
How?

Building a Growth Model
1. Identify your traction KPI

Spoiler alert..
Ultimately it’s $$$

NOT revenue (that’s an output)
Traction KPI leads directly to revenue

The one metric that - if it’s not growing -
there’s only so long we can go kidding ourselves
we’re making any progress

Keep it simple!
There’s probably a
pre-determined answer
for how to measure your growth

Commerce: # sales
Subscription / SaaS: # subscribers
Marketplace: # transactions

2. Next, add NUANCE

Nuance metrics: help understand
the full picture behind your Traction KPI
E.g. for commerce:
Traction KPI: # sales
Nuance: average sale $; # customers

2. Next, add NUANCE
3. Add DRIVERS

DRIVERS: the things we
actually work on to grow

E.g. for marketplaces:
Traction KPI: # transactions
Drivers: # suppliers, # customers

E.g. for commerce:
Traction KPI: # sales
Drivers: # new customers, # repeat

E.g. for SaaS:
Traction KPI: # subscribers
Drivers: # new customers, # retained

2. Next, add NUANCE
3. Add DRIVERS
4. Add FUNNEL for each driver & loop

2. Next, add NUANCE
3. Add DRIVERS
4. Add FUNNEL for each driver & loop
end up with AARRR..

Growth Model Spreadsheet

Growth Model Spreadsheet
• Review weekly - zoom out vs. zoom in
• Share with whole team
• Use to predict and prioritise
• What to look at daily vs. weekly vs.
monthly
http://bit.ly/kpi-sheet

Weekly/Monthly reporting
% week-on-week or month-on-month growth
in your
One Metric That Matters
Focus. Set a target.
How to choose? Read this Lean Analytics post

Let’s see some
examples..

Other key metrics
CAC, LTV, churn

Other key metrics
Customer Acquisition Cost (CAC)
how much you spend (on average) to acquire a
customer
Lifetime Value (LTV)
How much revenue $$ an average customer
brings you in all time

If your
LTV
is greater than your
CAC
then you’re in business

If your
LTV
is greater than 3x your
CAC
then you’re in a good business

CAC & LTV: nuances
Payback period: time to recoup CAC
Magnitude of your numbers
e.g. enterprise vs. social

Calculating CAC
Simple approach: total spend / total signups
“50% of the money I spend on advertising
is wasted - the problem is
I don't know which half”
- John Wanamaker
Eventual goal: calculate CAC per channel

Calculating LTV
Problem!
You don’t have a lifetime of data
Measured LTV vs. estimated LTV
Measure actual LTV per cohort
Extrapolate revenue curve over time

Calculating LTV
Know your definitions!
MRR?! GMV?!
A16Z blog posts:
16 Startup Metrics & 16 MOAR Startup Metrics

Analysing your data

How not to do Metrics
Outdated information
Just 1 view of your data
Manual calculations
Bad metrics lead you astray

Growth Accounting
wha..?

Growth Accounting

Cohort analysis?

Getting the Datas

Collecting data
Don’t use Google Analytics!

Don’t use Google Analytics!
It’s the wrong type of tool for most key
questions.
Designed around sessions & pageviews
Instead: focus on unique users and key actions
Specific user journeys are not that important
Instead: what % of unique users
reached a particular step eventually?
Collecting data

Collecting data
Use an analytics tool focused on tracking
events/actions
and
individual user behaviour
e.g. Mixpanel, Localytics, Amplitude

Collecting data
Events vs. Properties vs. People
Events: something happened
Properties: something about what just happened
People: connect events to particular users
(people can also have properties)

What to Track?

What to Track
All key user behaviours
● pages/screens viewed, key actions taken
● anything that writes a new row or updates an
existing row in your database or user’s session store
○ e.g. add to cart, post new content
● do you have all key steps in the user funnel?
● anything that has external impact, e.g. share

Tracking events
Tip #1: Choose easy-to-read and meaningful
event names
Short!
Pick a convention; stick to it
Omit superfluous words
“user_viewed_homepage”
“Viewed homepage”

Tracking events

Tracking events
[Object] + [Action]

Tip #2: Track each user based on a distinct ID
Don’t use email address -
use autogenerated user_id from your own DB
Use aliasing to connect up events tracked
pre/post signup
Tracking events

Tip #3: Annotate your users with source data
referrer; utm tags; install tracking via AppsFlyer
1. Track a signup event
2. Add as user properties
3. Potentially also as properties to key events
Tracking events

Tip #4: (Mixpanel specific) - People vs. Events
Mixpanel won’t let you query for users
who did particular events
So, our options:
- Do this using your own DB
- Annotate your users (People) with properties
for each key event
Tracking events

Tip #5: Ecommerce/revenue tracking
Mixpanel/AppBoy etc have
native support for tracking revenue
Annotate your Purchase events with revenue data
using the relevant properties for each platform
Tracking events

Tip #6: Use a development project for testing
Tracking events

Track events from where?
Client/app vs. server
Tracking events

Tracking the funnel

Tracking the funnel
Start with the pirate metrics AARRR
Top of funnel: acquisition; signups/installs
Mid funnel: post-install events; engagement;
retention
Bottom of funnel: purchase / monetisation.

Tracking the funnel
Looking at each stage (AARRR) in aggregate
is a good start
but it will only get you so far
the “truth” is much more nuanced

Tracking the funnel
Users acquired via different channels
will have different behaviours
Different cohorts will have
different experiences of your product
Different users will have been exposed to
different A/B tests

Tracking the funnel
Key: these are all properties of your users
UTM tags: source, medium, campaign, terms
Landing page
Signup time
A/B test buckets
Referrer
Viral source

Tracking the funnel
Annotate your users in your database/analytics
system with these attributes
UTM tags: source, medium, campaign, terms
Landing page
Signup time
A/B test buckets
Referrer
Viral source

Let’s get Technical..

Implementing Tracking
Use a
Tag Manager
(e.g. Google Tag Manager)
Check out
Segment.com
for flexibility & agility

www.sitehound.co
- Free code! -

Implementing Tracking
Add your
Facebook + Google
Custom Audience /
Remarketing Pixels
Now!
Start building your audience

Analytics = Knowledge

Knowledge = power
confidence
sanity

Good luck!

● A16Z: 16 Startup Metrics - and 16 MOAR
● Lean Analytics Book - Choosing your OMTM
● Josh Elman - The only metric that matters
● Dave McClure's Startup Metrics for Pirates
● Eric Ries’s Three Engines of Growth
● Mark Suster - Why misunderstanding startup
metrics can cost you your business
● Intercom - SaaS metrics for fundraising
● Social Capital - Accounting for User Growth
● Sarah Tavel: Engagement Hierarchy-Core Actions
Further references..

Analytics for Startups (Gaza Sky Geeks May '17)

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