Data-Driven Startups
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David Cancel discusses how startups can become data-driven by focusing on an operating dashboard, conversion funnels, and cohort analysis. He emphasizes that the key is using data to test assumptions and optimize the business, rather than getting caught up in complex analytics or visualizations. Startups should prioritize validating whether customers care about their idea and solving problems over searching for patterns or secrets to success.
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Data-Driven Startups
- 1. David Cancel- @dcancelhttp://davidcancel.com/ Data-Driven Startups NYVC Speaker Series New York, NY, September 2010 Twitter hash tags: #datadriven #nyvc
- 2. David Cancel- @dcancel “In God we trust; all others must bring data.” - W. Edwards Deming
- 3. David Cancel- @dcancel Who am I Companies Advisor Investor
- 4. David Cancel- @dcancel The Problem: 98% of the people who visit your site, leave never to return.
- 5. David Cancel- @dcancel We love making something from nothing. Yes, we’re hiring.
- 6. David Cancel- @dcancel Talking, Reading and Dreaming are Worthless Get it done.
- 7. David Cancel- @dcancel #JFDI Just Fucking Do It. Please.
- 8. David Cancel- @dcancel Lean Startup? Customer Development? Who cares...
- 9. David Cancel- @dcancel It can all be summarized into one sentence.
- 10. David Cancel- @dcancel Does anyone give a shit about your dumb idea?
- 11. David Cancel- @dcancel There are NO repeatable patterns for startup success. None. Stop looking for one.
- 12. David Cancel- @dcancel Do I have your attention now. ;-)
- 13. David Cancel- @dcancel Buy this book This is the best startup book I’ve ever read. I personally own two copies. Required reading for startup engineers. You can find it on Lulu.com
- 14. David Cancel- @dcancel And this one too. This is more of a “manual” than a “book”. Good for everyone on your team to read. If people care about your product read this to learn how to determine if you can turn your hobby into a business. You can find this on Amazon.
- 15. David Cancel- @dcancel But remember that you will not find any “secrets” in those books. Stop looking for one. Go solve a problem.
- 16. David Cancel- @dcancel Ok enough ranting.
- 17. David Cancel- @dcancel Time to talk data.
- 19. David Cancel- @dcancel Optimize your startup for learning by creating a data-driven framework.
- 20. David Cancel- @dcancel Analytics & A/B Testing are also not the answer.
- 21. David Cancel- @dcancel Use quantitative & qualitative data to test YOUR assumptions.
- 22. David Cancel- @dcancel A/B Testing. Multivariate Testing. Huh?
- 23. David Cancel- @dcancel Multivariate Testing is Useless.
- 24. David Cancel- @dcancel You are way too small to matter.
- 25. David Cancel- @dcancel The point of testing is to prove or disprove assumptions quickly.
- 26. David Cancel- @dcancel Multivariate testing leads to a non-gratifying experience because it takes too long.
- 27. David Cancel- @dcancel The vast majority of sites should only use A/B testing. This means you.
- 28. David Cancel- @dcancel Shameless Plug: ABTests.com Learn by example
- 29. David Cancel- @dcancel Always Be Testing Just Don’t be Stupid.
- 30. David Cancel- @dcancel The Local Maxima Problem Your Design A Better Design Optimized at Local Maxima Current I stole this slide from Joshua Porter - @bokardo
- 31. David Cancel- @dcancel “Design is never done” - Joshua Porter
- 32. David Cancel- @dcancel Optimize your startup for learning not data.
- 33. David Cancel- @dcancel The 3 Steps to Data-Driven Startup Enlightenment
- 34. David Cancel- @dcancel Data-Driven Startup Checklist Operating Dashboard Conversion Funnel Analysis Cohort Analysis
- 35. David Cancel- @dcancel Skip the fancy shit and use Google Spreadsheet. Ghettofabulous.
- 36. David Cancel- @dcancel Step 1: The Operating Dashboard.
- 37. David Cancel- @dcancel A single place for your entire team to see where you suck the most.
- 38. David Cancel- @dcancel Company-wide dashboard Everyone! Including interns. Fictional
- 39. David Cancel- @dcancel Every initiative has to map to positive changes in these numbers.
- 40. David Cancel- @dcancel Kill all features that don’t improve your operating metrics.
- 41. David Cancel- @dcancel Only move to the second step after you’ve mastered the Operating Dashboard.
- 42. David Cancel- @dcancel Step 2: Conversion Funnels
- 43. David Cancel- @dcancel Metrics are fun, but Funnels kick ass.
- 44. David Cancel- @dcancel Fancy Forget pretty visualizations
- 45. David Cancel- @dcancel Pretty Wasted time
- 46. David Cancel- @dcancel Keep it raw & ugly Do this tomorrow morning.
- 47. David Cancel- @dcancel Monitor your funnel weekly to see how changes are impacting your business.
- 48. David Cancel- @dcancel If you aren’t doing this you are implementing lots of useless features.
- 49. David Cancel- @dcancel Checkout my friends at KissMetrics.com to capture your funnel level data.
- 50. David Cancel- @dcancel Step 3: Cohort Analysis
- 51. David Cancel- @dcancel This is the “shot caller” of all analyses. Respect.
- 52. David Cancel- @dcancel Cohort Analysis by Fred Wilson (post)
- 53. David Cancel- @dcancel Without a cohort analysis you are flying blind.
- 54. David Cancel- @dcancel Is your churn going up or down?
- 55. David Cancel- @dcancel You don’t have a clue until you’ve done a cohort analysis.
- 56. David Cancel- @dcancel Time for some more ranting.
- 57. David Cancel- @dcancel Data Visualizations are a Waste of Time.
- 58. David Cancel- @dcancel Don’t use anything except for these 3 charts.
- 60. David Cancel- @dcancel Focus on your business. Not data.
- 61. David Cancel- @dcancel This is usually when I get some “data” questions.
- 62. David Cancel- @dcancel Things clueless people ask What type of algorithms do you use? What metrics should I use? Anything related to a regression analysis. Anything related to data visualization.
- 63. David Cancel- @dcancel No one cares how smart you are except for your mom.
- 64. David Cancel- @dcancel Only one thing matters.
- 65. David Cancel- @dcancel Does anyone give a shit about your dumb idea?
- 66. David Cancel- @dcancel Thank You! David Cancel Email: dcancel@dcancel.comTwitter: dcan http://davidcancel.com
Editor's Notes
- Focused my career on building, advising & investing in data-powered startups. Data is their competitive advantage.
- It’s ok to not have all the answers. Design your company around learning and rapid development. If your app doesn’t embarrass you, you wasted too much time refining it.
- At the end of the day you have to DO. Be scrappy and just get shit done.
- If you had found one would you be writing books or starting and selling companies?
- It’s not about A/B testing & Analytics. It’s not about metrics. It’s about building your startup to be data-driven, because it’s all about optimizing for learning.
- Testing web pages is stupid, validating assumptions is smart
- multivariate testing is for suckers. stick with a/b tests
- Sorry someone had to break it to you.
- Optimize for agile learning. Fast learning iterations.
- Focus on people. Customer experience is the key. This is usually when people start to ask me data related questions.