Lean Analytics: Use Data to Build a Better Startup Faster (Lean Series)
Alistair Croll, Benjamin Yoskovitz
Format: PDF / Kindle (mobi) / ePub
Marc Andreesen once said that "markets that don't exist don't care how smart you are." Whether you're a startup founder trying to disrupt an industry, or an intrapreneur trying to provoke change from within, your biggest risk is building something nobody wants.
Lean Analytics can help. By measuring and analyzing as you grow, you can validate whether a problem is real, find the right customers, and decide what to build, how to monetize it, and how to spread the word. Focusing on the One Metric That Matters to your business right now gives you the focus you need to move ahead--and the discipline to know when to change course.
Written by Alistair Croll (Coradiant, CloudOps, Startupfest) and Ben Yoskovitz (Year One Labs, GoInstant), the book lays out practical, proven steps to take your startup from initial idea to product/market fit and beyond. Packed with over 30 case studies, and based on a year of interviews with over a hundred founders and investors, the book is an invaluable, practical guide for Lean Startup practitioners everywhere.
important question in the survey is “How would you feel if you could no longer use this product or service?” In Sean’s experience, if 40% of people (or more) say they’d be very disappointed to lose the service, you’ve found a fit, and now it’s time to scale. 50 PART TWO: FINDING THE RIGHT METRIC FOR RIGHT NOW The Long Funnel In the early days of the Web, transactional websites had relatively simple conversion funnels. Visitors came to the home page, navigated to the product they wanted,
can tackle several different things simultaneously. But even with all these concurrent efforts, Joanna says that one metric * http://www.seomoz.org/blog/mozs-18-million-venture-financing-our-story-metrics-and-future 56 PART TWO: FINDING THE RIGHT METRIC FOR RIGHT NOW stands above the rest: Net Adds. This metric is the total of new paid subscribers (either conversions from free trials or direct paid signups) minus the total who cancelled. “Net Adds helps us quickly see high cancel days (and
downright bad—they distract you, consume resources, spam your site, or muddy your analytics. When you get a wave of visibility, few of the resulting visitors will actually engage with your product. Many are just driving by. As Vinicius Vacanti, cofounder and CEO of Yipit, recalls in a blog post inspired by his company’s 2010 launch:* Was that our big launch? Why didn’t more people sign up? Why didn’t people complete the sign-up flow? Why weren’t people coming back? Now that people covered our
purchases. On the other hand, e-commerce retailers that don’t expect frequent, repeat sales focus on getting as much from their buyer as they can and on getting the buyer to spread the word. PATTERN | What Mode of E-commerce Are You? Kevin Hillstrom of Mine That Data, a consultancy focused on helping companies understand how their customers interact with advertising, * In his post “Amazon’s $23,698,655.93 book about flies,” UC Berkeley biologist Michael Eisen explains how algorithmic price
engagement—essentially how much a site can make from those impressions based on the content it covers and the people who visit. Click-through rates How many of the impressions actually turn into money. Content/advertising balance The balance of ad inventory rates and content that maximizes overall performance. Audience and Churn The most obvious metric for a media site is audience size. If we assume that an ad will get industry-standard click-through rates, then the more people who visit your