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Index
Lean Analytics: Use Data to Build a Better Startup Faster Praise for Lean Analytics Dedication Foreword Preface
Who This Book Is For How This Book Works The Building Blocks
Customer Development Lean Startup
We’d Like to Hear from You Safari® Books Online Thanks and Acknowledgments
I. Stop Lying to Yourself
1. We’re All Liars
The Lean Startup Movement Poking a Hole in Your Reality Distortion Field Airbnb Photography—Growth Within Growth
2. How to Keep Score
What Makes a Good Metric? Qualitative Versus Quantitative Metrics Vanity Versus Real Metrics Eight Vanity Metrics to Watch Out For Exploratory Versus Reporting Metrics Circle of Moms Explores Its Way to Success Leading Versus Lagging Metrics Correlated Versus Causal Metrics Moving Targets HighScore House Defines an “Active User” Segments, Cohorts, A/B Testing, and Multivariate Analysis
Segmentation Cohort Analysis A/B and Multivariate Testing
The Lean Analytics Cycle Evaluating the Metrics You Track
3. Deciding What to Do with Your Life
The Lean Canvas What Should You Work On? Create a Lean Canvas
4. Data-Driven Versus Data-Informed
How to Think Like a Data Scientist Lean Startup and Big Vision
II. Finding the Right Metric for Right Now
5. Analytics Frameworks
Dave McClure’s Pirate Metrics Eric Ries’s Engines of Growth
Sticky Engine Virality Engine Paid Engine
Ash Maurya’s Lean Canvas Sean Ellis’s Startup Growth Pyramid The Long Funnel The Lean Analytics Stages and Gates
6. The Discipline of One Metric That Matters
Moz Tracks Fewer KPIs to Increase Focus Four Reasons to Use the One Metric That Matters Solare Focuses on a Few Key Metrics Drawing Lines in the Sand The Squeeze Toy Define Your OMTM
7. What Business Are You In?
About Those People The Business Model Flipbook
Lots to Choose From
Six Business Models Pick Your Business Model
8. Model One: E-commerce
What Mode of E-commerce Are You? A Practical Example
Conversion Rate Purchases Per Year Shopping Cart Size Abandonment Cost of Customer Acquisition Revenue Per Customer
WineExpress Increases Revenue by 41% Per Visitor
Keywords and Search Terms Recommendation Acceptance Rate Virality Mailing List Click-Through Rates
Offline and Online Combinations
Shipping Time Stock Availability
Visualizing the E-commerce Business Wrinkles: Traditional E-commerce Versus Subscription E-commerce Key Takeaways
9. Model Two: Software as a Service (SaaS)
Backupify’s Customer Lifecycle Learning Measuring Engagement Churn
Churn Complications
Visualizing the SaaS Business ClearFit Abandons Monthly Subscriptions for 10x Growth Wrinkles: Freemium, Tiers, and Other Pricing Models Key Takeaways
10. Model Three: Free Mobile App
Installation Volume Average Revenue Per User Percentage of Users Who Pay Churn Visualizing the Mobile App Business Wrinkles: In-App Monetization Versus Advertising Key Takeaways
11. Model Four: Media Site
Audience and Churn Inventory Performance and the Sessions-to-Clicks Ratio Ad Rates Content/Advertising Trade-off Visualizing the Media Business Wrinkles: Hidden Affiliates, Background Noise, Ad Blockers, and Paywalls Key Takeaways
12. Model Five: User-Generated Content
Visitor Engagement Content Creation and Interaction Engagement Funnel Changes Value of Created Content Content Sharing and Virality Notification Effectiveness Visualizing a UCG Business Wrinkles: Passive Content Creation Key Takeaways
13. Model Six: Two-Sided Marketplaces
What DuProprio Watches Rate at Which You’re Adding Buyers and Sellers Rate of Inventory Growth Buyer Searches Conversion Rates and Segmentation Buyer and Seller Ratings
Percent of Flagged Listings
Visualizing a Two-Sided Marketplace Wrinkles: Chicken and Egg, Fraud, Keeping the Transaction, and Auctions Key Takeaways
14. What Stage Are You At?
Pick the Stage That You’re At
15. Stage One: Empathy
Metrics for the Empathy Stage This Is the Best Idea I’ve Ever Had! (or, How to Discover Problems Worth Solving) Finding a Problem to Fix (or, How to Validate a Problem) Signs You’ve Found a Problem Worth Tackling Running Lean and How to Conduct a Good Interview How to Avoid Leading the Witness Convergent and Divergent Problem Interviews How Do I Know If the Problem Is Really Painful Enough?
Calculating the Scores
Cloud9 IDE Interviews Existing Customers How Are People Solving the Problem Now? Are There Enough People Who Care About This Problem? (or, Understanding the Market) What Will It Take to Make Them Aware of the Problem? A “Day in the Life” of Your Customer Finding People to Talk To Getting Answers at Scale LikeBright “Mechanical Turks” Its Way into TechStars Creating an Answers-at-Scale Campaign Build It Before You Build It (or, How to Validate the Solution) Localmind Hacks Twitter Before You Launch the MVP Deciding What Goes into the MVP Measuring the MVP
Don’t Ignore Qualitative Analytics Be Prepared to Kill Features
Static Pixels Eliminates a Step in Its Order Process A Summary of the Empathy Stage Should You Move to the Next Stage?
16. Stage Two: Stickiness
MVP Stickiness Iterating the MVP qidiq Changes How It Adds Users Premature Virality The Goal Is Retention Seven Questions to Ask Yourself Before Building a Feature How Rally Builds New Features with a Lean Approach How to Handle User Feedback The Minimum Viable Vision The Problem-Solution Canvas VNN Uses the Problem-Solution Canvas to Solve Business Problems A Summary of the Stickiness Stage Exercise #1: Should You Move to the Next Stage? Exercise #2: Have You Identified Your Biggest Problems?
17. Stage Three: Virality
The Three Ways Things Spread
Inherent Virality Artificial Virality Word-of-Mouth Virality
Metrics for the Viral Phase Beyond the Viral Coefficient Timehop Experiments with Content Sharing to Achieve Virality Instrumenting the Viral Pattern Growth Hacking
Attacking the Leading Indicator What Makes a Good Leading Indicator? Correlation Predicts Tomorrow Causality Hacks the Future
A Summary of the Virality Stage Should You Move On to the Revenue Stage?
18. Stage Four: Revenue
Metrics for the Revenue Stage The Penny Machine
Penny Machines and Magic Numbers
Finding Your Revenue Groove
Where Does the Money Come From?
Customer Lifetime Value > Customer Acquisition Cost Parse.ly and the Pivot to Revenue Market/Product Fit
Review Your Old Assumptions Begin a Process of Elimination Deep Dive Find Similarities
The Breakeven Lines in the Sand
Breakeven on Variable Costs Time to Customer Breakeven EBITDA Breakeven Hibernation Breakeven
Revenue Stage Summary
19. Stage Five: Scale
The Hole in the Middle Metrics for the Scale Stage Is My Business Model Right? Buffer Goes from Stickiness to Scale (Through Revenue) The Three-Threes Model Finding Discipline as You Scale A Summary of the Scale Stage
20. Model + Stage Drives the Metric You Track
III. Lines in the Sand
21. Am I Good Enough?
WP Engine Discovers the 2% Cancellation Rate Average Isn’t Good Enough What Is Good Enough? Growth Rate
Is Growth at All Costs a Good Thing? Bottom Line
Number of Engaged Visitors
Bottom Line
Pricing Metrics Socialight Discovers the Underlying Metrics of Pricing
Bottom Line
Cost of Customer Acquisition
Bottom Line
Virality
Bottom Line
Mailing List Effectiveness
Bottom Line
Uptime and Reliability
Bottom Line
Site Engagement
Bottom Line
Web Performance
Bottom Line
Make Your Own Lines in the Sand
22. E-commerce: Lines in the Sand
Conversion Rate
Bottom Line
Shopping Cart Abandonment
Bottom Line
Search Effectiveness
Bottom Line
23. SaaS: Lines in the Sand
Paid Enrollment
Bottom Line
Freemium Versus Paid Upselling and Growing Revenue
Bottom Line
Churn OfficeDrop’s Key Metric: Paid Churn
Bottom Line
24. Free Mobile App: Lines in the Sand
Mobile Downloads
Bottom Line
Mobile Download Size
Bottom Line
Mobile Customer Acquisition Cost
Bottom Line
Sincerely Learns the Challenges of Mobile Customer Acquisition Application Launch Rate
Bottom Line
Percent Active Mobile Users/Players
Bottom Line
Percentage of Mobile Users Who Pay
Bottom Line
Average Revenue Per Daily Active User
Bottom Line
Monthly Average Revenue Per Mobile User
Bottom Line
Average Revenue Per Paying User
Bottom Line
Mobile App Ratings Click-Through
Bottom Line
Mobile Customer Lifetime Value
25. Media Site: Lines in the Sand
Click-Through Rates
Bottom Line
Sessions-to-Clicks Ratio
Bottom Line
Referrers
Bottom Line
Engaged Time
Bottom Line
What Onsite Engagement Can Tell You About Goals and Behaviors Sharing with Others
Bottom Line
JFL Gags Cracks Up YouTube
26. User-Generated Content: Lines in the Sand
Content Upload Success
Bottom Line
Time on Site Per Day
Bottom Line
Reddit Part 1—From Links to a Community Engagement Funnel Changes
Bottom Line
Reddit Part 2—There’s Gold in Those Users Spam and Bad Content
Bottom Line
27. Two-Sided Marketplaces: Lines in the Sand
Transaction Size
Bottom Line
What Etsy Watches Top 10 Lists
Bottom Line
28. What to Do When You Don’t Have a Baseline
IV. Putting Lean Analytics to Work
29. Selling into Enterprise Markets
Why Are Enterprise Customers Different?
Big Ticket, High Touch Formality
Legacy Products
Incumbents Slower Cycle Time Rationality (and Lack of Imagination)
The Enterprise Startup Lifecycle
Inspiration Empathy: Consulting and Segmentation
How Coradiant Found a Market
Stickiness: Standardization and Integration Virality: Word of Mouth, Referrals, and References Revenue: Direct Sales and Support Scale: Channel Sales, Efficiencies, and Ecosystems
So What Metrics Matter?
Ease of Customer Engagement and Feedback Pipeline for Initial Releases, Betas, and Proof-of-Concept Trials Stickiness and Usability Integration Costs User Engagement Disentanglement Support Costs User Groups and Feedback Pitch Success Barriers to Exit
The Bottom Line: Startups Are Startups
30. Lean from Within: Intrapreneurs
Span of Control and the Railroads Skunk Works for Intrapreneurs Changing—or Innovating to Resist Change? Stars, Dogs, Cows, and Question Marks Swiffer Gives Up on Chemistry Doritos Chooses a Flavor Working with an Executive Sponsor EMI Embraces Data to Understand Its Customers The Stages of Intrapreneur Lean Analytics
Beforehand: Get Buy-in Empathy: Find Problems, Don’t Test Demand Skip the Business Case, Do the Analytics Stickiness: Know Your Real Minimum Viral from the Start Revenue Within the Ecosystem Scale and the Handoff
31. Conclusion: Beyond Startups
How to Instill a Culture of Data in Your Company
Start Small, Pick One Thing, and Show Value Make Sure Goals Are Clearly Understood Get Executive Buy-in Make Things Simple to Digest Ensure Transparency Don’t Eliminate Your Gut Ask Good Questions
A. References and Further Reading B. About the Authors C. The Lean Series Index About the Authors Copyright
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