Viral analytics and metrics – go viral young startup

One of the things I am passionate about is analytics and metrics. I’m most interested in gathering a breadth and leveraging them to drive solid decision making. While at IBM I worked closely with a group of exceptionally talented researchers (marketing and technology) to develop a host of models used to drive broad reaching strategy decisions. One of those models was a cool Structural Equation Model used to show how customer experience led to increased revenues. It was this experience that gave me the appreciation for the importance of metrics and the greater importance of making meaning of the data for decision making. While at one of my recent startups I developed a framework for startup growth metrics (focused primarily on user metrics). I built this model in response to what I saw casual attitude to making products grow viral (hence the name of this blog post).

It is a simple, but useful, framework for startups to leverage (framework subject to change). Here is an overview:

  • ACQUISITION – think in terms of all the inbound activities you have. PPC, SEO, Blogging, etc. Obviously you need to look closely at the effectiveness of you campaigns (ROI, etc). Simple conversion modeling, A/B testing, analytics, etc. But what I think is more important is to tag the source of the new users based on acquisition source and then evaluate which consumer pools are the best for your company to fish. While some sources may bring in a lot of registered users, not all registered users are of equal value, particularly in the early stages. You want the one that are A) active and B) drive WOM. This is particularly important given you are likely trying to justify some healthy marketing budget to investors once you’ve realized the ‘Field of Dreams’ strategy rarely work.
  • REGISTRATION – for many web properties this is pretty standardized. That can differ if you are company bridging mobile and web. Be careful how much personal information you ask for. I say the least amount is best (email address). I also thing verification is critical to build trust as is other trustmarks (Truste, Thawte, etc). Look closely at your drop off at the various stages of the registration and hypothesize what is driving the drops. Change your process and monitor the metrics. If your lucky, this will be the least challenging and could easily be wrapped up into Acquisition metrics. Another important thing to do is the monitor how many contacts people import at registration (the address book is a critical success factor to social products). The forms the top end of your WOM goals and provides a baseline for monitoring user engagement.
  • USAGE – these metrics create the base of the firms value. Successful communities are built on engaged user bases – investors like this, advertisers like this and fellow community participants like this. I recommend you take it beyond the basics (daily, monthly visits, time on site etc) and identify those that are unique to your category and/or site. The other area I like to look at is network activity – how much are your community members interacting. I recently saw a few VCs speak about the nodes and the activity between them. I think this is where the insights to what drives your community exists. The more active within the network, the higher the probability that you have a shot at ‘viral’ growth.
  • WOM/CONTACTS – this is about monitoring Word of Mouth – the potential referals, the invitations sent and the associate conversion rates. This is where you get at the viral growth factors. This is where you can reverse segment to see what types of users/community members and which acqusition pools drive the most referals. I can remember how excited I was the first time we identified our second generation referal when we implemented this model.
  • Revenue/Profit – this is in fact why you are building a business right?

You must go deep within each category and you must prioritize based on the state of development. But at the end of the day, you need to build a model that allows you to do solid driver analysis (what is driving my business – positive and negative). All of this helps you understand the on ramp to your social graph (which I was calling the ‘spider webs’ before the social graph took hold) and monitor the growth of your graph. It can form the basis for targeted CPM pricing strategies. It can help you allocate your paid marketing budget. This is just a high level overview of the categories to monitor and some initial thoughts on what insights they provide. I’ll be posting more on this topics in the coming months

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Comments
3 Responses to “Viral analytics and metrics – go viral young startup”
  1. Dave McClure says:

    >>While at one of my recent startups I developed a framework for startup growth metrics

    interesting framework you’ve developed.

    i like the way you’ve broken it down into 5 steps: acquisition, registration, usage, contacts, revenue.

    might be easier to remember if you came up with some kind of acronym.

    best of luck with it.

    • gammill says:

      Thanks Dave. I appreciate your feedback! I’ll have to work on an acronym – I like yours – EERRR. I’m working on extending the framework a bit. I’d love to discuss it more with you. Hope all is well with all your exciting ventures!

  2. Richard says:

    You should checkout http://mixpanel.com, they do some pretty interesting stuff in terms of what you’re talking about and how to measure stuff.

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