SxSWi - Monday

Tuesday, March 11th, 2008 at 9:44 am

11:30AM: PANEL - Startup Metrics for Pirates: AARRR! Dave McClure (Master of 500 Hats), Ted Rheingold (Top Dog, Dogster Inc), Jia Shen (CTO, RockYou), Hiten Shah (Crazy Egg Inc), Todd Vernon (CEO, Lijit Networks, Inc). The panel discuss measuring your users and modifying as you go.

Five steps:

  1. Acquistion
  2. Activation
  3. Retention
  4. Referral
  5. Revenues

Which metrics should you focus on? Focus on critical few actionable metrics. If you don’t use metric to make a decision, it’s not actionable. PRODUCT: What to build? Build features that increase conversion. Wireframes = conversion steps. Marketing/sales: a. high volume, low cost, high conversion. Design and test multiple marketing channels and campings. Select and focus. Referral (viral promotion): Encourage referral after users have had a happy experience.

Dogster / Catster: Retention
Advertised with SEM. Tested keywords. Made landing page dynamic about where they came from. Did a promotion exclusive for DailyCandy. Started getting 2,000 registrations a day, but only 60% were activating. Changed registration path, got them up to 70%. New members cost $2, but only 8% of members were creating pet profiles. They found out most about dog and cat information. Looked at top 15 referrers (judging their quality). Used CrazyEgg with keywords. SEO: Keyword density. Added a lot of blogs for content. Tools they use: GA - bounce rate, filters, goals/funnels. CrazyEgg. SEO tools: Keyword density, spider simulator, search engine ranking tool.

legit: Activation
Signup for lijit — 15-20 minutes. 0.1% conversion rate. New process, automate almost everything. Use automation to remove over 95% of required taks. Make the process entertaining and a little mysterious. Create a situation where we reward the user at each step. Conversion went up to 4%. Scrape a user’s site. Sigup time went down to 2 minutes. “Easy to install” or “Took me only a few minutes.”

CrazyEgg: Activation and Retention
WeGame.com, ran crazyegg tests. “A lot more heat.” 40% increase in pageviews per visitor after design changes.

RockYou: Acquistion
Viral growth. Install flow (x = 5, y = 10%, viral factor = 5 x 0.1 = 0.5 viral) and engagement flow. Intall flow should generate most of your referrals: facebook, myspace have you invite your friends when you sign up. Engagement flows weaker than intall flows. Decay — invite rates decrease over time as you saturate. Acceptance rate decreases as you saturate. Engagement tends to decay.

References:

  • Influence: The Psychology of Persuasion by Robert Cialdini
  • Putting the Fun in Functional by Amy Jo Kim (Applying game mechanics to websites.)
  • Futuristic Play by Andrew Chen
  • Don’t Make Me Think by Steve Krug
  • A Theory of Fun by Raph Koster

Q&A:

  • Keep metrics simple if team is small, otherwise can be a rabbit hole
  • Engineers have to make tools immediately
  • McClure is very impressive.
  • Polyvore.com are making outfits. You can put together outfits from different sites.
  • StumbledUpon getting big, worth checking out
  • Focus mostly on e-mail marketing Subject lines to encourage open rates.

The panel’s deck is here: slideshare.net/dmc500hats. I highly recommend looking at it. This was the best talk after Tony from Zappos.

2:00PM: PANEL - Frank Warren (PostSecret) talks about how he has seen more secrets than any other human being. There is a basic human wisdom in the secrets. New media technologies allow the group to grow and reveal itself. Secrets have appeared in All American Rejects video. They strengthen the bond of intimacy.

Most Gratifying Moment
Received an e-mail from a suicide hotline, he couldn’t help, but he posted it on PostSecrets. The community raised $30K to save the hotline. Online communities can have an affect in the real world. Women have the most fascinating interior lives. They secrets are a way for people to “come out to themselves.” “When we keep a secret we feel alone and isolated, but when we see a community” of people, we can identify. “Free you secrets and become who you are.”

“The children most broken in the world become the adults most likely to change it.”

“All of us have a secret that would just break your heart.” “I hope that PostSecret will help to change the way we think about artists.” Frank’s father: “Hey Frank, you wanna know my secret.”

PostSecret has a brand, but it is not in the commercial realm.

Latest book: A Lifetime of Secrets by Frank Warren.

3:30PM: Bootstrapping 101: The Basic Building Blocks. Bijoy Goswami (CEO, Aviri), Danny Gutknecht (CEO, Inhouse Assist), Marcy Hoen (Founder, Austin Art Start), Jonathan McCoy (Founder, Perception Labs), Alex Cavalli (University of Texas…) talk their experience.

The true gaints of Silicon Valley were all bootstrappers (ie. Hewlitt Packard).

Three paths of Entrepreneurship

  1. Cookie cutter: franchising, duplication. People are repeting what’s already been done. Does not deliver innovation.
  2. Funding driven: Must go to an investor and have a conversation in the absence of the customer. It took Google 5+ years to figure out how to build Adsense and Adwords. What about Overture?
  3. Bootstrap: Use everything, demo/sell/build, dance with duality (have two conflicting things at a time and wait for a solution), constraint creates innovation, right action right time

Bootstrapping Ideation
What’s worth my time and why am I here? Do something that you love doing that people will pay you for. “Emerging product.” Product grows up with each iteration. The money comes from the customer.

Valley of Death
How do you use the resources you have? Optimize resources to stay alive. Building sustainable organization (growth, culture). Need to focus. Are you ready to build a sustainable organization? Are you ready to use everything within your power to move forward? Is your team committed? Fear can destroy you here. Put it aside. It’s paralyzing.

Growth
Build something of value. Growth can be dangerous. Extra resources must be re-invested. Make sure that within your tribe (internal) and your customer bsed you’re teaching your values and vision.

Awaken
The inner journey: something will be required of them. Change in thinking, operating, the world view. Company’s fail because entrepreneurs fail to grow. Shout: The Hero’s Journey by Joseph Campell “Know thy self.” You develop a committment to what you want to put into the world. Imagination and creativity. Hubris reduces your openness and flexibility.

Note that the panel did not mention creating a business plan, etc.

Q&A:

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