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A/B Testing Dan Siroker Co-Founder & CEO If data can help win elections, what can it help you do for your business?

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Dan Siroker's presentation at Business of Software 2013 about the universal startup algorithm and how to apply lessons learned from the 2008 Obama campaign and 5,000 Optimizely customers who have run over 300,000 experiments.

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Page 1: Business of Software 2013: A/B Testing - If data can help win elections, what can it help you do for your business?

A/B Testing

Dan SirokerCo-Founder & CEO

If data can help win elections, what can it help you do for your business?

Page 2: Business of Software 2013: A/B Testing - If data can help win elections, what can it help you do for your business?

‘05‘06‘07‘08’09’10

Page 3: Business of Software 2013: A/B Testing - If data can help win elections, what can it help you do for your business?
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Page 7: Business of Software 2013: A/B Testing - If data can help win elections, what can it help you do for your business?
Page 8: Business of Software 2013: A/B Testing - If data can help win elections, what can it help you do for your business?

‘05‘06‘07‘08’09’10

Page 9: Business of Software 2013: A/B Testing - If data can help win elections, what can it help you do for your business?

$0

$1

$2

$3

$4

$5

$6

$7

2010 Q1

Q2 Q3 Q4 2011 Q1

Q2 Q3 Q4 2012 Q1

Q2 Q3 Q4

Mill

ion

s

Page 10: Business of Software 2013: A/B Testing - If data can help win elections, what can it help you do for your business?

$0

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$7

2010 Q1

Q2 Q3 Q4 2011 Q1

Q2 Q3 Q4 2012 Q1

Q2 Q3 Q4

Mill

ion

s

Dan

Pete Eric Elliot

Team: 4Customers: 644

Annual Run Rate: $0.1m

Page 11: Business of Software 2013: A/B Testing - If data can help win elections, what can it help you do for your business?

$0

$1

$2

$3

$4

$5

$6

$7

2010 Q1

Q2 Q3 Q4 2011 Q1

Q2 Q3 Q4 2012 Q1

Q2 Q3 Q4

Mill

ion

s

Dan

Pete Eric Elliot

Ricky

Jeff P

Team: 10 (+150%)Customers: 1,508 (+134%)

Annual Run Rate: $1.2m(+982%)

Ryan M

Mat

Meng Xiao

Julio

Page 12: Business of Software 2013: A/B Testing - If data can help win elections, what can it help you do for your business?

$0

$1

$2

$3

$4

$5

$6

$7

2010 Q1

Q2 Q3 Q4 2011 Q1

Q2 Q3 Q4 2012 Q1

Q2 Q3 Q4

Mill

ion

s

Dan

Pete Eric Elliot

Ricky

Jeff P

Ryan M

Mat

Meng Xiao

Julio

Sonesh

Mik

Jodie

Sandy

Brendan

Tommy

Dogan

Tyle

Arthu

Greg

Alan

Cara

Cristian

Lauren

Katy

Ryan L

Dae-Ho

Ian

Steve

Jeff Z

Amina

Byron

Shanann

Dan G

Sophie

Jon

Joanna

Jonathan

Travis

Ashley

Cyrus

Eddie

Team: 42 (+320%)Customers: 3,460 (+129%)

Annual Run Rate: $7.6m (+533%)

Page 13: Business of Software 2013: A/B Testing - If data can help win elections, what can it help you do for your business?

$0

$1

$2

$3

$4

$5

$6

$7

2010 Q1

Q2 Q3 Q4 2011 Q1

Q2 Q3 Q4 2012 Q1

Q2 Q3 Q4

Mill

ion

s

Page 14: Business of Software 2013: A/B Testing - If data can help win elections, what can it help you do for your business?

$0

$1

$2

$3

$4

$5

$6

$7

2010 Q1

Q2 Q3 Q4 2011 Q1

Q2 Q3 Q4 2012 Q1

Q2 Q3 Q4

Million

s

Page 15: Business of Software 2013: A/B Testing - If data can help win elections, what can it help you do for your business?

$0 $1 $2 $3 $4 $5 $6 $7 $8 $9

$10 $11 $12 $13 $14 $15 $16 $17 $18 $19

$20 $21 $22 $23 $24 $25 $26 $27 $28

2010 Q1

Q2 Q3 Q4 2011 Q1

Q2 Q3 Q4 2012 Q1

Q2 Q3 Q4 2013 Q1

Q2 Q3 Q4

Mill

ion

s

Actual Projection

Page 16: Business of Software 2013: A/B Testing - If data can help win elections, what can it help you do for your business?

$0 $1 $2 $3 $4 $5 $6 $7 $8 $9

$10 $11 $12 $13 $14 $15 $16 $17 $18 $19

$20 $21 $22 $23 $24 $25 $26 $27 $28

2010 Q1

Q2 Q3 Q4 2011 Q1

Q2 Q3 Q4 2012 Q1

Q2 Q3 Q4 2013 Q1

Q2 Q3 Q4

Mill

ion

s

Actual Projection

Cyrus

Eddie

Dan

Pete Eric Elliot

Ricky

Jeff P

Ryan M

Mat Meng XiaoJulio

Sonesh

Mik

Jodie

Sandy

Brendan

Tommy

Dogan

Tyle

Arthu

Greg

Alan

Cara

Cristian

Lauren

Katy

Ryan L

Dae-Ho

Ian

Steve

Jeff Z

Amina

Byron

Shanann

Dan G

Sophie

Jon

Joanna

Jonathan

Travis

Ashley

Team: 42

Page 17: Business of Software 2013: A/B Testing - If data can help win elections, what can it help you do for your business?

$0 $1 $2 $3 $4 $5 $6 $7 $8 $9

$10 $11 $12 $13 $14 $15 $16 $17 $18 $19

$20 $21 $22 $23 $24 $25 $26 $27 $28

2010 Q1

Q2 Q3 Q4 2011 Q1

Q2 Q3 Q4 2012 Q1

Q2 Q3 Q4 2013 Q1

Q2 Q3 Q4

Mill

ion

s

Actual Projection

Cyrus

Eddie

Dan

Pete Eric Elliot

Ricky

Jeff P

Ryan M

Mat Meng XiaoJulio

Sonesh

Mik

Jodie

Sandy

Brendan

Tommy

Dogan

Tyle

Arthu

Greg

Alan

Cara

Cristian

Lauren

Katy

Ryan L

Dae-Ho

Ian

Steve

Jeff Z

Amina

Byron

Shanann

Dan G

Sophie

Jon

Joanna

Jonathan

Travis

Ashley

Bo

Lisa

Miyo

Robin

James

David

Marius

Steve

Brian

Amelia

Luke

Adam

Adrian

Bradley

Brett

Jen

Ash

Richar

Lucas

Aaron

Gary

Etienne

Andrea

Neha

Chrix

Nick

Nick

Chris

Jamie

Helen

Tammie

Evan

Grace

Benson

Westly

Marco

Daniel

Kasra

Omari

Eric

Mustafa

Waylon

Fabian

Cate

Saum

Khattaab

Junan

Anshu

Bryce

Lacy

Natarajan

Katie

Andy

Ranjit

Grant

SG

Andy

Pedro

Danielle

Tai

Laura

Darwish

Amanda

Nikhil

Ryan

Hemant

Megan

Oren

Courtney

Kent

Ural

Toby

Oliver

Julia

Jaron

Jonathan

Adam

Asia

Pamela

Martjin

Ben

Becca

Michael

Christop

Dan

Eduar

Yonat

Chris

Chris

Rama

Team: 130 (+210%)

Page 18: Business of Software 2013: A/B Testing - If data can help win elections, what can it help you do for your business?
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How?

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Page 26: Business of Software 2013: A/B Testing - If data can help win elections, what can it help you do for your business?

Limited Life Experience

Page 27: Business of Software 2013: A/B Testing - If data can help win elections, what can it help you do for your business?

Limited Life Experience+

Overgeneralization

Page 28: Business of Software 2013: A/B Testing - If data can help win elections, what can it help you do for your business?

Limited Life Experience+

Overgeneralization=

Advice-Paul Buchheit

Page 29: Business of Software 2013: A/B Testing - If data can help win elections, what can it help you do for your business?

Lesson #1:

Define success.

Page 30: Business of Software 2013: A/B Testing - If data can help win elections, what can it help you do for your business?

Lesson #1:

Define success .

Page 31: Business of Software 2013: A/B Testing - If data can help win elections, what can it help you do for your business?

Lesson #1:

Define quantifiable success metrics.

Page 32: Business of Software 2013: A/B Testing - If data can help win elections, what can it help you do for your business?

Visitvisitors per day

Emailsign up

rate$

$ per recipient

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Visit Email $sign up

rate $ per recipientvisitors per day

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Media

Button

Page 35: Business of Software 2013: A/B Testing - If data can help win elections, what can it help you do for your business?
Page 36: Business of Software 2013: A/B Testing - If data can help win elections, what can it help you do for your business?

Button:

1. Sign Up

2. Learn More

3. Join Us Now

4. Sign Up Now

Media:

1. Get Involved Image

2. Family Image

3. Change Image

4. Barack’s Video

5. Springfield Video

6. Sam’s Video

Splash page experimentVariations:

Page 37: Business of Software 2013: A/B Testing - If data can help win elections, what can it help you do for your business?

Button: “Sign Up”

Page 38: Business of Software 2013: A/B Testing - If data can help win elections, what can it help you do for your business?

Button: “Learn More”

Page 39: Business of Software 2013: A/B Testing - If data can help win elections, what can it help you do for your business?

Button: “Join Us Now”

Page 40: Business of Software 2013: A/B Testing - If data can help win elections, what can it help you do for your business?

Button: “Sign Up Now”

Page 41: Business of Software 2013: A/B Testing - If data can help win elections, what can it help you do for your business?

Button:

1. Sign Up

2. Learn More

3. Join Us Now

4. Sign Up Now

Media:

1. Get Involved Image

2. Family Image

3. Change Image

4. Barack’s Video

5. Springfield Video

6. Sam’s Video

Variations:

Splash page experiment

Page 42: Business of Software 2013: A/B Testing - If data can help win elections, what can it help you do for your business?

Media: “Get Involved”

Page 43: Business of Software 2013: A/B Testing - If data can help win elections, what can it help you do for your business?

Media: “Family”

Page 44: Business of Software 2013: A/B Testing - If data can help win elections, what can it help you do for your business?

Media: “Change”

Page 45: Business of Software 2013: A/B Testing - If data can help win elections, what can it help you do for your business?

Media: “Barack’s Video”

Page 46: Business of Software 2013: A/B Testing - If data can help win elections, what can it help you do for your business?

Media: “Springfield Video”

Page 47: Business of Software 2013: A/B Testing - If data can help win elections, what can it help you do for your business?

Media: “Sam’s Video”

Page 48: Business of Software 2013: A/B Testing - If data can help win elections, what can it help you do for your business?

Button:

1. Sign Up

2. Learn More

3. Join Us Now

4. Sign Up Now

Media:

1. Get Involved Image

2. Family Image

3. Change Image

4. Barack’s Video

5. Springfield Video

6. Sam’s Video

Variations:

Splash page experiment

Page 49: Business of Software 2013: A/B Testing - If data can help win elections, what can it help you do for your business?

Splash page experiment

Page 50: Business of Software 2013: A/B Testing - If data can help win elections, what can it help you do for your business?

Splash page experiment

Page 51: Business of Software 2013: A/B Testing - If data can help win elections, what can it help you do for your business?

Splash page experiment

Page 52: Business of Software 2013: A/B Testing - If data can help win elections, what can it help you do for your business?

Email Subscriptions Volunteers Amount

Raised

Original: 7,120,000 712,000 $143,000,000

+40.6% +2,880,000 +288,000 +$57,000,000

New: 10,000,000 1,000,000 $200,000,000

Splash page experiment

Page 53: Business of Software 2013: A/B Testing - If data can help win elections, what can it help you do for your business?

Email Subscriptions Volunteers Amount

Raised

Original: 7,120,000 712,000 $143,000,000

+40.6% +2,880,000 +288,000 +$57,000,000

New: 10,000,000 1,000,000 $200,000,000

Splash page experiment

Page 54: Business of Software 2013: A/B Testing - If data can help win elections, what can it help you do for your business?

Email Subscriptions Volunteers Amount

Raised

Original: 7,120,000 712,000 $143,000,000

+40.6% +2,880,000 +288,000 +$57,000,000

New: 10,000,000 1,000,000 $200,000,000

Splash page experiment

Page 55: Business of Software 2013: A/B Testing - If data can help win elections, what can it help you do for your business?

Lesson #1:

Define quantifiable success metrics.

Page 56: Business of Software 2013: A/B Testing - If data can help win elections, what can it help you do for your business?

Lesson #2:

Less is more. Reduce choices.

Page 57: Business of Software 2013: A/B Testing - If data can help win elections, what can it help you do for your business?

vs.

+15% conversion rate

+10% $ per visitor

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vs.

+20% submissions

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vs.

+16.8% $ per visitor

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vs.

+43.8% purchases

Page 61: Business of Software 2013: A/B Testing - If data can help win elections, what can it help you do for your business?

Lesson #2:

Less is more. Reduce choices.

Page 62: Business of Software 2013: A/B Testing - If data can help win elections, what can it help you do for your business?

Lesson #3:

Words matter. Focus on your call to action.

Page 63: Business of Software 2013: A/B Testing - If data can help win elections, what can it help you do for your business?

Donation button experiment

Variations

Page 64: Business of Software 2013: A/B Testing - If data can help win elections, what can it help you do for your business?

Donation button experiment

VariationsNever

Signed UpSigned Up,

Never DonatedPreviously Donated

0.0% 0.0% 0.0%+2.3% +27.8% +16.3%-27.8% N/A N/A+15.2% -24.6% +11.9%+8.5% +2.9% +18.4%

Page 65: Business of Software 2013: A/B Testing - If data can help win elections, what can it help you do for your business?

vs.

+14.6% clicks

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vs.+15.75% $ per visitor

Page 67: Business of Software 2013: A/B Testing - If data can help win elections, what can it help you do for your business?

Lesson #3:

Words matter. Focus on your call to action.

Page 68: Business of Software 2013: A/B Testing - If data can help win elections, what can it help you do for your business?

Lesson #4:

Seek the global maximum.

Page 69: Business of Software 2013: A/B Testing - If data can help win elections, what can it help you do for your business?

Source: http://blog.intercom.io/criticism-and-two-way-streets/

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vs.

Page 72: Business of Software 2013: A/B Testing - If data can help win elections, what can it help you do for your business?
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vs.

+0.5% retention+1.4% engagement

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vs.

+600% engagement

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vs.

+49% conversion rate from 240 A/B tests

Page 77: Business of Software 2013: A/B Testing - If data can help win elections, what can it help you do for your business?

Lesson #4:

Seek the global maximum.

Page 78: Business of Software 2013: A/B Testing - If data can help win elections, what can it help you do for your business?

Lesson #5:

Start today.

Page 79: Business of Software 2013: A/B Testing - If data can help win elections, what can it help you do for your business?
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Source: http://techcrunch.com/2013/04/10/optimizely-series-a/

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Source: http://techcrunch.com/2013/04/10/optimizely-series-a/

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5,000+ Happy Customers!

Page 85: Business of Software 2013: A/B Testing - If data can help win elections, what can it help you do for your business?

Lesson #5:

Start today.

Page 86: Business of Software 2013: A/B Testing - If data can help win elections, what can it help you do for your business?

1. Define quantifiable success metrics.

2. Less is more. Reduce choices.

3. Words matter. Focus on your call to action.

4. Seek the global maximum.

5. Start today.

Lessons Learned

Page 87: Business of Software 2013: A/B Testing - If data can help win elections, what can it help you do for your business?

One more thing...

Page 88: Business of Software 2013: A/B Testing - If data can help win elections, what can it help you do for your business?
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A/B Testing

Dan SirokerCo-Founder & CEO

If data can help win elections, what can it help you do for your business?