dan mc kinley_final
TRANSCRIPT
![Page 1: Dan mc kinley_final](https://reader036.vdocuments.us/reader036/viewer/2022062710/559ee7331a28abcb618b4586/html5/thumbnails/1.jpg)
Data Driven Done RightDan McKinley @mcfunley mcfunley.com
Lean Startup Conference -‐ San Francisco, CA December 10th, 2014
![Page 2: Dan mc kinley_final](https://reader036.vdocuments.us/reader036/viewer/2022062710/559ee7331a28abcb618b4586/html5/thumbnails/2.jpg)
IntroducHons
![Page 3: Dan mc kinley_final](https://reader036.vdocuments.us/reader036/viewer/2022062710/559ee7331a28abcb618b4586/html5/thumbnails/3.jpg)
![Page 4: Dan mc kinley_final](https://reader036.vdocuments.us/reader036/viewer/2022062710/559ee7331a28abcb618b4586/html5/thumbnails/4.jpg)
20072003
20141998
![Page 5: Dan mc kinley_final](https://reader036.vdocuments.us/reader036/viewer/2022062710/559ee7331a28abcb618b4586/html5/thumbnails/5.jpg)
20072003
20141998
![Page 6: Dan mc kinley_final](https://reader036.vdocuments.us/reader036/viewer/2022062710/559ee7331a28abcb618b4586/html5/thumbnails/6.jpg)
Handmade & vintage marketplace.
$1.3 Billion in Gross Sales in 2013.
600ish Employees.
![Page 7: Dan mc kinley_final](https://reader036.vdocuments.us/reader036/viewer/2022062710/559ee7331a28abcb618b4586/html5/thumbnails/7.jpg)
Less than 20 people in 2007.
![Page 8: Dan mc kinley_final](https://reader036.vdocuments.us/reader036/viewer/2022062710/559ee7331a28abcb618b4586/html5/thumbnails/8.jpg)
photo: Ian Norman on Flickr.
![Page 9: Dan mc kinley_final](https://reader036.vdocuments.us/reader036/viewer/2022062710/559ee7331a28abcb618b4586/html5/thumbnails/9.jpg)
“What do we build?”
photo: Wilhelm Joys Andersen on Flickr.
![Page 10: Dan mc kinley_final](https://reader036.vdocuments.us/reader036/viewer/2022062710/559ee7331a28abcb618b4586/html5/thumbnails/10.jpg)
“We should be data-‐driven.”
![Page 11: Dan mc kinley_final](https://reader036.vdocuments.us/reader036/viewer/2022062710/559ee7331a28abcb618b4586/html5/thumbnails/11.jpg)
We should be data driven.
This is data.
∴ we should be driven by this.
![Page 12: Dan mc kinley_final](https://reader036.vdocuments.us/reader036/viewer/2022062710/559ee7331a28abcb618b4586/html5/thumbnails/12.jpg)
Data-‐Driven PrioriHesThis is a thing that’s possible. !
I fell ass-‐backwards into learning a thing or two about it.
![Page 13: Dan mc kinley_final](https://reader036.vdocuments.us/reader036/viewer/2022062710/559ee7331a28abcb618b4586/html5/thumbnails/13.jpg)
War Stories
![Page 14: Dan mc kinley_final](https://reader036.vdocuments.us/reader036/viewer/2022062710/559ee7331a28abcb618b4586/html5/thumbnails/14.jpg)
In the Beginning
![Page 15: Dan mc kinley_final](https://reader036.vdocuments.us/reader036/viewer/2022062710/559ee7331a28abcb618b4586/html5/thumbnails/15.jpg)
Skateboard ramp demoli;on, 2007.
![Page 16: Dan mc kinley_final](https://reader036.vdocuments.us/reader036/viewer/2022062710/559ee7331a28abcb618b4586/html5/thumbnails/16.jpg)
![Page 17: Dan mc kinley_final](https://reader036.vdocuments.us/reader036/viewer/2022062710/559ee7331a28abcb618b4586/html5/thumbnails/17.jpg)
![Page 18: Dan mc kinley_final](https://reader036.vdocuments.us/reader036/viewer/2022062710/559ee7331a28abcb618b4586/html5/thumbnails/18.jpg)
Ideas that sound awesome are awesome.
-‐ Etsy product philosophy in the early days.
photo: srslyguys on Flickr.
![Page 19: Dan mc kinley_final](https://reader036.vdocuments.us/reader036/viewer/2022062710/559ee7331a28abcb618b4586/html5/thumbnails/19.jpg)
photo: JusDn Brockie on Flickr.
![Page 20: Dan mc kinley_final](https://reader036.vdocuments.us/reader036/viewer/2022062710/559ee7331a28abcb618b4586/html5/thumbnails/20.jpg)
Products in the Free-‐Growth Universe
(They RULE)
Released a thing
Released a thing
Released a thing
Oh man that thing we released, I tell you what
![Page 21: Dan mc kinley_final](https://reader036.vdocuments.us/reader036/viewer/2022062710/559ee7331a28abcb618b4586/html5/thumbnails/21.jpg)
Pimply, Awkward Company
![Page 22: Dan mc kinley_final](https://reader036.vdocuments.us/reader036/viewer/2022062710/559ee7331a28abcb618b4586/html5/thumbnails/22.jpg)
Product Release Plan1. Build feature.
2. Rent warehouse for launch party.
3. Release feature.
4. Launch party.
5.Wait 20 months.
6. Delete feature for lack of usage.photo: James Willamor on flickr.
![Page 23: Dan mc kinley_final](https://reader036.vdocuments.us/reader036/viewer/2022062710/559ee7331a28abcb618b4586/html5/thumbnails/23.jpg)
2008
![Page 24: Dan mc kinley_final](https://reader036.vdocuments.us/reader036/viewer/2022062710/559ee7331a28abcb618b4586/html5/thumbnails/24.jpg)
2011
![Page 25: Dan mc kinley_final](https://reader036.vdocuments.us/reader036/viewer/2022062710/559ee7331a28abcb618b4586/html5/thumbnails/25.jpg)
A/B tesHng: a soluHon?
![Page 26: Dan mc kinley_final](https://reader036.vdocuments.us/reader036/viewer/2022062710/559ee7331a28abcb618b4586/html5/thumbnails/26.jpg)
![Page 27: Dan mc kinley_final](https://reader036.vdocuments.us/reader036/viewer/2022062710/559ee7331a28abcb618b4586/html5/thumbnails/27.jpg)
Product selecHon: sHll “coolest idea.”
photo: nanpalmero on Flickr.
![Page 28: Dan mc kinley_final](https://reader036.vdocuments.us/reader036/viewer/2022062710/559ee7331a28abcb618b4586/html5/thumbnails/28.jpg)
photo: nanpalmero on Flickr.
Product selecHon: sHll “coolest idea.”
But the measurement had changed!
photo: masterpunk.etsy.com
![Page 29: Dan mc kinley_final](https://reader036.vdocuments.us/reader036/viewer/2022062710/559ee7331a28abcb618b4586/html5/thumbnails/29.jpg)
photo: ketrin1407 on Flickr.
“Only Hope stayed under the rim of the jar.”
![Page 30: Dan mc kinley_final](https://reader036.vdocuments.us/reader036/viewer/2022062710/559ee7331a28abcb618b4586/html5/thumbnails/30.jpg)
Something that Actually Started to Work
![Page 31: Dan mc kinley_final](https://reader036.vdocuments.us/reader036/viewer/2022062710/559ee7331a28abcb618b4586/html5/thumbnails/31.jpg)
TimeIdea
Code
Release
2005
![Page 32: Dan mc kinley_final](https://reader036.vdocuments.us/reader036/viewer/2022062710/559ee7331a28abcb618b4586/html5/thumbnails/32.jpg)
Idea
Code
Release
Idea
Code
A/B testRelease?
2005 2010
![Page 33: Dan mc kinley_final](https://reader036.vdocuments.us/reader036/viewer/2022062710/559ee7331a28abcb618b4586/html5/thumbnails/33.jpg)
“Oh, crap”
Idea
Code
Release
Idea
Code
A/B test
Release?
2005 2010
![Page 34: Dan mc kinley_final](https://reader036.vdocuments.us/reader036/viewer/2022062710/559ee7331a28abcb618b4586/html5/thumbnails/34.jpg)
Wasted effort (maybe).
THE HELL WITH IT!
Idea
Code
Release
Idea
Code
A/B test
Release?
2005 2010
![Page 35: Dan mc kinley_final](https://reader036.vdocuments.us/reader036/viewer/2022062710/559ee7331a28abcb618b4586/html5/thumbnails/35.jpg)
Idea
Code
Release
Idea
Code
A/B test
Release?
IdeaValidatePrototype
A/B Test
Refinement
A/B test
Release
2005 2010 2012
![Page 36: Dan mc kinley_final](https://reader036.vdocuments.us/reader036/viewer/2022062710/559ee7331a28abcb618b4586/html5/thumbnails/36.jpg)
Use data here.Idea
Code
Release
Idea
Code
A/B test
Release?
IdeaValidatePrototype
A/B Test
Refinement
A/B test
Release
2005 2010 2012
![Page 37: Dan mc kinley_final](https://reader036.vdocuments.us/reader036/viewer/2022062710/559ee7331a28abcb618b4586/html5/thumbnails/37.jpg)
Idea
Code
Release
Idea
Code
A/B test
Release?
IdeaValidatePrototype
A/B Test
Refinement
A/B test
Release
2005 2010 2012
Possibly quite crappy.
![Page 38: Dan mc kinley_final](https://reader036.vdocuments.us/reader036/viewer/2022062710/559ee7331a28abcb618b4586/html5/thumbnails/38.jpg)
Made less crappy here.
Idea
Code
Release
Idea
Code
A/B test
Release?
IdeaValidatePrototype
A/B Test
Refinement
A/B test
Release
2005 2010 2012
Possibly quite crappy.
![Page 39: Dan mc kinley_final](https://reader036.vdocuments.us/reader036/viewer/2022062710/559ee7331a28abcb618b4586/html5/thumbnails/39.jpg)
Idea
Code
Release
Idea
Code
A/B test
Release?
IdeaValidatePrototype
A/B Test
Refinement
A/B test
Release
2005 2010 2012
Maybe give up.
Maybe give up (hopefully not).
Maybe give up.
![Page 40: Dan mc kinley_final](https://reader036.vdocuments.us/reader036/viewer/2022062710/559ee7331a28abcb618b4586/html5/thumbnails/40.jpg)
Examples
![Page 41: Dan mc kinley_final](https://reader036.vdocuments.us/reader036/viewer/2022062710/559ee7331a28abcb618b4586/html5/thumbnails/41.jpg)
Here are two real ideas.Neither should sound completely nuts.
photo: machineisorganic on Flickr.
![Page 42: Dan mc kinley_final](https://reader036.vdocuments.us/reader036/viewer/2022062710/559ee7331a28abcb618b4586/html5/thumbnails/42.jpg)
Idea #1 Let’s build a landing page for local furniture.
![Page 43: Dan mc kinley_final](https://reader036.vdocuments.us/reader036/viewer/2022062710/559ee7331a28abcb618b4586/html5/thumbnails/43.jpg)
![Page 44: Dan mc kinley_final](https://reader036.vdocuments.us/reader036/viewer/2022062710/559ee7331a28abcb618b4586/html5/thumbnails/44.jpg)
Step 1: Who would see it?
![Page 45: Dan mc kinley_final](https://reader036.vdocuments.us/reader036/viewer/2022062710/559ee7331a28abcb618b4586/html5/thumbnails/45.jpg)
Lis$ng
Search
Shop
Home
Other
“A significant fracDon”
Traffic
Percen
t (%)
Browse
![Page 46: Dan mc kinley_final](https://reader036.vdocuments.us/reader036/viewer/2022062710/559ee7331a28abcb618b4586/html5/thumbnails/46.jpg)
Lis$ng
Search
Shop
Home
Other
Traffic
Furniture
Percen
t (%)
Browse
![Page 47: Dan mc kinley_final](https://reader036.vdocuments.us/reader036/viewer/2022062710/559ee7331a28abcb618b4586/html5/thumbnails/47.jpg)
Lis?ng
Search
Shop
Home
Other
Not a significant fracDon.
TrafficItems soldPe
rcen
t (%)
Browse
![Page 48: Dan mc kinley_final](https://reader036.vdocuments.us/reader036/viewer/2022062710/559ee7331a28abcb618b4586/html5/thumbnails/48.jpg)
![Page 49: Dan mc kinley_final](https://reader036.vdocuments.us/reader036/viewer/2022062710/559ee7331a28abcb618b4586/html5/thumbnails/49.jpg)
Step 2: What would change imply?
![Page 50: Dan mc kinley_final](https://reader036.vdocuments.us/reader036/viewer/2022062710/559ee7331a28abcb618b4586/html5/thumbnails/50.jpg)
visits × conversion rate × order value × liH ≈ ?
![Page 51: Dan mc kinley_final](https://reader036.vdocuments.us/reader036/viewer/2022062710/559ee7331a28abcb618b4586/html5/thumbnails/51.jpg)
visits × conversion rate × order value × liH ≈ ? Es#mated Modeled
![Page 52: Dan mc kinley_final](https://reader036.vdocuments.us/reader036/viewer/2022062710/559ee7331a28abcb618b4586/html5/thumbnails/52.jpg)
50K × 0.25% × $400 × lig ≈ ?
(fake numbers, by the way)
$0
$125,000
$250,000
$375,000
$500,000
+0.5%?
+1%?
+2%?
One Year
![Page 53: Dan mc kinley_final](https://reader036.vdocuments.us/reader036/viewer/2022062710/559ee7331a28abcb618b4586/html5/thumbnails/53.jpg)
50K × 0.25% × $400 × lig ≈ ?
$0
$125,000
$250,000
$375,000
$500,000
+0.5%?
+1%?
+2%?
One Year(fake numbers, by the way)
![Page 54: Dan mc kinley_final](https://reader036.vdocuments.us/reader036/viewer/2022062710/559ee7331a28abcb618b4586/html5/thumbnails/54.jpg)
50K × 0.25% × $400 × lig ≈ ?
$0
$125,000
$250,000
$375,000
$500,000
+0.5%?
+1%?
+2% ≈ $360,000
(fake numbers, by the way)
One Year
![Page 55: Dan mc kinley_final](https://reader036.vdocuments.us/reader036/viewer/2022062710/559ee7331a28abcb618b4586/html5/thumbnails/55.jpg)
$0
$125,000
$250,000
$375,000
$500,000
$360,000
$13K (our cut)
50K × 0.25% × $400 × lig ≈ ?
(fake numbers, by the way)
One Year
![Page 56: Dan mc kinley_final](https://reader036.vdocuments.us/reader036/viewer/2022062710/559ee7331a28abcb618b4586/html5/thumbnails/56.jpg)
Verdict: Let’s do something else.
![Page 57: Dan mc kinley_final](https://reader036.vdocuments.us/reader036/viewer/2022062710/559ee7331a28abcb618b4586/html5/thumbnails/57.jpg)
Idea #2 Let’s email people that give up in the
middle of purchases.
![Page 58: Dan mc kinley_final](https://reader036.vdocuments.us/reader036/viewer/2022062710/559ee7331a28abcb618b4586/html5/thumbnails/58.jpg)
![Page 59: Dan mc kinley_final](https://reader036.vdocuments.us/reader036/viewer/2022062710/559ee7331a28abcb618b4586/html5/thumbnails/59.jpg)
users × order value × resurrec?on rate ≈ ?
![Page 60: Dan mc kinley_final](https://reader036.vdocuments.us/reader036/viewer/2022062710/559ee7331a28abcb618b4586/html5/thumbnails/60.jpg)
20K × $40 × resurrecHon rate ≈ ?
$0
$5,000,000
$10,000,000
$15,000,000
$20,000,000
+1%?
+2%?
+5%?
One Year(fake numbers, again)
![Page 61: Dan mc kinley_final](https://reader036.vdocuments.us/reader036/viewer/2022062710/559ee7331a28abcb618b4586/html5/thumbnails/61.jpg)
20K × $40 × resurrecHon rate ≈ ?
$0
$5,000,000
$10,000,000
$15,000,000
$20,000,000
+1%?
+2%?
+5%?
One Year(fake numbers, again)
![Page 62: Dan mc kinley_final](https://reader036.vdocuments.us/reader036/viewer/2022062710/559ee7331a28abcb618b4586/html5/thumbnails/62.jpg)
20K × $40 × resurrecHon rate ≈ ?
$0
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$3,000,000!
One Year(fake numbers, again)
![Page 63: Dan mc kinley_final](https://reader036.vdocuments.us/reader036/viewer/2022062710/559ee7331a28abcb618b4586/html5/thumbnails/63.jpg)
$0
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$3,000,000
20K × $40 × resurrec?on rate × 3.5% ≈ ?
$100K! (our cut)(fake numbers, again)
One Year
![Page 64: Dan mc kinley_final](https://reader036.vdocuments.us/reader036/viewer/2022062710/559ee7331a28abcb618b4586/html5/thumbnails/64.jpg)
Verdict: Let’s build it!
![Page 65: Dan mc kinley_final](https://reader036.vdocuments.us/reader036/viewer/2022062710/559ee7331a28abcb618b4586/html5/thumbnails/65.jpg)
Other
Abributed Source of Etsy’s Sales
My email (epic)
![Page 66: Dan mc kinley_final](https://reader036.vdocuments.us/reader036/viewer/2022062710/559ee7331a28abcb618b4586/html5/thumbnails/66.jpg)
Systemic improvement through basic arithmeHc!
![Page 67: Dan mc kinley_final](https://reader036.vdocuments.us/reader036/viewer/2022062710/559ee7331a28abcb618b4586/html5/thumbnails/67.jpg)
GeneralizaHons
![Page 68: Dan mc kinley_final](https://reader036.vdocuments.us/reader036/viewer/2022062710/559ee7331a28abcb618b4586/html5/thumbnails/68.jpg)
![Page 69: Dan mc kinley_final](https://reader036.vdocuments.us/reader036/viewer/2022062710/559ee7331a28abcb618b4586/html5/thumbnails/69.jpg)
Who? !
How many?
![Page 70: Dan mc kinley_final](https://reader036.vdocuments.us/reader036/viewer/2022062710/559ee7331a28abcb618b4586/html5/thumbnails/70.jpg)
Close is good enough.
![Page 71: Dan mc kinley_final](https://reader036.vdocuments.us/reader036/viewer/2022062710/559ee7331a28abcb618b4586/html5/thumbnails/71.jpg)
YMMV
![Page 72: Dan mc kinley_final](https://reader036.vdocuments.us/reader036/viewer/2022062710/559ee7331a28abcb618b4586/html5/thumbnails/72.jpg)
Startup Mature Company
Moonshots Strategic Projects Vebed OpportuniDes
h/t Marc Hedlund
![Page 73: Dan mc kinley_final](https://reader036.vdocuments.us/reader036/viewer/2022062710/559ee7331a28abcb618b4586/html5/thumbnails/73.jpg)
Conclusions
![Page 74: Dan mc kinley_final](https://reader036.vdocuments.us/reader036/viewer/2022062710/559ee7331a28abcb618b4586/html5/thumbnails/74.jpg)
“What do we build?”
photo: Wilhelm Joys Andersen on Flickr.
![Page 75: Dan mc kinley_final](https://reader036.vdocuments.us/reader036/viewer/2022062710/559ee7331a28abcb618b4586/html5/thumbnails/75.jpg)
Many product ideas sound awesome.
photo: mindonfire on Flickr.
![Page 76: Dan mc kinley_final](https://reader036.vdocuments.us/reader036/viewer/2022062710/559ee7331a28abcb618b4586/html5/thumbnails/76.jpg)
“Upon what meat doth this our Caesar feed, that he is
grown so great?”
![Page 77: Dan mc kinley_final](https://reader036.vdocuments.us/reader036/viewer/2022062710/559ee7331a28abcb618b4586/html5/thumbnails/77.jpg)
“He who refuses to do arithme;c is doomed to talk nonsense.”
-‐ John McCarthy
![Page 78: Dan mc kinley_final](https://reader036.vdocuments.us/reader036/viewer/2022062710/559ee7331a28abcb618b4586/html5/thumbnails/78.jpg)
[email protected] mcfunley.com @mcfunley