Andy Young // @andyy // andy@500.co
How do I Analytics?
a practical guide for
pragmatic startups
Andy Young // @andyy // andy@500.co
Hi, I’m Andy!
@andyy
Andy Young // @andyy // andy@500.co
Wait what, why?
Analytics?
Andy Young // @andyy // andy@500.co
What do we measure, and why?
Vanity metrics
Revenue metrics
Conversion rate metrics
Pirate metrics..
We need to know how we’re doing.
Andy Young // @andyy // andy@500.co
If you're not keeping score
there's no point playing the game -
you'll never know if you're
winning or not
- @distrodom
Andy Young // @andyy // andy@500.co
Today’s tools make it
super-easy to track
things
Google Analytics
Mixpanel
Localytics
KissMetrics
Branch Metrics..
Andy Young // @andyy // andy@500.co
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
Andy Young // @andyy // andy@500.co
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
Andy Young // @andyy // andy@500.co
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?
Andy Young // @andyy // andy@500.co
How are we doing?
Andy Young // @andyy // andy@500.co
How’re we doing?
1. Identify top-level KPI
Andy Young // @andyy // andy@500.co
Identify top-level KPI
it’s hard.
Andy Young // @andyy // andy@500.co
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 // andy@500.co
Identify top-level KPI
How?
Andy Young // @andyy // andy@500.co
Identify top-level KPI
Keep it simple!
The good news: there’s probably a
pre-determined answer
for
what drives your business
Andy Young // @andyy // andy@500.co
Identify top-level KPI
There’s probably a pre-determined
answer for what drives your business
Spoiler: ultimately it’s $$$
Andy Young // @andyy // andy@500.co
How’re we doing?
There’s probably a pre-determined
answer for what drives your business
Commerce: # sales
Subscription / SaaS: # subscribers
Marketplace: # transactions
Andy Young // @andyy // andy@500.co
How’re we doing?
1. Identify top-level KPI
Andy Young // @andyy // andy@500.co
How’re we doing?
1. Identify top-level KPI
2. Next, add nuance
Andy Young // @andyy // andy@500.co
How’re we doing?
Nuance behind your top level KPI
E.g. for commerce: # sales
Nuance: average sale $; # customers
Andy Young // @andyy // andy@500.co
How’re we doing?
1. Identify top-level KPI
2. Add nuance
3. Add drivers
Andy Young // @andyy // andy@500.co
How’re we doing?
Drivers behind your top level KPI
E.g. for marketplaces: # transactions
Drivers: # suppliers, # customers
Andy Young // @andyy // andy@500.co
How’re we doing?
1. Identify top-level KPI
2. Add nuance
3. Add drivers
4. Add funnel for these drivers
Andy Young // @andyy // andy@500.co
How’re we doing?
1. Identify top-level KPI
2. Add nuance
3. Add drivers
4. Add funnel for these drivers
End up with AARRR
Andy Young // @andyy // andy@500.co
How’re we doing?
1. Identify top-level KPI
2. Add nuance
3. Add drivers
4. Add funnel for these drivers
Put in a spreadsheet
(Template Google Sheet: http://bit.ly/kpi-sheet)
Andy Young // @andyy // andy@500.co
- How’re we doing? -
- bit
.ly/kp
i-she
et -
Andy Young // @andyy // andy@500.co
How’re we doing?
Put in a spreadsheet
- key KPI at the top, nuance and drivers below,
finally the detailed funnel below for reference
- columns for weekly numbers, w/w growth
Andy Young // @andyy // andy@500.co
How’re we doing?
Put in a spreadsheet
- review weekly
- share with whole team
- set targets
- use as a model to predict and prioritize
Andy Young // @andyy // andy@500.co
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
Andy Young // @andyy // andy@500.co
Other key metrics
CAC, LTV, churn
Andy Young // @andyy // andy@500.co
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
Andy Young // @andyy // andy@500.co
If your
LTV
is greater than your
CAC
then you’re in business
Andy Young // @andyy // andy@500.co
If your
LTV
is greater than 3x your
CAC
then you’re in a good business
Andy Young // @andyy // andy@500.co
CAC & LTV: nuances
Payback period: time to recoup CAC
Magnitude of your numbers
e.g. enterprise vs. social
Andy Young // @andyy // andy@500.co
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
Andy Young // @andyy // andy@500.co
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
Andy Young // @andyy // andy@500.co
Calculating LTV
Know your definitions!
MRR?! GMV?!
A16Z blog posts:
16 Startup Metrics & 16 MOAR Startup Metrics
Andy Young // @andyy // andy@500.co
Analysing your data
Andy Young // @andyy // andy@500.co
Andy Young // @andyy // andy@500.co
Andy Young // @andyy // andy@500.co
Andy Young // @andyy // andy@500.co
How not to do Metrics
Outdated information
Just 1 view of your data
Manual calculations
Bad metrics lead you astray
Andy Young // @andyy // andy@500.co
Growth Accounting
wha..?
Andy Young // @andyy // andy@500.co
Growth Accounting
Andy Young // @andyy // andy@500.co
Growth Accounting
Andy Young // @andyy // andy@500.co
Cohort analysis?
Andy Young // @andyy // andy@500.co
Andy Young // @andyy // andy@500.co
Andy Young // @andyy // andy@500.co
Analytics = Knowledge
Andy Young // @andyy // andy@500.co
Knowledge = power
confidence
sanity
Andy Young // @andyy // andy@500.co
Good luck!
Andy Young // @andyy // andy@500.co
● 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..