How to use metrics to optimize your product, marketing, and business by Dave McClure, Dan Olsen, and Ted Rheingold at O'Reilly San Francisco Web 2.0 Expo, April 2009.

1. Become a Web 2.0 Jedi: How to Use the Force of Product & Marketing Metrics to Optimize Your Business Web 2.0 Expo Apr 3, 2009 #w2e #metrics

2. Startup Metrics for Pirates: AARRR! Web 2.0 Expo SF April 2009 Dave McClure, Founders Fund http://www.foundersfund.com/ http://500hats.typepad.com/ http://slideshare.net/dmc500hats/

9. AARRR!: 5-Step Startup Metrics Model Website.com R evenue $$$ Biz Dev Ads, Lead Gen, Subscriptions, ECommerce A CQUISITION SEO SEM Apps & Widgets Affiliates Email PR Biz Dev Campaigns, Contests Direct, Tel, TV Social Networks Blogs Domains R etention Emails & Alerts System Events & Time-based Features Blogs, RSS, News Feeds

15. TeachStreet Metrics v1: Eye Chart Madness

17. TeachStreet: 45-day Claim Rates ( Seattle , Portland )

19. Example Conversion Dashboard (note: *not* actuals… your mileage may vary) Stage Conversion Status Conv. % Est. Value (*not* cost) Acquisition Visitors -> Site/Widget/Landing Page (2+ pages, 10+ sec, 1+ clicks = don’t abandon) 60% $.05 Activation “ Happy” 1 st Visit; Usage/Signup (clicks/time/pages, email/profile reg, feature usage) 15% $.25 Retention Users Come Back; Multiple Visits (1-3x visits/mo; email/feed open rate / CTR) 5% $1 Referral Users Refer Others (cust sat >=8; viral K factor > 1; ) 1% $5 Revenue Users Pay / Generate $$$ (first txn, break-even, target profitability) 2% $50

26. Dan Olsen CEO, YourVersion Web 2.0 Expo Apr 3, 2009 How to Use the Force of Metrics to Optimize your Web 2.0 Product

27. The Force of Metrics is Real The Force of Metrics? Really?

32. Prioritizing Product Ideas by ROI Copyright © 2009 Olsen Solutions LLC Investment (developer-weeks) Return (Value Created) Idea C Idea B Idea D Idea A Idea F 1 1 2 3 4 2 3 4 ?

34. Improving Signup Page Conversion Copyright © 2009 Olsen Solutions LLC

35. Improving Sign In/Registration Flow Copyright © 2009 Olsen Solutions LLC Open Account Sign in Account Selection Register 56% 44% Forget Password Registration Process 45% drop off (20% of total) 36% overall drop off for this step 70% (32% of Total) 17% drop off (10% of total) 20% drop off (6% of total) 30% (14% of Total) 80% (26% of Total) 55% (24% of Total) 64% of Total Change Password 83% (46% of Total)

36. Redesigned User Flow Improved Registration Conversion Rate Copyright © 2009 Olsen Solutions LLC 37% improvement in conversion rate Released New Design

39. [email_address] @danolsen www.yourversion.com May the Force of Metrics be with you!

40. Dogster, Inc. Case Study Ted Rheingold blog.dogster.com / @tedr How actionable metrics informed us we were chasing our tail the wrong key results yet still guided us to the primary objective … bacon making money

44. LANDING PAGE Welcome

45. Landing Page Cute Overload

46. LANDING PAGE Daily Candy

47. LADING PAGE Dog Info

48. REGISTRATION PAGE -Activate

51. HOMEPAGE - Current

52. CRAZY EGG Searchers

53. Dogster Search Traffic

54. Ted Rheingold Top Dog, Dogster, Inc. blog.dogster.com twitter: @tedr Web2Expo - 2009

55. Questions? #metrics @davemcclure @danolsen @tedr

56. Appendix

57. Startup Metrics Activation

62. Startup Metrics Retention

68. Startup Metrics Acquisition

74. Startup Metrics Referral

75. Website.com Focus on driving referrals * after * users have a “ happy ” experience; avg score >= 8 out of 10 Referral Acquisition SEO SEM Apps & Widgets Affiliates Email PR Biz Dev Campaigns, Contests Direct, Tel, TV Social Networks Blogs Domains Retention Emails & Alerts System Events & Time-based Features Blogs, RSS, News Feeds

79. Startup Metrics Revenue

80. Website.com Revenue This is the part *you* still have to figure out… (we don’t know jack about your business) R evenue $$$ Biz Dev Ads, Lead Gen, Subscriptions, ECommerce Acquisition SEO SEM Apps & Widgets Affiliates Email PR Biz Dev Campaigns, Contests Direct, Tel, TV Social Networks Blogs Domains Retention Emails & Alerts System Events & Time-based Features Blogs, RSS, News Feeds

86. Design, Optimize for Conversion

87. Kano Model: User Needs & Satisfaction Copyright © 2008 Olsen Solutions LLC User Satisfaction User Dissatisfaction Performance (more is better) Delighter (wow) Need not met Need fully met Must Have Needs & features migrate over time

88. Olsen’s Hierarchy of Web User Needs (adapted from Maslow) Copyright © 2008 Olsen Solutions LLC Is the site up when I want to use it? Is the site fast enough? Does the functionality work? Does the functionality meet my needs? Customer’s Perspective What does it mean to us? Uptime Page Load Time Absence of Bugs Feature Set Usability & Design Decreasing Dissatisfaction Increasing Satisfaction How easy to use is it?

89. Adding Metrics and Optimization to your Product Process Copyright © 2008 Olsen Solutions LLC Plan Design Develop Business Objectives Product Objectives Prioritized Feature List Scoping Requirements & Design Code Test Launch Site Level Feature Level Optimize Metrics & User Feedback