Author Archives: David Arnoux

About David Arnoux

I'm David Arnoux, co-founder of Twoodo. I write about growth hacking, startups and lean methodology. Come say hi on Twitter or on Google+

The beginner’s guide to creating conversion funnels and analyzing data

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Confused with analyzing data? Conversion funnels are here to help.

You’ve probably been reading tons of articles telling you to start setting up metrics for your website, measure your website KPIs and take data-driven decisions. If you’ve already begun setting up metrics and tracking events on your website you probably know that it’s not easy. At Twoodo we spent quite a bit of time getting it right! In this article we’ll try to explain what you should be measuring, how to measure it and what types of tools you can use to measure them. This is in no way a definitive guide but more a journey of what we did.

First let me try to convince you a bit. At Twoodo we’re huge evangelists and practitioners of lean methodology principles: Build > Measure > Learn > Build > Measure > Learn. So inevitably someone in the company had to be in charge of the “Measure” part. It might not be sexy but we’ll call him our data analyst. As we’ve seen, using jargon such as “events-based tracking” can send a newbie to analyzing data running for the hills. But it is worth spending time understanding how to set up and use your user data properly. Identifying where there are drops in your conversion funnel is crucial to the success of early-stage startups, and makes a significant difference to established companies. Like the example here. We can clearly see something is going wrong..now we can start hypothesizing about why it’s happening and how we can fix it.

Source: Mixpanel blog

The first step before starting to track everything and anything is to determine what metrics are important for your organization.

It’s not rocket science, as Mixpanel (the tool we use) assures you. Almost anybody can become a competent data analyst. What you are dealing with are 2 groups of data:

Demographics: raw data about the user (name, location, age etc.)
Events: the things they do on your website (click a link, sign up, leave a comment etc.).

So simply put you have users and events. In this article we’re interested in events but we go into detail on how to leverage soft data in this article.

“Events” includes the entire history of a user on your website. What pages he visited, where he clicked, how many invites he has sent, has he posted a comment etc. Google Analytics can help to some extent with events but in my opinion it’s quite limited. It is a great tool to understand where your visitors are coming from and can also be used to measure the very top of your conversion funnel. How many visitors arrived on my landing page and then signed up, posted something, stuck around or any other crucial action that you consider a “conversion”. Unfortunately GA is not great for going deeper into your conversion funnel and isn’t great for event based tracking (or I just haven’t learned to use it well enough) - a.k.a.: knowing what each user actually did on your website.

Without event-based tracking there is a lot of ambiguity that leads to guesswork. Guesswork as to what is actually happening inside your product. Are people using the right features, are they following the right steps to see the added value of your website, do they come back, do they come back regularly, do they invite people over, where do they drop off, what should I be improving etc..?

All in all I would recommend using GA for your user acquisition (and a solid UTM tracker framework) efforts but to use an event based tool such as Mixpanel or KissMetrics to track user behaviour and ultimately improve your product.

So what am I supposed to be tracking??

There are reasons that people bang their heads off of walls when it comes to using funnels. The first reason is: what am I supposed to be tracking?? We’ve found that using these questions can help solve this issue:

Step 1. What’s the main goal of your website? What is your business objective?

Let’s look at 3 different examples (just to make my life a bit harder

For an e-commerce shoe store the business objective is to sell shoes.
For a community website like Airbnb it’s getting people to book what they call “spaces”.
For a team collaboration tool like ours it’s to get people to login daily and communicate.

Step 2. What is needed for these objectives to be met? What are the Key Performance Indicators (KPIs) that prove your business objective is being met. There shouldn’t be hundreds. You should probably limit this to one or two. Let’s try to keep it simple in the examples:

For the e-commerce shoe shop it would be number of shoes sold.
For Airbnb there are 2 major KPIs. Number of spaces put up for rent by hosts and number of places booked by guests.
For Twoodo it’s number of teams created and number of daily active users.

Step 3. What conversion funnel leads to these steps:

This is where it gets a bit trickier. Depending on your website there can be many different event paths that can lead from Event 1 “Visited your landing page” to the Final Event (“clicked purchase”, “clicked book” or “created a team”) that we mentioned as a KPI. The trick here is to find paths (and remember we’re looking at events here like: clicked a button, visited a certain page) that ALL your visitors will have in common from landing page to conversion. Sometimes this means leaving out things like searches, certain pages or certain paths from your funnel because it’s possible for users to get from Event 1 to Final KPI Event without doing certain actions.

Here’s what I mean using the Airbnb example of someone renting an apartment:

Path 1: Visited landing page > searched for a city > refined search by price > clicked on a place to rent > chose dates > clicked “book” > clicked on “make payment”
Path 2: Visited landing page > chose dates > clicked on a place to rent > clicked on a “similar place to rent” > clicked “book” > clicked on “make payment”

In this example only the events marked in green are common between the 2 paths. The other events should therefore not be tracked here. Now I know this isn’t the perfect example but it’s to help you get going.

So let’s go back to our 3 examples. These are the funnels that could be created for the examples we mentioned earlier:

Shoe shop conversion funnel : Visited a page > Clicked on a product page > Added to cart > Clicked on “checkout > Clicked on “make payment”
Airbnb host conversion funnel : Visited a page > Clicked on “list my space” > clicked “continue” > clicked “validate”
Airbnb guest conversion funnel: Visited a page > clicked on a place to rent > clicked book > clicked on “make payment”
Twoodo conversion funnel 1: Visited landing page > signed up > created a team
Twoodo conversion funnel 2: Visited landing page > signed up > logged in every day over the past week

These are only real basic examples. There are many other events you should also probably be tracking. We go into much further details on what metrics you could/should be tracking in this introductory guide to SaaS startup metrics.

Now that we know WHAT to track getting the right data can also lead to mistakes. What do I mean? Let me walk you through a scenario. Once a user is logged in it is easy to track him. However, tracking those on your website who have not logged in is a little trickier. Cookies are one way of doing it, but that won’t work if the same user comes to the website from different locations. Also, a registered user may be on your website but just not logged in. How is this user counted?

This is why we pay the our CTO so much to manage our information flows

How do we count the information that we want?

You don’t want to check the same event multiple times. You want to know how many people did an event. It’s not just the quantity of the event (eg. people posted 498 times today) … but you need to know who did how many posts (eg. JohnX posted 8 times today, and JanetX posted 53 times today).

The events are related from one step to another by being linked with the same user ID - that’s how you get your % of users who are doing one step or another. Separate the quantity of users from the number of actions occurring. Don’t worry! Doing this does not require coding experience but the person setting it up has to be tech savvy (or at least not afraid to give it a go!). In Mixpanel, simply choose from the drop-down menus the information you want in the timeframe you need it:

This is a logical sequence: 1) people who viewed the homepage to 2) people who viewed the sign-up page to 3) the people who became users. However, these are very general steps and you should narrow down your funnel to be specific to your product (eg. “people who signed up” to “people who clicked on the ebook” to “people who bought the ebook”). Each set of events is unique to your business.

In order for this data to be actionable, it needs to be drilled down further. Why did only 10% view the sign-up page? Are the wrong people being driven to the homepage? Is there a weak CTA? And after that, why do only 1% commit? Are we asking too much from them? Is the sign-up form causing friction? Start at the beginning of the funnel and work your way over. Focus on the highest drop-off rates. Start to generate hypotheses as to why they would drop off at that particular point and find information to support it. And use Inspectlet to figure out WHY these drops are occurring. Inspeclet rocks.

The big scary setup

Most metrics tools make getting started as easy as possible (after all, their data told them that onboarding was too difficult!). The best ones have great support available whether by email, IM or calling. Most tools are as difficult as adding 2 lines of code to your website - almost half the battle is won! If you are using WordPress for example, install a plugin called “Header and Footer” and paste those 2 lines of code into the footer - done!

Now you need to make sure to track the important events. Let’s use Twoodo as an example again. When you arrive on Twoodo you have to carry out a certain number of “onboarding steps” It’s important for us to know how many users are carrying out the entire onboarding. How many are stopping at step 1, step 2 etc. The funnel looks like this:

As you can see steps 3 and 4 are posing a problem to users. I’ve identified where there’s a drop in my funnel and I can start thinking about how to fix it.

It’s just like algebra 101: you have a variable x and you define what the value y is.

If you think funnels are not that important… think again

A small leak in your funnel can compound over time to lose you a huge amount of revenue (if you reach the revenue positive stage at all!).

Take a look at the calculation below from Don’t Leak Leads - these are the average numbers for 1,000 visitors.

Using data funnels, you can figure out why only 50 out of 1000 people are dropping off. This way you can reduce your CAC significantly. Perhaps you are targeting the wrong people to visit your website - check the demographics. Perhaps your call to action is unclear or below the fold - move it (and do an AB test) and change it (and again, AB test).

Metrics only tell the data analyst half of the story. They tell you WHAT is happening on your website. Next part is to understand WHY these things are happening. A lot can be said about that, usability testing, talking to your customers, exit surveys can all help understand the WHY and create hypothesis as to how to fix it. But that’s for another article…

The 18 greatest tips for conducting effective meetings

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This post is about the best tips we could find on conducting effective meetings. Meetings remain one of the biggest time-wasters in companies today, compounding to huge annual losses of productivity year after year. Give time back to the team to get things done by implementing these tips.

1. The meeting is defined - scrum? Sales? Weekly catch-up?

What is the point of the meeting? What is the style? What am I expected to bring to the table (literally and figuratively)? How relevant is the meeting to me? After-works drinks and a sprint-planning meeting are two very different kinds of meetings. In advance, each person needs to know what is going on format-wise for most productivity to occur.

2. The person conducting the meeting pre-circulates what will be discussed, so if additions need to be made they can be done on time and not on the fly in the middle of the meeting

Preventing the meeting from going off topic is critical. It is all too easy for the point of the meeting to be lost, and for discussions or arguments to carry over onto unrelated issues. The designated person for organizing the meeting should appoint a time up to when new ideas should be submitted, and then distribute the agenda in good time for everyone to come prepared. This is the agenda that should be followed without exception.

3. A meeting is not a brainstorming session

Unless specified, a brainstorming session is not a productive use of a meeting. It is a vague activity that requires flexible amounts of time to get acceptable results. If something needs to be brainstormed, a brainstorming session can be set up afterwards with the right people.

4. Get really strict - the minutes-taker has an ‘off the topic buzzer’

If you have a lively team or group in a meeting, it can sometimes be more efficient to use a loud buzzer to warn people that they are going off topic rather than try to talk them down. The sounding of the buzzer signals that the person must stop talking immediately. This is not for every style of company, but for a passionate team it may be the faster way of reminding people that they are off-topic without having to waste time getting back to the original question at hand.

5. Meet immediately about small steps that otherwise slow down everything

Something like the 2-min GTD rule of replying to an email, not every decision needs to be made in a meeting. The expertise of your staff is not increased by only allowing them to make decisions under supervision. Allow them to make decisions with the understanding that they are responsible for the outcome. If they are unwilling to go this path, then figure out why. Is the company culture too condemning of mistakes? Is it difficult to prove accountability? Do the staff not want the responsibility for some other reason? In any case, find ways to have quick decisions removed from meeting times. This will also remove the need to take up much of more senior staff’s work time as they will not have to vet all the smaller ideas and questions from the team.

6. Present in data, and limit slides

Slides are often a waste of time to make as well as a waste of time to present. They fill space rather than inform. Do not use slides for anything except data that is essential to the point you must present. Limited writing. Limited pretty pictures. Just data, wireframes, hard facts and verbally explain the rest. All your decisions and input at the meeting must also be based on verifiable data, rather than speculation or “I just know it”. Otherwise, decision-making is hampered. If you really know you have a good solution, you will be able to succinctly explain why it is so.

7. It ends and finishes on the prescribed time (or earlier)

Starting time should be strictly enforced. There is rarely a good reason for people not to turn up at 09:00 rather than 09:05. 5 minutes may sound small, but if you have 6 meetings across the span of the day, this will compound into 30 minutes of wasted time. Develop a reputation for a no-tolerance to turning up late to meetings. I used to have a professor who locked the auditorium door precisely on the hour. Attendance for that lecture was always pretty good! Sure, there can be genuine reasons for being late and those are always to be accepted. But 9 times out of 10, everyone is able to be there with no excuse except tardiness.

8. If you don’t need to be there, don’t be there

That’s why you have the agenda in advance. Don’t go if you have nothing to contribute, and just check the minutes of the meeting later to catch up on what happened.

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9. If you need to be there, be there

Equally, do not skip meetings where your presence is needed in order to answer questions or provide data. Managers need to go to the social events in order to maintain relationships with the team, boost morale, and allow more casual access.

10. Research: before you turn up with questions, check out if you can find these answers out by yourself - this saves time for everyone

Meetings are better when the questions asked are questions that can only be answered by that particular mix of attendees, rather than things that can easily be found elsewhere or by two individuals conversing. Perhaps this meeting is the only time you see a particular colleague - use that opportunity. Is it the only time sales and product teams are in the same room? There are many questions that need to be asked in this moment than can be answered over long email threads.

11. Everyone leaves knowing what they need to do next

If they don’t, it was a pointless meeting. If they weren’t expecting a to-do list, they shouldn’t have been there.

12. Make sure there are recreational meetings, not just work meetings

If group get-togethers are solely for hard-paced get-it-done meetings, then a poor morale will build up in the company. There need to be more relaxed settings for teams to hang out. They also need to be organized, and invites or notifications sent out. A ‘casual corner’ in an office is all well and good, but a full team invite to chill is also important to make sure the more introverted or super-busy are included in the bonding.

13. No devices if you can’t resist opening tabs

No phones, no iPads, no ereaders, no laptops open UNLESS you are a disciplined note-taker. In this age of ADHD this might sound impossible. But the reason you’re meeting in person is because it is necessary. Checking email or Twitter while someone is sharing their ideas or results means you are not engaging, and also being disrespectful. A 15 - 30min meeting should not spell disaster for 99% of your interactions that day (bar instant customer support or crisis negotiations). If you cannot resist changing between tabs whilst taking notes, switch to pen and paper and type up the tasks after the meeting.

14. Do not make it seem like less meetings equals you are less important

Are there some people in the company who would take it personally not to be invited to a meeting, despite not having anything much to contribute it? There are some who feel that they should ‘be’ there anyways. Make an all-round company objective to start holding meetings for the people who have an active input to give, and that everyone else will be kept informed by way of email or a collaboration tool. This approach to reducing meetings to ‘essential people only’ needs to be consistent and explained as a practicality and not a hierarchy issue.

15. Use a tool to measure accountability

Depending on the tasks that need to be done, you need to find suitable ways of measuring if things are getting done. How many leads per month should a salesperson close? How many pieces of content should a marketer produce? How many bug fixes should the tech team be able to get done? How long would it take the biz dev guy to get that partnership deal done? If you have an idea of the average acceptable output then use it as a benchmark. Don’t let this mean you get sucked into micromanaging. Make it about results. If a team member is able to accomplish the task with 20 emails rather than 100, awesome!

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16. Answer questions rather than sit quietly

Everyone can do their part to make meetings go faster. No matter how sophisticated computers are, the best computer is the human brain. If you have an answer or piece of information that your colleagues could find useful in a meeting, give it to them. Don’t be shy! The faster people get the right info, the faster they can move on with the job at hand.

17. Allow a really productive meeting to go overtime

Sometimes, magic happens and meetings suddenly turn in an unprecedented but awesome fashion! Yes, timing is important - BUT if great ideas suddenly start rolling out, and really creative solutions start bouncing around savour the moment to harvest these ideas. Sometimes it’s just a serendipitous series of events, or just the right combination of factors. You’ll know when it happens.

18. Don’t force the casual meetings

Encourage, but don’t force. A classic sign of someone not wanting to be there is how often they check what time it is. Everybody has different personal commitments. Everybody has different preferences for social activities. Despite your best efforts, it’s possible that not everyone on the team gets along. This one came to mind from an experience I had when a guest at a medium-sized company party once. We were all having breakfast at a hotel (about 300 people as far as I recall) and I wanted to go back to bed for a while. The marketing or event team (I don’t know which) actually stopped me from going because they insisted I had to be in the room when the CEO walked by! I was baffled, mostly because I explained I was not an employee. And yes - they made me march back to my chair and suffer my headache for an extra hour.

Not cool.

Conducting effective meetings just takes a series of small changes

Instituting change is always tough. But think about it in terms of small steps. Managers need to take the lead on the new meetings format, and maintain the message that it is not an exercise in excluding people but of practicality. Employees should be encouraged to question their presence at meetings where they feel they have little real value to add or take away that couldn’t be conveyed in an email or report.

TIme is the most valuable thing we all have.

Customer segmentation and personalization: combining 2 powerful techniques

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Segment for growth

Customer segmentation means categorizing your visitors/users in a way that achieves a business goal. Even your early adopters. There are tons of benefits to correctly segmenting: avoiding useless channels, identifying the most profitable channels, improving your customer service, discovering unexplored niches and more. It all boils down to using your resources wisely to achieve maximum profitability. The facet I will discuss here are the benefits of personalization.

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Before we get into this deeply, I’d like to bring up a fascinating story of how Target (USA) ironically over-targeted their customers. The famous anecdote is about how Target figured out a teenage girl was pregnant before her parents did. How? They were able to spot patterns in what women were buying in each of their trimesters - lotion, mineral supplements, blankets - in order to supertarget them with coupons for items they expected them to buy at stages in the pregnancy. And pregnant women are a lucrative market!

Via her customer ID number, they tracked what she bought and sent her coupons in the mail for what they anticipated would be her next baby purchase in the trimester. The father found the coupons and was enraged at Target - were they trying to incentivize teenage pregnancy? Of course, when he found out the truth of the matter, he apologized. But the story became infamous - and Target learned that becoming so specific was creeping their customers out. So now, whilst they still send coupons based on this data, they also add in randomized ads for other things in order to make people less mindful of how their every purchase is being tracked somewhere. See more on the story here.

One size doesn’t fit all

Despite this story, most of the time being able to segment leads for better personalization works. Personalization has been proven to time and again be effective in converting people. And personalization is more than just addressing the email with the first name of the recipient. It involves the right timing, a compelling CTA (not all your segments will respond to the same CTA), and using specific language. Check these stats from Adobe/Econsultancy:

Unsurprisingly, there is slow change in big business: “Of course, technology trends mirror business demands. If business stakeholders had really understood the value of personalization in digital then all those brilliant folks writing software would have supported the need. Despite the many obvious examples among the leaders in the digital space, most enterprises have been disappointingly slow in learning the real lessons. They tend to think that those business models just don’t apply to them. That’s not without foundation – you can’t just assume that because an online retailer with millions of products makes great use of market-basket like analytics that it’s what you need too. It’s the deeper lesson – that driving personalized experience’s differentiates – that often goes under-appreciated.”

However, whilst these dinosaurs still walk around, you can take advantage of it! As long as your attitude is not trying to please them all, you’ll have something of value to offer a niche.

Personalization works for customer segmentation

The shift to the ‘personalized web’ is therefore sadly not being driven by goodwill but because business are reacting to the market. But segmenting merely by location and life-stage are not always going to be enough to appeal to our dynamic and shifting personalities. This is why algorithms that can track and predict our tastes and habits in the future will become so lucrative.

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In the meantime, we must segment our visitors and customers into meaningful groups with sensible KPIs that can realistically help us reach our goals.

SoAdaptive lists the reasons why personalization works:

convergence: social logins that show how many of your friends are already using the service/product encourage you to be part of the tribe.
relevance and immediacy of information: it resonates with the new user that you are already ‘intuitively’ serving their desires.
trust: personalization through displaying common friends on board, sending targeted information and including steps such as a ‘welcome’ and ‘thanks’ page increase trust in the brand .
similarity: we are comfortable with what we know, and therefore less likely to unsubscribe.
reciprocation: a deep psychological trait in humans - do something for your users and it is likely they will do something for you in return.
emotion: the right stimulus will provoke an emotional response, and lead to increased engagement.
social proof: we are strongly influenced by our friends, peers and family - we are more likely to use or buy a product if those around us insist on also using it.

Of course, these points of personalization come after you have figured out your segments. Here is a list of typical segmentation, taken from Megan Neely and Jeffrey Vocell on Quora:

Previous engagement with your website
Time/Day/Data
Recency & Frequency of Visits
Referring Source (campaign vs. earned media)
Mobile Browser Type
Keyword
External Data - think CRM or click-through data stored in email or marketing automation platforms
Behavior
Mobile device properties (i.e. touchscreen or non-touchscreen)
Mobile device type (iPhone / Android / Blackberry, etc)
Table type & browser
Geo-location (State / Region, City, Zip Code, Media Market)
Language

These segments are important, but give a generalized rather than personalized view of the users. From these data points, you can

a) test CTAs/landing page design
b) identify drop-off points
c) optimize for mobile devices
d) decide if you need to build specific apps for devices
e) find out what language base is largest amongst your users
f) see which growth tactics have driven numbers and which have not
g) most effective times to show in-app messages, offers, coupons etc.

This is certainly useful. But take a look at how Localytics takes it a step further. This video from Localytics gives an excellent breakdown of how users can be segmented in a way that makes sense for each unique mobile app. They segment their customers into unique categories: “couponers”, “second screeners”, “news junkies” and “social butterflies.” These groupings make sense to the business goals of the company which is why they are so powerful.

Where regular segmentation and personalization converge

We are not zombies. You cannot tell everything about what stimulates me to become more engaged with your product if you don’t know what gets me up in the morning. As Simon Sinek’s now famous TED speech proclaims “it’s not what you do, it’s why you do it.” This phrase drives us at Twoodo every day to try to learn more about why our users really want us. People become loyal to a company not because of just the product but what that company stands for. These are called ‘psychographic characteristics. Where segmentation and personalization will become most powerful for your product or service is where you can merge these successfully.

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Some psychographic characteristics (Community Tool Box):

Political views, including both party affiliation and the radical-liberal-centrist -conservative-rightist spectrum.
Values and moral system.
Social attitudes
Actual religious beliefs (not just ‘born into it’)
Environmental awareness and attitudes
Health consciousness
Attitudes toward authority, from blind acceptance to outright hostility

How can you figure this out?

Find out where your users are on the internet - forums, Google Plus communities, Twitter lists, Facebook groups, Meetups. What is their industry/role? In what way does their local culture affect them? For example, we have in-app messages in our product to check in and see how people are doing. For our American customers, it worked splendidly. They loved being reached out to. However, in The Netherlands, people found it impinged on their privacy and annoyed them. Why? The USA is strongly influenced by customer service and the business taking care of them. And the Dutch are an autonomous people who reach out when they need to, when they want to.

This is also a great opportunity to find out the language your users speak. It is essential to learn this language so that your service can be developed to present itself in the most enticing way possible to your niche. The Obama 2012 campaign applied this form of personalization in an innovative way. They used not only people’s names in emails, but created a dashboard for them to log in to the campaign, view what was going on, participate in discussion, offer ideas and so on. This was because their user base was used to participating using social collaboration and respected transparency and direct involvement.

The big ‘BUT’:

As you are making all of these wonderful discoveries about your users, keep in mind what your company goals are. Over-segmenting can be counter-productive. If these personalized segments are ultimately unprofitable or unviable, then you will have to let them go (or find another way to monetize them). Through your researching and learning process of customer segmentation and personalization, focus on what works for your company. Then you can direct your marketing and sales to a focussed area and kick ass!

The Definition of Teamwork: biology, psychology and getting things done

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This article will explore:

the definition of teamwork
the psychology behind teamwork based on human evolution
the different types of teams that exist in businesses, and how each functions

1) Teamwork is how it’s done

Naturally, you’ll know that nobody exists in a vacuum of solitude. The objects around you, the food in your mouth, the music from the radio… it’s all a product of human cooperation and collaboration. Very few people possess all the physical resources, bodily strength and various skills to survive alone. This is one reason why we have worked in roles for thousands of years: doctors, builders, teachers, writers, farmers, warriors, … and now developers, engineers, designers etc. Not everybody can develop expertise in everything due to time constraints, talent limitations and personal interests in a topic.

This can be seen in modern families: we are complementary because we need to be. People settle into roles that balance out what the family needs as a whole (or at least, that’s what is supposed to happen!). One person cooks, one person cleans…

And then there’s work, and the anxious managers putting “must be a team player” in job descriptions. It seems unnecessary, right? After all, we are by default all acting in teams day in, day out. Humans have always been cooperative by necessity, and also culturally. So why is teamwork such a challenge for managers? Let’s take a look at where it all started.

2) Human evolution and teamwork: it’s in our bones

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Humans are not the only species to work together, but they are amongst the best. Human society relied on teamwork to survive. This came in the form of coordinated hunting, for one. Teamwork played a number of roles in early human cultures that still stand true today. Did you ever wonder why you mostly treat inquiries from strangers with politeness and goodwill? We are instinctually inclined to be nice to strangers because there is a possibility that the encounter could become a mutually beneficial relationship.

This lingering automatic goodwill is important for modern teamwork, where we are often mixed with people we don’t know.

The second interesting insight from times gone by are our deeply embedded rules for reciprocity: we reciprocate for status, for resources and for pleasure. In many cultures today, gift-giving and receiving rules are important to respect and understand lest a grievance be caused. Why is this important to teamwork?

We have a need to give back to someone who has given to us. This drives teamwork to be a pendulum of giving and receiving. Our need for status means that team leaders are unconsciously encouraged to go the extra mile for their colleagues. The desire for the “feel-good” factor will push others to participate in the team. Scientists argue whether it is for survival in a time of need; or, if it is to do with moral and ethical values that our part of our nature.

Our tendencies to reciprocate it make people ready for teamwork and ready to take on their roles in a positive manner.

However, there is evidence as well that our evolution has made us unfit for teamwork past a certain scale. The majority of human existence was carried out in a hunter-gatherer reality. This meant small nomadic groups highly reliant on each other, but in competition for resources to survive with other groups, or tribes. Loyalty to your closely-knit tribe and a sense of duty to win the most resources for them caused (and still causes) clashes between diverse groups and culturally differentiated people today.

In teamwork, this is why culture and diversity are so often talked about - we are deeply inclined to be suspicious of others dissimilar to ourselves, because in the past it often was a question of life or death. We are still the club-wielding apes of times gone by walking amongst skyscrapers! But we recognize the innovative value of differentiating life experiences and worldviews.

Larger and more diverse teams are more difficult to manage because we tend to form sub-groups within teams. This is due to our past protective mechanisms for survival based on trust and familiarity. But they are more valuable than undiversified teams.

3) Types of business teams

There are no specific numbers on the size of work teams, but there are multiple types of teams. The category of the team can help to understand each specific set of issues facing that team. They are as follows:

i) Task Force

ii) Cross-Functional

iii) Self-Managing

Because of modern technological developments and shifts in attitude, each of these teams also has the potential to be virtual or remote. “Virtual” cannot be a category in itself because it applies to all types of teams.

Task Force

Of this list, the “task force” is the most short-lived - a temporary group brought together to solve a specific problem or complete a temporary project. At the end, they disband and are unlikely to work together again. “Task force” is also sometimes used to refer to people who are grouped together to perform the same repetitive task (such as employees at call centres).

Famous task force: The Avengers

Cross-Functional

The cross-functional team is composed of workers from different departments, of different skills and/or from different levels of the hierarchy. This type of team can be disjointed. Working as a team can become fragmented due to hierarchical differences and narrow knowledge specialities (eg. accountant + designer + head of product). But it can also work wonderfully when people compliment each others’ skills gaps and learn how to work in situations where power is not equally distributed.

Famous cross-functional team: The Fellowship of the Ring

Self-Managing

The self-managing team acts with a lot of autonomy within the larger structure of the business organization. They can make many of the day-to-day decisions and perform multiple roles from production to customer service. Self-managing teams are close, supportive and democratic because it is required when a group is responsible for an entire ecosystem. There is normally a team leader but a generally flat hierarchy where everyone is accessible.

Famous self-managed/virtual team: WordPress/Automattic

4) Today’s definition of teamwork

“Teamwork” is often coldly stated in dictionaries as being the activity of a number of individuals coordinated to achieve a goal. Teamwork is much more nuanced than that. We all know that teamwork is not that simple. It’s a complex network of different individuals from different cultures, with different habits and views of how things should be done.

With the entrepreneurship craze over the past two decades, smaller and more agile teams have become what companies are striving for. Steve Jobs famously said that “Apple is run like a start-up.” Things simply move faster today, in every aspect. “Long-term strategy” and “business planning” is becoming more and more meaningless. Product cycles are shorter. Marketing is in real-time. Customer support has to happen immediately. If this means a trend towards the self-managed and virtual team, then this is a good thing. Our inescapable evolution tells us that small groups of people relying on each other for the entire spectrum of needs is what we are ideally programmed to function as.

The definition of teamwork will always be basically defined as a group of individuals working together to achieve an objective. But that detached definition of teamwork does not add the nuances of human behaviour in teams, which we often forget is defined by our long ancestry of surviving as small groups in an often inhospitable environment. That’s not to say that business teams have to put up with inhospitable environments now but our instincts are still built that way.

Image credit

The best tips for working successfully within a team come from Forbes:

communicate directly to your colleagues rather than through management,
communicate openly with them,
and try to go the extra mile to help them out with a problem.

The insider’s guide to crafting an online author bio with SEO in mind

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This article shows you:

how to construct the best online author bio for social profiles and guest posting
examples of good and bad author bios

“A short professional bio has become increasingly important. Most of us suffer from information fatigue and cannot be bothered to read lengthy documents about anybody. Experts such as Matthew Levy reckon your bio is the most important document you will ever write.” - Jorgen Sundberg

The author bio - an innocent-looking piece of text on your social profiles, articles and website. Of course, we are going to tell you that it’s much more important than you think.

In approximately three sentences, visitors to your respective corner on the interwebs will decide if they like the sound of you or not. The information conveyed in the author bio can make or break a decision to a) subscribe to your newsletter, b) to comment on your posts, c) to share your product, or d) whatever it is you are currently peddling.

Takeaways from studying other people’s author bios

The basis of [future] SEO updates will be about finding the most trustworthy sources of information on the internet based on social sentiment. The number of times an article or person is linked to is what will increase rankings in Google. The author bio is part and parcel of your internet presence and can be used to increase your authority and also direct people to where you want them to go.

Here is what can be learnt by spending an hour reading bios from top blogs and websites:

the quality of your bio will get people to trust you
include your most impressive credentials (e.g. on most of the internet, getting a BA is not impressive - MA or PhD is fine)
keep it short unless you have a lot of cool credentials
what you say should relate to the website the bio is appearing - you need to make sense to the audience as to why you are there
write in the third/first person - a personal choice between professional objectivity and personalised outreach (generally, third person is more popular)
30 words/3 sentences is a decent limit
if you are unknown, have social media links/website link
the links need to direct people to what you want them to see about you

Designing the perfect author bio

Step 1

What do you want people to do when they read it?

a) go to a website?

b) share this piece of content?

c) follow you?

d) contact you?

e) sign up for a service?

Decide what the call to action for your bio will be.

Step 2

Will your audience prefer first or third person?

The benefits of writing in third person are that it a) sounds like someone else wrote it, b) gives people your name directly “John Doe is…” as opposed to “Hi my name is John Doe and I…”, c) gives an aura of professional distance. Generally, sticking to the third person is more foolproof.

Writing in the first person allows you to be more personal and share some quirks that your particular audience enjoys. This works well for those who have an identifiable following or are in a more creative industry. It is less advisable if you are relatively unknown. People are not so willing to put faith in a stranger who says he loves vampire movies, despite being a talented whatever. It also may sound decidedly un-businesslike to some as well.

Use third person when you are on other people’s websites and on commenting tools such as Disqus. Use first person on your home website and personal social media profiles. Decide what the “personal quirk” for your personal bio will be (no politics, religion or other highly divisive issues).

You will need a third person and a first person bio prepared.

Step 3

What are your most impressive accomplishments?

top awards?
building a successful company?
position on a company?
working for a big name/brand?
publications?
personal achievements?

Choose 2 - 3 of your achievements/characteristics most relevant to where your bio is appearing.

Step 4

What are you doing right now?

Most people define themselves by their jobs. You can be more creative about it if you like - a blogger could also describe him/herself as a “wordsmith extraordinaire”, if they wanted to add some flair. This would, again, depend on the audience you are expecting to win over.

Write a 10-word sentence about what you are doing right now.

OK, so what have we got?

You will need a third person and a first person bio prepared.
Write a 10-word (max.) sentence about what you are doing right now.
Choose 2 - 3 of your achievements/characteristics most relevant to where your bio is appearing.
Decide what the call to action/purpose of your bio will be.
Decide the “personal quirk” for your personal bio.

Case study #1: Denis Duvauchelle’s author bio on The Next Web

What is Denis doing right now?

Denis stated his full name (linked to his Twitter account), most important title, and included a website link (with a tracker code so he would know which bio got clicked) of where he wanted people to go:

Denis Duvauchelle is the CEO and co-founder of Twoodo ...

What is the call to action/purpose?

To tell people about what his product does:

… helping your team organize itself using simple #hashtags.

Relevance to the publication

This bio appeared on The Next Web, and Denis wanted to attract startups, people interested in collaboration tools and supporters of remote working - Twoodo’s brand. The readership of The Next Web was identified as an ideal audience for this. The long-form author bio is currently this:

Case study #2: Denis’s personal bio on Twitter

What is Denis doing right now?

He establishes authority by stating that he is CEO and a contributor to a top website:

#productivity freak. CEO of @twoodo Help your team organize itself using simple #hashtags Contributor to @thenextweb.

What is the call to action/purpose?

To tell people in a simple manner what his product does.

Relevance to the publication

Twitter is a platform for seeking like-minded people, so he puts the hashtags they are most likely to use in his bio to make his profile easy to find:

#productivity and #hashtags (the tool is based on hashtags)

Full bio:

Other factors to take into account…

word limits (the famed 140-character limit)
link limits (usually 2)
editor of a publication may define what you specifically can and cannot say
are you representing a company or representing you?
you may need a long-form bio for some places

And remember…

Keep an account of where your bios are visible, and preferably what each says. When you change career, change the call to action and so on you will need to update all of them. Re-visit your bio every 3 - 6 months (i.e. a reasonable amount of time during which you think you will have something different to say).

Here are some additional questions you should ask yourself before you begin to write your online author bio.

Let’s rate some bios!

Example 1:

This is extremely short and concise. We know this person’s two occupations and specialities in two sentences. We know she is a great writer because the website she writes content for only accepts the best, so she doesn’t need any more credentials than that. We can easily find her on Twitter and Facebook, and also visit her website which shows transparency. The photo has her wearing a crown, conveying a humorous character. It is neither showing off nor being humble - the tone is perfect.

Trust rating? 8,5

Example 2

Too long! The first sentence was enough. There was also no reason to ask people to follow her on Twitter since the social share buttons are just below. This comes across as far too self-indulgent but yet does not specify which places she has actually worked for. The ending tries to get some humour across but most people wouldn’t have bothered reading that far. The photo was pretty big so I cut it out - it was nice, I promise.

Trust rating? 6

Example 3

Impressive credentials make this serious bio interesting to read. It shows off skills but in a matter-of-fact tone. There are no social media connections available nor website - however, the publications listed mean he is probably pretty easy to find.

Trust rating? 9

Example 4

The first accomplishment mentioned is boring. This bio takes a more story-like form, which works for those in the literature industry, which he clearly seems to be aiming for. However, this was on a tech website. I’m confused - why would this tech website be a perfect place to write for him? It sounds like he’s forcing out as much fancy wording as possible with the hope of… I have no idea. If I’m on a tech website, I want someone who knows how to write about tech.

Trust rating? 4

How to pre-prepare networking at conferences to get ahead with lead generation

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This article shows you:

networking basics with thought leaders and potential investors before a big event
how that leads to better quality networking at conferences

Our experience with networking at conferences

It was awesome attending the Dublin Web Summit 2014 - we not only attended, but pitched in the ALPHA competition. Where else would we get such an opportunity to make ourselves known? We could stand in front of all the names that we pay homage to in tech, the people who inspire us, the people who make us get up in morning and say “if they can do it, why can’t we?”

In an earlier Web Summit blog post, Noel Ruane laid out some simple, practical advice on meeting investors: don’t waste time with an unknown “investor”, actively try to meet the people most relevant to your business, and don’t go around pitching in people’s face. This is relationship building, not cold calling.

Fantastic advice! But if you are just one of hundreds of hungry startup CEOs with no previous connections to the big names, how do you bridge this gaping network hole? Ideally, you want a steady number of meaningful meetings per conference day set up in advance. So how do you network before a conference?

The key is preparing well in advance (sorry it’s not something sexier than that).

1. Decide if you are going big or going narrow

What do you need right now - advice? €100,000? €1,000,000? Should you spend your time with mentors, angels or VCs? Jot down a clear list of what your startup needs most, and what kind of person would best serve that need. Also calculate how many meetings you can realistically squeeze in per day.

You don’t want to waste your time, and nor do you want to waste the time of someone who cannot help you.

2. Start with the conference attendee list if you have one

First, extract the names you already know you want to meet, and put them aside. The Web Summit had a HUGE list, and it was organized algorithmically to put the people generating most interest at the top. We took the first 75 names with the intention of distilling it down to about 20 - i.e. ten meetings per day. Check the names on your list out on Angel.co, Gust or LinkedIn based on your criteria. If they don’t have a personal AngelList page or their LinkedIn profile is not visible to you, check out their company profile and see if it’s a business and a model you would like some insights on.

Eliminate anyone that has nothing to do with your needs.

3. Go back to the list of people you already know you want to meet.

Check out their AngelList profile and check if they have expressed interest in your industry, and if they are willing to conduct business in a part of the world that suits you. Some quite strictly only deal in the USA, for example.

Even if you love and respect them, only make time for them if they are relevant or you really have time to spare for recreational face-to-face networking.

4. Rinse and repeat step 2

Do this until you have a list of relevant people long enough to fill the time you are spending there.

5. Linking up in advance online

This is the harder part, especially for the most famous names. However, with perseverance, you can get lucky.

Step 1: decide what you want to ask, and keep it to the point (we went with asking for a quick meeting at the Summit, followed by inviting them to watch us pitch, and to come by the stand if they had the opportunity)
Step 2: ask to get introduced on LinkedIn/directly request a connection on LinkedIn and send an in-mail. Using LinkedIn came recommended from colleagues of ours as sending an email to people who receive hundreds of emails a day makes it hard to stand out.

Step 3: send a follow-up message after a day (1 - 2 lines) - we expressed our hope that they have a great time, hope to bump into them, and mentioned our pitch time and location if they would like to check us out

Step 4: gather Twitter handles, and send them a tweet with your desire to meet up

Step 5: reminder tweet a day or two later (some of you might complain about this one. Let’s just call it “perseverance” - or go hard, or go home!). And use your personal account, NOT the business account!
Step 6: ask the conference organizers to set up your “most wanted” connections for you if you have been unsuccessful thus far

Step 7: hunt for email addresses on their personal blogs or their own companies - you’d be surprised how many you can find!

There are some useful tips on how to find people to contact if you don’t already have a personal wishlist.

6. Once you have your meetings arranged, make your list of questions

Start with the most essential questions and work down by priority. This will help you get the most valuable information before the person gets whisked away by another eager beaver.

Get active on social media in advance of the conference, and use related hashtags on Twitter so that you stand out and get noticed. Participate in online forums and chats with people interested in the event or attending the event (eg. the Facebook page or Twitter):

The important thing is to GET NOTICED!!!

Also check out this thorough guide to networking at conferences for startups from ClarityFM.

How we increased our activation rate from 2% to 30% in 10 steps

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This article shows you:

how we set up a kick-ass customer feedback loop that helped increase our activation rate from 2% to 30%

One of the greatest lessons of the past few months is that when building a SaaS company (or more specifically a team collaboration tool for the #hashtag generation) you shouldn’t overlook the soft data just because it’s not hard data. This is especially true when following lean methodology. Talk to your customers, always. Especially if you are serious about increasing your activation rate.

Ok, so that’s easy to say, but what does it actually mean and how do you implement it?

I’d like to share with you the tips, tricks and tools we used to develop a kick-ass customer feedback loop - even though we were still in private beta and we didn’t have huge amounts of traffic (around 200 unique visits per day). The feedback we have collected has greatly helped us increase our activation rate and engage with our users. It has also given us great insight into what features we should be building for our early customers.

1. We chose to go the “private beta” route

The first three months of Twoodo were spent in private beta mode. There is a debate about whether a SaaS startup should be open right from the start, but we decided to stick with the control that a private beta offers. The main argument for this was that it would allow us to incrementally grow our website at our own pace. We also wanted to only let who we had identified as our true early adopter segment right from the start. I’ll explain this a little further down.

In the first month of our private beta, we were extremely strict as to who we would let in. In order to be allowed to use the tool you would have to

Sign up to the waiting list
Fill out a questionnaire
Agree to a short Skype “webinar” with us (we ended up not enforcing this one as the survey gave us plenty of information)

2. Create a questionnaire that your users have to fill in

We set up an “Add me to your waiting list button” as the main call to action of our landing page.

After you signed up you would receive an email from us asking you to fill out a questionnaire that we had created with Google Drive. You would only get access to Twoodo if you filled out the questionnaire.

To be honest, the questionnaire was pretty long and painful to fill out but we did that on purpose. By doing this we were sure that the users we were letting in REALLY had the pain we were solving and REALLY wanted to use our solution. You’d be amazed at how many people actually accepted to fill out the questionnaire. We were amazed ourselves. More than 50% of signups filled it out. Not only was this additional validation that we were solving a real pain, but we got tons of invaluable information such as:

the types of users that we were attracting,
the size of their teams,
their industry, the location,
the tools they were using, their workflows,
the pains that users were having with other tools,
some initial insights as to the functionalities they were looking for.

Without realizing at first, we had actually started a conversation with them. This is when we dropped the compulsory “Have a quick Skype with us” step to getting access to the website.

We were actually getting real live user cases within the questionnaire, a fantastic profile of our users and the size of their teams. We could use this information to then make their activation process easier and to start a real conversation with them.

At this point, our activation rate was 2% and the sign-up process was messy.

3. Offer a Skype webinar right off the bat!

The next email that we sent them was a “Thank you for filling in the questionnaire” + invitation link to the site, followed by an offer to do a 10-15 minute Skype webinar. The webinar had 3 purposes:

Our onboarding process wasn’t great at the time so this would help activate the user.
We could get live feedback as to what problems they had faced when first using tool.
We could create a relationship and learn to know our customer even more.

For the webinars we planned to follow this simple format:

5 minutes: understanding who we were talking to, what was their workflow, what was their pain.
5 minutes: onboarding them to Twoodo based on understading of their pain/workflow
5 minutes chit-chat and Q/A

They usually lasted well over 15 minutes. We started out by using Skype but then switches to Zoom.us after a while. The share screen on zoom works so much better than on Skype and was free up to 45 minutes.

Through these webinars we understood right away that our user interface was too complex. We were bombarding newcomers with too much information. This pushed us to carry out a large user interface simplification. Although not all users had the time for the webinar, the ones who did gave us great information. They are still using Twoodo today and have become some of our most insightful sources of feedback. The conversation with them has never stopped.

Through simplifying the user interface and making a first attempt at our on-boarding process, we increase the activation rate to 8%. This still wasn’t great. We needed more information as to WHY the other 92% were not having a great first time experience.

4. In-app messages

In general people will try your tool out for about 1 or 2 minutes and then either adopt it or abandon it forever. Getting feedback on those first seconds of a user’s journey are vital to increasing your activation rate. What did they like? What blocked them? What didn’t they understand? Was it our colors? Is there too much text? Are they seeing that big red button they’re supposed to click on? These are all crucial User Experience questions that we HAD TO answer in order to increase our activation rate. Tools like intercom.io (which we love) have the great advantage of offering in-app messages that you can trigger when you like. Here’s what it looked like on our website.

Closeup..

We set the in-app message to appear as soon as the user was finished with our 4-page walk-through (or had clicked “skip”) and started using the tool. Users saw a picture of David and a very short message. All they have to do was click an input box to give their feedback. There’s almost no effort for the user to send us a message (unlike sending us an email, or using a contact form) so we got tons of feedback from this. We identified some really basic things that users were not clear about and were able to fix those rapidly. Here’s some random examples of the feedback we received:

We established a list of all the feedback and grouped them by category. Some points kept coming up. The ones with the highest score would be attended to first.

We learned TONS from this.

1. Our product walk-through and on-boarding were still too confusing so we needed to simplify them

2. Users didn’t know how to add their friends to the platform

3. Some browsers were more tricky than others

4. The list goes on…

We fixed all these issues and progressively tested our new solution. We also started carrying our usability tests on www.usertesting.com. At this point we also started populating the most recurrent questions into a FAQ on a Google doc for future use.

After a month or so of testing and tweaking, our user acquisition rate had reached 17%

5. Install a live-chat. Be online.

Another great way to get feedback from users is to use integrated Live Chat systems. We opted for Olark as the installation was quite simple and they offer a free version (kind of hidden on their pricing page) for up to 20 chats per month. If you’re having more than 20 chats per month with your users, I’d definitely suggest to start paying for one (I know there are a bunch of other tools out there for live chat so feel free to share them in the comments).

We all installed Adium and linked the Olark live chat with our Adium accounts. Everyone committed to signing in to Adium as soon as they had our laptops on. It ended up being a bit too distracting for some of the technical team but we were sure to have at least one person from our team online at all times and it was really worth it. We received tons of user feedback from the live chat. We were also able to activate users live, get more info on what was confusing about our website and kept on filling up our FAQ guide for later.

Another cool feature is that you can see everyone who’s on your website at any given time with notifications that pop up during the day on your screen. To be honest, it was cool at first but became very distracting later on. Nevertheless it was a motivating “real time analytics” tool and if you wish, you can engage with users spontaneously.

At this point our activation rate had risen to 19%

6. Next day message for non-activated users

81% of users were signing up to our website, were giving good initial feedback to the in-app message, but were then still not using the tool. They had signed up but hadn’t been activated - they hadn’t been through the “minimum delightful experience”. So rather than playing an endless guessing game we decided to ask users why. Using Intercom we set up an automatic email that would be sent to “unactivated” users the very next day after they had signed up. As you can see we also used this message to introduce the iPhone app. Here was the message:

The major finding was that many of them were extremely busy and just hadn’t had the time. Some of us thought this meant “their pain just isn’t big enough”. Other thought we should continue trying to activate them while it was still time.

7. Drip email campaigns

We learned that if you’re trying to activate users on your website, there’s one good thing to know. A large proportion of users who sign up to your website and then don’t actually use it, do so just because they don’t have time. The main learning from this was that drip email campaigns are extremely valuable. We set them up using Intercom.

By setting up emails based on user behavior and sending them at 1 day, 3 days, 10 days and 25 days we were able to increase our activation rate to around 28%. We’re still working on improving this drip email campaign and hope it can take our activation rate past 40% in the near future.

8. Using our own tool

Twoodo is an online team collaboration tool. Because of this, we could also use our own tool to interact with users and improve our activation rate and retention. We created a “global” team called +twoodo-team. Users could simply post a message to +twoodo-team and we would all see it. Everyone in the team could then answer user’s questions and interact with them. It gave users a feeling of transparency and we got tons of feedback through this channel. The friction with contacting us was almost nil. We later changed our in-app message to explain to users how to contact us directly on Twoodo. This was great because users could use the tool and contact us at the same time. We could then reply and engage with them. If your tool has any such possibilities, grasp it right away.

At this point our activation rate is around 30%

9. Contact form

Like any website we had a contact form. The link to the contact form was in the footer. I’d say a contact form is a good first step solution if you have nothing else in place. But as we implemented all of the above tools, our contact form was seldom being used anymore. The friction and effort for users to fill out a contact form are simply too high. We get very few messages through it today.

10. Build a community

We love websites like Stackoverflow and Quora. They’re great communities that answer important questions. We’re thinking of building a similar community that will act as our FAQ + community + customer support desk.

What we’re thinking of implementing now: Qualaroo

Qualaroo looks like a fantastic tool to get users to answer short specific questions. Here are some examples:

Conclusion

You’ve made it this far so I’ll make this brief. Every user has different preferences as to how they will interact with you and at different times. I’d advise you to cast the widest net possible using the most customer feedback channels possible to help make your tool truly awesome. And don’t forget that the only SaaS sales strategy you need is listening to customers and offering them continual support.

In the next post, we will explain how we increased our activation rate from 30% to 75% using gamification and by continuing to talk to users.

One last tip to bear in mind - get your landing page right (check out this article).

If you are going to read one intro guide to SaaS startup metrics, this is it

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This article shows you:

the 5 approaches to metrics by Lars Logfren, Dave McClure, David Skok, Aaron Beashel and Tomasz Tunguz
a fast and comprehensible guide to SaaS startup metrics for people with little time to waste

Months after launching the first version of Twoodo we learned again and again to talk to our customers and to set up metrics to start measuring. Metrics, KPIs, metrics, KPIs! They enable you to analyze your user’s behavior, track progress, show traction, find bottlenecks and know what part of the sales funnel needs the most improvement.

Easier said than done.

You can easily get lost in what you should be tracking or how to track it. I know we did. So we sat down and decided to take care of it once and for all, and we came up with this guide to SaaS startup metrics.

We had read and stored tons and tons of articles on metrics. We finally decided to lay them down and summarize what we had learned in order to decide on what metrics were right for us early on in the game. We found that there were five approaches to SaaS metrics that really stood out. They would all be useful depending on what we trying to get out of it:

metrics to improve you product on,
metrics to impress VCs,
metrics for board meetings,
metrics for the fun of metrics etc.

We know that startup CEOs generally have very little time on their hands. Jumping into the metrics game can be quite daunting. That’s why we’d like to share with you our findings and hopefully help you save some precious time. It’ll then be up to you as to which approach you want to integrate and how much time you want to spend on it. This is in no way an exhaustive list. I’m more than open to being corrected or to receiving additional information to this guide to SaaS startup metrics.

A Guide to SaaS startup metrics

1. The practical: Lars Lofgren

Lars Logfren has a very practical approach to metrics. It was an eye-opener for us. Basically put, the metrics you measure should depend on the advancement of your startup. For example, ”If you’ve only had paying customers for 2 months, it doesn’t make much sense to track lifetime value. But later on lifetime value is essential”. The great thing about these metrics is that they incorporate what stage your startup is in. That’s golden when you’re not certain about what you should be measuring. Here I’ve tried to summarize the 5 stages but you can see the full article here.

Stage 1 - Before product/market fit

This is when you still haven’t pinpointed who your ideal customer is. Carrying out customer interviews should help you validate who that ideal customer is. These customer development interviews are basically meetings or preferably Skype chats (less time-consuming) with potential users. They enable you to find out who the user is, what his main pain point are and whether your solution is solving that pain. The great thing is you can have an analytical approach to these meetings in order to come up with metrics.

Product-Market Fit Conversion rate =

Total # of potential users you interviewed who, liked your solution and decided to start using it / Total # of customer development interviews you carried out

>> “YES/NO this is our ideal target customer”

Stage 2 - When you think you have product/market fit

Sean Ellis came up with a survey question that allows to quantify and measure product market fit. It’s so simple and ready to implement that we used this technique over and over. The question should be asked to any users who have used your tool/website more than twice. Here is the question and multiple choice:

If we took away our product from you right now and forever. How would you feel?

Very disappointed
Slightly disappointed
Not disappointed
Not using the product (N/A)

Product/market fit rate =

Total # of users who replied “Very disappointed” / Total # of users interviewed

“You should have more than 40% here. If not you don’t have product/market fit yet.”

Don’t despair. It took us some time to get to that 40% rate. Read Sean Ellis’ article to see what you could do if you don’t get those 40%.

By the way, the survey is all ready to use and implement here. All you’ll have to do is put in your company name.

Stage 3 - When you’re certain you have product/market fit

Now that you’ve reached this stage, you’re starting to scale and experience serious growth. There are two main metrics you’ll want to look at.

Monthly Recurring Revenue which is the total revenue earned from the sum of all monthly subscriptions

Monthly recurring revenue (MRR) =

Total revenue earned from the sum of all monthly subscriptions

“Your target should be to keep this growing, always.”

Churn: This is the monthly number of paying customer who drop off. This number has a negative impact on your MRR. This number should stay under 2%. If it doesn’t, drop all else and concentrate on getting it under that level.

Your monthly customer churn rate (Churn) =

Number of subscribers cancelling their paid subscription this month / Total # of paying customers

“This number should stay under 2%. If it doesn’t, drop all else and concentrate on getting it under that level.”

Stage 4 - Growth has slowed down

At this point, growth from your main acquisition channels has slowed down. You start exploring new, riskier acquisition channels.

Customer Lifetime Value (LTV): How much money does a customer bring you before he leaves your product?

Customer Lifetime Value =

MRR / # of paying users x how long on average a customer keeps paying for your product before he drops off

Customer Acquisition Cost: The total cost it takes to acquire a paying customer from a particular acquisition source.

Customer Acquisition Cost =

Sum of all expenses made on a particular acquisition channel / # of new paying customers added through that channel

“A common rule is to keep CAC under a third of LTV and that a customer should become profitable within 12 months.”

Here are some more awesome insights from Lars.

Ultimate Guide to SaaS Pricing from KISSmetrics on SlideShare

2. The well-rounded: AARRR Pirate metrics

Pirate metrics is a funnel based approach to metrics developed by Dave McClure. It’s pretty awesome and almost totally straightforward. I wouldn’t recommend it before you’re at least at the stage 2 we mentioned above. It goes like this: AARRR = First concentrate on Acquiring users, then Activating them, Retaining them, getting them to Refer you to other people and finally getting them to pay (Revenue). Here’s a pic of what is called The Sales Funnel stolen from Ash Maurya’s blog post on the subject.

Acquisition channels = How many unique visitors are you getting each month from each channels they are coming from. Here’s a very basic example.

Organic search = 2000 unique visitors per month

Keyword 1 = 1000 uv/m
Keyword 2 = 500 uv/m
etc..

Paid search = 1000 unique visitors per month

Adwords = 400 uv/m
Display campaign = 300 uv/m
Retargeting campaign = 200 uv/m
Linkedin ads = 100 uv/m

Referral = 1000 unique visitors per month

Twitter = 400 uv/m
Techcrunch = 300 uv/m
Guest blogged article = 300 uv/m
etc..

Direct = 1000 unique visitors per month

Acquisition conversion rate: Out of all the unique visitors who visited your website from each channel, how many performed a basic action to start using your tool? (such as, and/or…created an account, clicked on a link, commented on a post, downloaded your app, stayed more than 2 minutes etc..)

Acquisition conversion rate =

Total # of users who signed up to your website from a channel / Total # unique visitors to your website

Measure these for a certain period of time, month, week etc.

Activation rate: Out of all the unique visitors who visited your website, how many had an awesome first time experience? (this can be determined by tracking certain events. For example: and/or …created an account + gave you their email address + clicked on a certain feature + stayed more than 5 minutes + added an avatar picture + added their first and last name + finished the walk-through).

Activation rate =

Total # of users who signed up to your website and had a great first time experience on your website / Total # unique visitors to your website

(For a certain period of time, month, week etc.)

Retention rate = Out of all the unique visitors who visited your website for a specific Month (M) how many keep coming back and using your tool actively in later months M+1 M+2 M+3?

Retention rates are measured in cohorts. It’s a scary term at first but it’s actually super simple. Christoph Janz is the king of cohorts. A cohort is just a group of people within a specific period of time. Everyone who signed up in April = The April cohort.

May retention rate % for the April cohort =

Total # of users who signed up to the website in April + were activated + are still coming back to the website in May and actively using it / Total # unique visitors to your website in April

June retention rate % for the April cohort =

Total # of users who signed up to the website in April + were activated + are still coming back to the website in May and actively using it / Total # unique visitors to your website in April

Referral rate = Let’s put this very basically, for every 10 new visitors who sign up to your website, how many people do they invite to your website? Then how many of those invited over actually create an account?

Referral rate =

# of people who signed up after being invited over / Total # of people who signed up during that period (of course, excluding the invited ones)

This number is super important. Let’s say you have a referral rate of 50%. That means that for every 10 visitors who sign up, you’re actually gaining 15 new users. A referral rate over 100% means you have achieved viral growth. You can also calculate this the way Dave McClure does:

Revenue = How many users are paying for your product monthly (MRR), how long will they keep paying (CLTV), and how much did it cost you to acquire them (CAC) as paying users. Hey wait! Isn’t that similar to the Lars Logfren style? Yup it is. You’ll see more and more cross over from now on.

Monthly recurring revenue (MRR) =

Total revenue earned from the sum of all monthly subscriptions

“Your target should be to keep this growing, always.”

Customer Lifetime Value =

MRR / # of paying customers x how long on average a customer keeps paying for your product before he drops off

Customer Acquisition Cost =

Sum of all expenses made to acquire new customers / # of new paying customers

If you like this, here are some other (more in-depth) resources for pirate metrics:

Startup Metrics for Pirates (Startonomics Beijing, June 2009) from Geeks On A Plane

http://practicetrumpstheory.com/2010/07/3-rules-to-actionable-metrics/

3. The VC / Skocket scientist: David Skok (sorry for the bad pun)

Meet David Skok, a SaaS metrics guru. His blog posts have some of the most exhaustive and detailed explanations on what metrics to look out for, and most importantly how to set them up. VCs and entrepreneurs alike follow his lead. Almost all the metrics explained above were deciphered using his formulas.

David Skok puts great emphasis on two extremely important metrics:

LTV : What is the monetary lifetime value of a customer

CAC : How much does it cost to acquire a typical customer

In one of his blog post comments he details some of the most important metrics to present when meeting with VCs.

MRR Churn Rate =

Churned MRR / MRR from previous month

CAC =

Total of all sales and marketing channels to acquire users / Number of new customers added

LTV =

Average MRR per account / Average Customer lifetime duration

LTV:CAC ratio =

LTV / CAC

Months to recover CAC =

CAC / Average MRR per account

MRR Graph = MRR evolution over time

Net New MRR Graph (showing the three component parts as well: New MRR, Churned MRR, Expansion MRR) =

Evolution of: (Churned MRR - Expansion MRR) / MRR from previous month

To go into more detail, I’ll invite you to read these three blog articles. Even though we don’t yet use all of the metrics provided, they’ve given us a whole new perspective on the SaaS startup game.

4. The creative binge-eater: Aaron Beashel

While most articles would advise you to concentrate only on the most important metrics, Aaron Beashel does exactly the opposite. He gives us everything. I’ve highlighted here some of the most interesting and creative ones. I find it particularly interesting the way he uses Time.

Average Revenue Per Customer – Average revenue an individual customer generates over the given time period
Time to Purchase – Average time it takes people to go from sign-up to purchase
Time to activation – Total time it takes to go from sign-up to activation
Logins to activation – How many times a user logs in between sign-up and activation when coming from the selected customer acquisition channel
Logins to Purchase – Total number of times a user logs in to the application before Purchase.
Time to paying – Average time it takes people to go from sign-up to paying customer from the selected customer acquisition channel

If you’re feeling creative, you’re gonna love his style.

5. The board member: Tomasz Tunguz

Tomas Tunguz is one of my favorite people to read on the internet. He’s all about data and no BS. This approach to metrics is used to answer high level questions (by investors, board members, VCs) on how your business is doing. It’s extremely straight forward.

The metrics are cut into three groups:

Distribution:

Engagement:

Revenue:

To calculate these you should also understand the concept of “Trailing six month average” (TSM). TSM is just the average growth rate over the last 6 months. So for example if your rates are consecutively 5% 10% 15% 20% 25% 30% your TSM is (5%+10%+15%+20%+25%+30%)/6 = 17,5%

There’s no real point in me copy-pasting more of his findings here. Like I said he’s very easy to read. So I suggest just go to his post which are always pleasantly clear and concise.

If you’ve made it this far congrats. I’ll leave you with a few tools that we use and recommend when setting up your metrics tracking.

Mixpanel
Kissmetrics
Google analytics
This excel sheet by Christoph Janz found on this post by Andrew Chen

I hope this guide to SaaS startup metrics will be useful for you!

Also check out this epic slide deck by Andreas Klinger

Startup Metrics, a love story. All slides of an 6h Lean Analytics workshop. from Andreas Klinger

Find out why early adopters are the secret ingredient to your future success

5 Replies

This article shows you:

how to develop your personas
how to test your landing page(s)
how to hustle for people to come to your page to test it

There’s a killer article by Ash Maurya that explains why your app or website doesn’t need (and shouldn’t try) to attract thousands of users right from the start. The basic idea of lean methodology is to build your product based on user feedback and user metrics. But that can be hard at first (I haz no users!) AND can be dangerous if you’re not building for the right users. It takes long hours and sometimes big bucks to acquire users. You want to know who your best users are and where to find them BEFORE you start spending countless hours on acquisition channels to attract them to your site.

Fine, but tell me more about why this matters!

Since your early adopters are the ones who feel the biggest pain towards what you are solving, they will be the most responsive to your solution. They will be the most likely to continue using your product. They will be the most tolerant to any bugs an early version of your product has. They will be most likely to promote your product to others and become your evangelists. And don’t forget they will probably be the most likely to pay for your product - sometimes before your product even exists! So identifying who your early adopters are as soon as possible is extremely important. Not only will it give your company early traction, but it will also ensure you are building your tool based on the right feedback.

That’s great, but how in the heck do you identify these early adopters??

At Twoodo we all had different assumptions on who our early adopters would be. Each one of us came up with a persona of who we thought would adopt our tool the fastest. We did this each in about 15 minutes, nothing too fancy. I’ll share here a template for customer personas you can print and use.

These were the personas we came up with:

The entrepreneur: Tech startup CEO
The techie: Programmer part of a tech team in a medium-sized company
The project manager: Small team manager in a large corporation
The student: University student working on projects
The remote team leader: Leader of a virtual team, works with remote workers

We then spent two weeks getting out of the building, meeting people and making Skype calls to people who fit these criteria. In total we carried out a little over 100 customer discovery interviews. It took quite a while. We hoped that would be enough to take a clear decision. But even after those interviews, we still weren’t 100% certain of which personas had the biggest pain. Which segment was really going to be our strongest early adopters. The data just wasn’t clear cut enough. We needed a way of testing that was more scalable and that didn’t involve so many man hours. Here’s what we did.

1. We built 5 problem-oriented landing pages

First we designed a template for a “problem-oriented landing page”.

1. Logo + tag line
2. Description of the PAIN that we were solving
3. Very brief explanation of our solution
4. Link to a video and/or full explanation of how our product works
5. Sign-up form to our “waiting list”

Here’s an example you can use if you want to build your own. I used an ingredient delivery service as an example. I have no idea why.

We then briefly adopted the tag line to the personas we wanted to test. The generic version was “The ultimate teamwork tool”

After adaptation it was..”The ultimate teamwork tool for startups“, “The ultimate teamwork tool for students” you get the point…

We then used Google Analytics goal tracking functionalities to track two main conversion points:

a. Pain conversion rate: How many unique visitors to our page from each segment validated the pain we were addressing = How many people clicked the link to see the video / total unique visitors.

b. Solution conversion rate: How many unique visitors to our page validated the pain AND the solution we were offering = how many people signed up / total unique visitors.

It was very important to track both of these events. It would enable us to determine which group felt the biggest pain and whether the solution we offered was adapted to them.

NOTE: If you don’t have in-house coders, you can use Optimizely or Unbounce which are extremely easy to use.

2. We attracted visitors from each persona to test conversion rates

Each product is different and so requires a different number of people to test it. Since choosing our early adopters would have so many implications on our future acquisition efforts, we decided to only make conclusions based on at least 400 visitors per page.

So how did we acquire visitors with minimal funds?

Free hustle techniques (takes a bit of time but is totally dollar-free)

Lets use the Startup CEO persona as an example. Since building our personas and carrying out customer discovery interviews we knew all our personas quite well. We knew:

what issues they were facing,
what kind of keywords they were searching on Google,
what questions they needed answering,
and where they like to hang out on the internet.

We then used a number of free “hustle techniques” to attract them to our Startup CEO landing page.

1. Linkedin Groups and Google Plus Communities

Linkedin groups are a great way to find groups or people with common interests and get their attention for free. Look for specific groups that you know your persona is likely to be taking part in. You can then post a brief message explaining the pain you are solving and a link to your landing page. We posted on approximately 20 groups per persona.

Here is the structure of what we posted:

Introduce yourself as one of the personas so that readers can identify with you.
Describe the pain
Short explanation of the solution
Kindly offer people to come check out your solution

Here’s an example of a post:

“I manage a 6 person startup. Our main issue was that we are using too many different tools to communicate and collaborate (email, chat, skype, task management tools etc). Information is getting lost and team members are being distracted. We tried a bunch of project management tools but most are too complicated to use and or too rigid.

We came up with our own solution, a collaboration language that uses simple tags and allows for actionable conversations using twitter-like language. Please check us out and tell me if you agree with the problem we are solving. We’re currently in private beta so feedback from you guys is more than welcome! (it’s all free).

www.twoodo.com/the-ultimate-startup-collaboration-tool”

We usually got 80% of our Linkedin visits from only two or three of the groups we posted in. Make sure the groups have many members and the activity looks quite high.

Also, some groups require an invitation. Just ask to join and you’ll get accepted in 95% of the time. Private groups tend to have a more quality reader base.

2. Quora questions

Quora is similar to Linkedin groups in that a bunch of like-minded people interact on common subjects. We used the same structure as for Linkedin. We found questions relative to Startups and collaboration tools. We then posted our answer as a suggestion to come check out our solution.

We also posted a few questions like “what collaboration tools should a startup CEO use?” and answered it ourselves 2/3 days after posting. This didn’t work so well though so we dropped this technique rather quickly and even erased some questions for fear of seeming spammy. Answering questions did however drive good traffic.

Oh and don’t forget, you can also use the same technique on Quibb or also Yahoo Answers (especially if your persona is more consumer that enterprise)

3. Twitter

Following someone on Twitter is a great way to grab their attention for a few seconds. We used a tool called Tweet Adder that let’s you search for what people are talking about and rapidly start following them.

For every 100 people we would follow, we’d get an average of 8 unique visitors to our landing page. Of course this depended on the search we made and on the persona. If you use this hack, don’t forget to unfollow them 3 days after following them or your twitter follower stats are going to be a mess.

We also used Followerwonk to search people’s Twitter bios for the same keywords we had used on Tweet adder.

4. Comments on blogs

This is a great free acquisition channel. It takes a long time to carry out but we’re still getting visits from it today. Search for a keyword that would interest your persona. We used the same ones as on Twitter. For example, I searched for “Startup CEO tools” and proceeded to comment on all the blog articles that accepted comments. I limited this to the first page of google. Sometimes going to the second. We used a very similar text to the one used on Linkedin groups. The main difference was that we would first add something to the article. This would usually be a link to a useful resource relevant to what the article was discussing. This shows that you’re interested and not just posting spam comments. So always give before you ask for a favor. Reaction to the article first; request to go to your landing page second. Here’s a full guide on how to use blog commenting as a traffic-driving technique.

Paid acquisition: $5 a day Adwords campaign

Hustle techniques are great but they might not always provide you with a fast and reliable flow of visitors. We wanted to finish our test in less than a week. Three of our pages were getting the necessary traffic, but two weren’t. Then I was given this article by our lean apostle Kees van Nunen. By using some long tail techniques you can find a constant and steady stream of visitors to make up for the gaps. At a minimal cost.

We came up with a list of about 10 keywords for the 2 personas that were lagging. Here’s what we used for project managers:

“project management”

“project management tips”

“project manager tools”

“project management tools”

etc..

From these lists we then used Adwords free keyword planner tool to come up with about 500 long tail keywords which had low competition. Although each keyword would have little traffic, they were dirt cheap, and if I used enough of them I could achieve good numbers. Here is a step by step (screencaps will be included):

1. Find about 10 keywords or expressions that your persona would search for

2. Choose only keywords that say “low” but have thousands of searches attached

You end up with a phrase or keyword that a lot of people are searching but there are very few answers for - you will be their God and give them the answer, therefore…

3. Create ads tailored for your personas

Within 2 days, all the gaps were filled. We spent a total of $35 (US) on the adwords campaign.

Since carrying out this experiment we’ve found tons of other techniques you can use. This article details a bunch of them and this article by Jason Evanish

As a side note I’d suggest that if you’re making ANY user acquisition efforts I’d highly recommend using Google’s URL builder to track your efforts through UTMs. It will work with Google Analytics, Mixpanel, Kissmetrics and tons of other analytics tools. We’ll write about this in more details soon.

Conclusion

As a conclusion I’d like to share we you the stats we obtained after 10 days of running this campaign.

There were 2 clear winners here. The Startup CEO and the Techie. Not only were their conversion rates higher but we also obtained unique visitors from these personas much more easily. The interest was simply greater from these types of users. The pain we were solving was much bigger for them.

Based on these results and from our customer interviews, we confidently started building our customer acquisition channels based on these two personas. We still have user signing up to the tool from other customer segments, but we’ve built the tool around the needs of these early adopters.

About David Arnoux

Confused with analyzing data? Conversion funnels are here to help.

So what am I supposed to be tracking??

How do we count the information that we want?

The big scary setup

If you think funnels are not that important… think again

1. The meeting is defined - scrum? Sales? Weekly catch-up?

2. The person conducting the meeting pre-circulates what will be discussed, so if additions need to be made they can be done on time and not on the fly in the middle of the meeting

3. A meeting is not a brainstorming session

4. Get really strict - the minutes-taker has an ‘off the topic buzzer’

5. Meet immediately about small steps that otherwise slow down everything

6. Present in data, and limit slides

7. It ends and finishes on the prescribed time (or earlier)

8. If you don’t need to be there, don’t be there

9. If you need to be there, be there

10. Research: before you turn up with questions, check out if you can find these answers out by yourself - this saves time for everyone

11. Everyone leaves knowing what they need to do next

12. Make sure there are recreational meetings, not just work meetings

13. No devices if you can’t resist opening tabs

14. Do not make it seem like less meetings equals you are less important

15. Use a tool to measure accountability

16. Answer questions rather than sit quietly

17. Allow a really productive meeting to go overtime

18. Don’t force the casual meetings

Conducting effective meetings just takes a series of small changes

Segment for growth

One size doesn’t fit all

Personalization works for customer segmentation

Where regular segmentation and personalization converge

How can you figure this out?

The big ‘BUT’:

1) Teamwork is how it’s done

2) Human evolution and teamwork: it’s in our bones

3) Types of business teams

Task Force

Cross-Functional

Self-Managing

4) Today’s definition of teamwork

Takeaways from studying other people’s author bios

Designing the perfect author bio

Step 1

What do you want people to do when they read it?

Step 2

Step 3

Step 4

OK, so what have we got?

Case study #1: Denis Duvauchelle’s author bio on The Next Web

What is Denis doing right now?

Case study #2: Denis’s personal bio on Twitter

What is Denis doing right now?

Other factors to take into account…

And remember…

Let’s rate some bios!

Example 1:

Can I skip the SEO?

Your goals with this guide on actionable SEO steps:

Step 1: Google Keyword Search - Finding the Golden Nugget

Step 2: Check the Popularity of the Keyword

Step 3: Where to Include the Keyword

Step 4: Read the page as the bots would

Step 5: Push Google indexing

Step 6: Externally Improve your SEO

Step 7: The Article Title

Our experience with networking at conferences

1. Decide if you are going big or going narrow

2. Start with the conference attendee list if you have one

3. Go back to the list of people you already know you want to meet.

4. Rinse and repeat step 2

5. Linking up in advance online

6. Once you have your meetings arranged, make your list of questions

1. We chose to go the “private beta” route

2. Create a questionnaire that your users have to fill in

At this point, our activation rate was 2% and the sign-up process was messy.

3. Offer a Skype webinar right off the bat!

Through simplifying the user interface and making a first attempt at our on-boarding process, we increase the activation rate to 8%. This still wasn’t great. We needed more information as to WHY the other 92% were not having a great first time experience.

4. In-app messages

After a month or so of testing and tweaking, our user acquisition rate had reached 17%

5. Install a live-chat. Be online.

At this point our activation rate had risen to 19%

6. Next day message for non-activated users