Pirate Metrics & Growth Hacks Workshop at Barcelona TechDemoDay 2014

Pirate Metrics &  
Growth Hacks
Pol
Valls
Soler

@polvallssoler!
" "linkedin.com/in/polvallssoler!
" "slideshare.net/polvallssoler!
"!
Reddit for spanglish geeks: http://zumogeek.com/ !
iOS app for discovering people nearby: http://joinerapp.com/ !
Advising entrepreneurs at La Salle Technova Barcelona!
Pol Valls Soler !

Currently creating:!
Co-creator of:!
Moneda Catalana (Catalan Cryptocurrency): http://moneda.cat/ !
Feel Real Estate Barcelona Property: http://feelrealestate.com/

Before 2000!
•  Sun Servers!
•  Oracle DB!
•  Exodus Hosting!
•  12-24mo dev cycle!
•  6-18mo sales cycle!
•  <100M people online!
•  $1-2M seed round!
•  $3-5M Series A!
•  Sand Hill Road crawl!
•  Big, Fat, Dinosaur Startup!
After 2008!
•  AWS, Google, PayPal, FB, TW!
•  Cloud + Open Source SW!
•  Lean Startup / Startup Wknd!
•  3-90d dev cycle!
•  SaaS / online sales!
•  >3B people online!
•  <$100K incub + <$1M seed!
•  $1-3M Series A!
•  Angel List global visibility!
•  Lean, Little, Cockroach Startup!
Some context: Before & After 2 Dot-Com Crashes
Source:500startups!
Daft Punk Startup: !
Simpler, Faster, Cheaper, Smarter

•  LESS Capital required to build product, get to market
–  Dramatically reduced $$$ on servers, software, bandwidth
–  Crowdfunding, KickStarter, Angel List, Funders Club, etc
–  Cheap access to online platforms for 100M+ consumers, smallbiz, etc
•  MORE Customers via ONLINE platforms (100M+ users)
–  Search (Google)
–  Social (Facebook, Twitter)
–  Mobile (Apple, Android)
–  Local (Yelp, Groupon, Living Social)
–  Media (YouTube, Pinterest, Instagram, Tumblr)
–  Comm (Email, IM/Chat, Voice, SMS, etc)
•  LOTS of little bets: Accelerators, Angels, Angel List, Small Exits
–  Y Combinator, TechStars, 500 Startups
–  Funding + Co-working + Mentoring -> Design, Data, Distribution
–  “Fast, Cheap Fail”, network effects, quantitative + iterative investments
Source:500startups!
Some context: Changes in Tech Startups

Metrics for pirates… 
AARRR!

ACQUISITION!
Users come to the site; you
have their attention

ACTIVATION!
User performs some key activity
that indicates a good ﬁrst visit

RETENTION!
User continues to do that key activity
indicating they like your product

REFERRAL!
User gets other users to join

AARRR Funnel: Customer Lifecycle / Conversion Behavior!

Emails
&

Alerts

Blogs,
Content

System
Events
&
Time-‐
based
Features

Biz
Dev

Ads,
Lead
Gen,

SubscripDons,
etc

Emails
&

widgets

Campaigns,

Contests

Homepage
/
Landing

Page

Product

Features

SEO
SEM

Apps
&

Widgets

Aﬃliates

Email

PR

Biz
Dev
Campaigns,

Contests

Direct,
Tel,

TV

Social

Networks

Blogs

Domains


BLOG EXAMPLE!
Acquisition - users come to the site and stay for at least 2 minutes  
Activation - user signs up for RSS/newsletter  
Retention - user reads at least one post a week or opens the newsletter  
Referral - user promotes your blogs contests and drives trafﬁc  
Revenue - user buys your ebook !

SAAS EXAMPLE!
Acquisition - user signs up for the service  
Activation - user successfully makes a document  
Retention - user continues to make documents. As long as they're !
successfully making documents they will continue to use the service.  
Referral – Users send other users to our web, possibly with a coupon code  
Revenue - yay! money! !
(Web-‐based
app
to
convert
HTML
to
PDF
or
Excel
documents)

Emails
&

Alerts

Blogs,
Content

System
Events
&
Time-‐
based
Features

Biz
Dev

Ads,
Lead
Gen,

SubscripDons,
etc

Emails
&

widgets

Campaigns,

Contests

Homepage
/
Landing

Page

Product

Features

SEO
SEM

Apps
&

Widgets

Aﬃliates

Email

PR

Biz
Dev
Campaigns,

Contests

Direct,
Tel,

TV

Social

Networks

Blogs

Domains

Example
Conversion
Metrics

(note:
your
mileage
may
vary…)

Category User Status Conv % Est. Value
Acquisition Visit Site
(or landing page, or external widget)
100% $.01
Acquisition Doesn't Abandon
(views 2+ pages, stays 10+ sec, 2+ clicks)
70% $.05
Activation Happy 1st Visit
(views X pages, stays Y sec, Z clicks)
30% $.25
Activation Email/Blog/RSS/Widget Signup
(anything that could lead to repeat visit)
5% $1
Activation Acct Signup
(includes profile data)
2% $3
Retention Email Open / RSS view -> Clickthru 3% $2
Retention Repeat Visitor
(3+ visits in first 30 days)
2% $5
Referral Refer 1+ users who visit site 2% $3
Referral Refer 1+ users who activate 1% $10
Revenue User generates minimum revenue 2% $5
Revenue User generates break-even revenue 1% $25

ACQUISITION!
Key Metrics To Track:!
• Volume(#) !
• Cost ($)!
• Conversion (%)!
!
Acquisition tips (for the top 10 - 100 words)!
• Your brand / Products!
• Customer needs / Beneﬁts!
• Competitor’s brand / Products (Steal trafﬁc)!
• Semantic equivalents!
• Misspellings !

ACQUISITION!
Extra tip: How to get your ﬁrst 100 users!
1)
What
exisDng
soluDon
do
you
believe
your
product
is
beTer
than?

2)
Where
can
you
ﬁnd
a
criDcal
mass
of
people
who
use
the
exisDng
soluDon?

3)
Go
there.
Talk
to
them.
Show
them
your
product.

ACQUISITION!
Extra tip: Reverse Engineered App Store’s ranking algorithm
(approximation)!
AppStore
Ranking
=
H +
D +
R + E +
S

!
!H = # of installs weighted for the past few hours!
!D = # of installs weighted for the past few days!
!R = Reviews (star rating + number of reviews)!
!E = Engagement (# of times app opened etc.) !
!S = Sales ($)!
!
!

ACTIVATION!
Key metrics to track:!
• Pages per visit (2-3+ page views)!
• Time on site (10-30+ seconds)!
• Conversions (1 key feature usage)!
• Clicks (3-5+ clicks)!
• Bounce rate (low)!
Activation Tips:!
• Less is more!
• Focus on UX / Usability!
• Provide incentives & call to actions!
• Perform A/B tests and iterate fast!

RETENTION!
• Source (email, RSS, afﬁliates…)!
• Volume (Low spam rating)!
• Conversions (20% open rate / CTR)!
• Visitor Loyalty (1–3+ visits per month)!
• Session Length!
• Long customer life cycle / Low decay!
• Identify fanatics and cheerleaders!

RETENTION!
Retention Tips:!
• Email is simple and it works!
• But make Unsubscribe easy!
• 80% subject line / 20% body text!
• Actually… 99% subject line / 1% body text!
• Status / “best of” weekly/monthly emails!
• “Something happened” emails!
• Lifecycle emails @ +3, +7, +30 days !
• RSS / News feeds!
• Widgets / Embeds!
• Gamiﬁcation!
• Fanatics = Virality + afﬁliate channels (like bloggers)!

REFERRAL!
Viral Growth Factor = X * Y * Z!
!
!X = % of users who invite other people!
!Y = average # of people that they invited!
!Z = % of users who accepted an invitation!
A viral growth factor > 1 means an exponential organic user acquisition.!

REFERRAL!
Referral Tips:!
• Personal send to friend (Email / IM)!
• Social Media!
• Widgets / Embeds!
• Afﬁliates!

REVENUE!
• Conversion to revenue (%)!
• Volume ($$$)!
Revenue Tips:!
• Don’t just rely on AdSense, iAd…!
• Offer something free (at least when starting out)!
• Subscription / Recurring transactions!
• Qualify your customers / Trafﬁc for lead generation.!
• Sell somethig (physical or virtual)!

CAC (Customer Acquisition Cost)!
Take
only
a
porDon
of
those
salaries
and
expenses

in
the
early
days
to
give
a
beTer
indicaDon
of
how

CAC
will
look
when
you
are
at
scale.

CLV or LTV (Customer Lifetime Value)!
if
the
Customer
Churn
rate
is
a
monthly
%
or
yearly
%,
then

the
Customer
LifeDme
will
be
for
the
same
Dme
period.

CLV or LTV (Customer Lifetime Value)!
In
most
SaaS
businesses,
the
gross
margin
%
is
high
(above

80%),
and
it’s
quite
common
to
use
the
simpler
version
of

the
formula
that
is
not
Gross
Margin
adjusted.

To
truly
get
an
accurate
picture
of
LTV,
you
should

take
into
consideraDon
Gross
Margin:

a
=
iniDal
ARPA
per
month
(
x
GM
%,
if
you
prefer)

m
=
monthly
growth
in
ARPA
per
account

c
=
Customer
Churn
Rate
(in
months)

CLV or LTV in a More Complex Scenario
(Where
you
expect
ARPA
to
change
over
the
lifespan

of
the
customer
due
to
expansion
revenue)

(This
formula
makes
an
assumpDon
that
revenue
increases
at
a
roughly

ﬁxed
rate
every
month
for
the
enDre
lifeDme
of
the
customer)

if
1
<
LTV/CAC
<
3

if
LTV/CAC
<
1

LTV : CAC Ratio Awesomeness!
> 3

if

(It’s
ok.
As
a
startup,
don’t
worry

iniDally
about
LTV>3*CAC)

your
business
model
is
broken!

Tools for metrics analysis
…

Less Budget, More Creativity, More Automation -> Maximize Output

Growth Hacking

Different landing pages according to trafﬁc source!
(Search Engines for SEO –> Footer vs Direct !
Trafﬁc -> No footer)!
Groupon ACQUISITION!
Caution! Use at your own risk! This is cloaking!!

Groupon ACTIVATION & RETENTION!
!

Groupon REFERRAL!
!Sharing is in Groupon’s DNA

Linkedin ACTIVATION!
!
Gamiﬁcation example:

Linkedin RETENTION & REFERRAL!
!

Linkedin ACQUISITION & REFERRAL!
!
This person passed away about a year ago. For the
majority of her life, she ran a small hardware shop and
she barely understood email, let alone LinkedIn.

From Linkedin’s PeopleYou May Know page…

(NOT THE BEST THING TO DO… people can hate you)

Dropbox ACQUISTION!
!
Signup driven homepage:
before
aier

Dropbox REFERRAL!
!
Sharing simplicity and availability on Multiple Devices & Platforms:

Dropbox REFERRAL & REVENUE!
!
Get more space

Dropbox ACQUISTION & REFERRAL!
!
Dropbox Great Space Race!

Dropbox REFERRAL & REVENUE!
!
Dropbox growth hack in numbers…
1. September 2008: 100,000 registered users!
2. January 2010 (15 months later): 4,000,000!
3. Mostly from word-of-mouth and viral:!
• 35% of daily signups from referral program!
• 20% from shared folders, other viral features!
• Sustained 15-20%+ month-over-month growth since launch!

It doesn’t need to be online (initially)!


-‐
1
Private
domain
(forwarded
to
affiliate
link)
-‐
made
a
very
easy
domain
name
-‐
$23

-‐
1,000
copies
(cut
into
4
=
4,000
flyers)
-‐
$40

-‐
2
custom
tshirts
-‐
$50

-‐
2
promo
girls
($20/hr
each
x
4
hrs
=
8
hours
total)
-‐
$160

-‐
2
accounts
on
the
hook
up
site
(trial)
-‐
$10

Total
AdverDsing
Cost
=
$283

Hand
out
all
4,000
flyers
+
do
some
heavy
flir=ng


-‐
1
Private
domain
(forwarded
to
affiliate
link)
-‐
made
a
very
easy
domain
name
-‐
$23

-‐
1,000
copies
(cut
into
4
=
4,000
flyers)
-‐
$40

-‐
2
custom
tshirts
-‐
$50

-‐
2
promo
girls
($20/hr
each
x
4
hrs
=
8
hours
total)
-‐
$160

-‐
2
accounts
on
the
hook
up
site
(trial)
-‐
$10

Total
AdverDsing
Cost
=
$283

Hand
out
all
4,000
flyers
+
do
some
heavy
flir=ng

Got
118
conversions
(2,95%
conversion
rate)
-‐>

118
x
$45
payout
=
$5,310
Revenue
-‐
$283
cost

=
$5,027
PROFIT!

ACQUISITION!
hack

Caution! Use at your own risk! This is cloaking!!
-‐>
-‐>

ACQUISITION!
1-‐
Setup
domain
with
a
WordPress
news
theme.

2-‐
Hire
writers
to
rewrite
news
arDcles
for
$2
each.

(Avoid
copying
to
ensure
“journalisDc
quality”.)

3-‐
Start
with
150
back-‐dated
arDcles
to
show
that

the
site
has
some
momentum.

4-‐
Setup
a
nice
logo
and
real
phone
number.

5-‐
Double
check
that
the
site
complies
with
the

Google
webmaster
guidelines.

6-‐
Submit
for
approval.

ACQUISITION & REFERRAL!
From
adverDsing
here…

PS: I Love You. Get Your
Free Email at Hotmail
To
simply
wriDng
this
footer
on
each
email…

And
here
are
the
results:

ACQUISITION & REFERRAL (Through viral content)!

ACQUISTION,
ACTIVATION,
RETENTION
&
REFERRAL!
ACQUISTION,
ACTIVATION
&
RETENTION!

Extra tip: Reverse Engineered App Store’s ranking algorithm
(approximation)!
AppStore
Ranking
=
H +
D +
R + E +
S

!
!H = # of installs weighted for the past few hours!
!D = # of installs weighted for the past few days!
!R = Reviews (star rating + number of reviews)!
!E = Engagement (# of times app opened etc.) !
!S = Sales ($)!
!
!
Luck?
AppStore
Bot?
Dark
paTern?

ACQUISITION, REFERRAL & REVENUE!

REVENUE & PROFIT!
Unlock
all
books
is
the
clear
top
revenue
generator.

REVENUE & PROFIT!
The
$144,146,165
BuOon

REVENUE & PROFIT! The
$144,146,165
BuOon

When
cabs
were
cash
only,
the
average
Dp
was
roughly
10%.
Aier
the

introducDon
of
this
system,
the
Dp
percentage
jumped
to
22%.
Those

three
buTons
resulted
in
$144,146,165
of
addi=onal
=ps
per
year.

When
Growth

Hacking
Goes

Fail
Hacking

Path
Facebook
blocked
Path’s
“Find
Friends”
access
following
spam
controversy

Path
Path
texts
your
enDre
phonebook

Rap Genius: No SEO Genius
Rap Genius fell from around 700,000 uniques a day to around 100,000.!

Rap Genius: No SEO Genius
Google recommends a 4-step approach to ﬁxing the problem:!
1. Download a list of links to your site from Webmaster Tools.!
2. Check this list for any links that violate our guidelines on linking.!
3. For any links that violate our guidelines, contact the webmaster !
of that site and ask that they either remove the links or prevent them!
from passing PageRank, such as by adding a rel="nofollow" attribute.!
4. Use the Disavow links tool in Webmaster Tools to disavow any links !
you were unable to get removed.!
But they had a MASSIVE problem… so they had to write a scraper to!
analyze 178k
URLs
using concurrency on a Heroku cloud. #NOTBAD!

Talleres
de
Lean
Startup

pvalls@technovabarcelona.org

@polvallssoler!
" "linkedin.com/in/polvallssoler!
" "slideshare.net/polvallssoler!
"!
Reddit for spanglish geeks: http://zumogeek.com/ !
iOS app for discovering people nearby: http://joinerapp.com/ !
Advising entrepreneurs at La Salle Technova Barcelona!
Thanks! Pol Valls Soler !

Currently creating:!
Co-creator of:!
Moneda Catalana (Catalan Cryptocurrency): http://moneda.cat/ !
Feel Real Estate Barcelona Property: http://feelrealestate.com/

Pirate Metrics & Growth Hacks Workshop at Barcelona TechDemoDay 2014

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