Download - [500DISTRO] Measuring for SaaS Monetization: Choosing Metrics, Running Experiments & Deciding When To Charge

Growth, Engagement & Monetization @ DropboxJean-Denis Greze

@jgreze

Jean-Denis Greze (@jgreze)

OutlinePart I: What is growth?

Part II: Metrics

Part III: Growth & engagement in practice

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Part I: What is growth?Process or product

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At a minimum… Getting people to your page

A great logged-out experience

Signup

On-boarding

Engagement & Retention*

Virality

* pre-condition (but LinkedIn)

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Growth = data driven It’s just an approach to solving problems that should permeate all of your decisions

Warning: as you growth, you need an increasingly strong advocate for the data-driven approach. That’s your growth team.


Growth v. product: avoid holy wars

At Dropbox, extremes on both sides

Growth v1: pure bizops, number crunching, optimized parts of the funnel but never changed the experience as a whole

Growth v2: design something “perfect” that resonated well during user studies but not worried about numbers

Monetization got it right (Team Ca$h, Prowth)


Don’t think smallDon’t just reduce steps / friction

Don’t forget that there are fundamental human problems to people understanding, seeing a need for, coming back to, and adopting your product into their daily lives.


Understanding the user journey

Acquisition

Activation*

Engagement

Virality

* Don’t forget me


ViralityVirality that drives growth

Users bringing in non-users

Virality that drives engagement

Users bringing in other existing users

Think about this stuff from day 1: it’s hard to add vitality after-the-fact

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Part II: MetricsWhat to measure > how to measure


MetricsBe way of *AU (DAU, WAU, MAU, 3MAU)

You have different kinds of active users (e.g., sync users v. backup users)

Activity is a means to an end — what is your business model?

Measure activation

Facebook’s “7 friends in 10 days”

Figure out the highest predictors of retention

Signin up != active


Actually, why metrics?Obvious: goals to aim for

Less obvious: communication (makes it easy to explain what you are going to VCs, the rest of your organization, etc.)


Revisit your metrics oftenExamples

Two sharing models at Dropbox

Email subject lines

Referral at Dropbox

If you don’t always pay attention, you will make bad product decisions

Ask yourself: “Is the funnel I am looking at the real and current funnel?”


$aaS (I)Should growth look at metrics through monetization?

No (maybe?)

Dropbox example: free space as cost

Free users as happy people deriving benefit

Free users as cost-center

Free users as potential self-serve revenue

Free users as qualified leads (sales)

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$aaS (II) Monetization like growth is data-driven, but it’s purview is turning existing users into paying users


A/B testing (I)One rule: statistical significance is hard (you don’t have enough exposures)

When you are a startup, go for big wins and don’t worry about small optimizations: they won’t be the difference between a sustainable startup and a failing one


A/B testing (II)A/B tests do not understand your users

“With this variant, a user is more likely to click on X”

You don’t know “why” or “what the user is thinking”

If you want to understand your users (a little bit), conduct user research

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Part III: Growth & engagement in practice

Somewhat applicable advice


Easy v. difficult (anecdotal)Hard

Reactivating dormant users

Making your product awesome by changing a button color

Easy

Going from nothing to something

No onboarding to onboarding

No email reminders to email reminders (or notifications)

Focusing on channels that are already doing well and bringing in high-value AUs


Virality templates (I)Big splash

Dropbox space race

NYTimes dialect quiz

Trade your product for “shares” (i.e., the Dropbox model)

Referrals -> free space

E.g., Uber


Virality templates (II)Achievements

Broadcast something that makes your user look good or interesting

E.g., Foursquare, fitness apps

Caveat: Signing up is not an achievement


Virality templates (III)Network building

E.g., Facebook, WhatsApp

If you have this… I’d love to invest

Pro-tip: your users’ phone contacts / address book is the best way to kickstart this

Only takes 1 permission, cost to you is small (SMS / user), no one controls it (yet)

Network riding (e.g., Airbnb, Instagram & Twitter)


Virality templates (IV)Word of mouth

Content

SEO

Partnerships

E.g., Chrome (really?)


Progressive engagementActivity & quality

Activity: 3MAU to MAU or MAU to WAU

Quality: MAU -> high-value MAU

E.g., reminder to get users to complete actions

People forget what they are doing

E.g., have one set of users re-engage another set

Tip: opt-in beta program


Growth & freemium$aaS: Cost of giving your product for free v.

Ads, outbound sales, paid-for leads, partnerships

It’s not just self-serve!

Freemium for growth:

Trade for vitality (shares)

Trade for better UX (address book makes it easier for your users to share in the future)

Trade for a better product (upload all of your photos makes albums better)


Gating freemiumWhen do you break things and ask people to pay you?

Usage (e.g., space)

Social (# of people you are collaborating with)

Content type (Word v. Excel)

Functionality for subset of users (e.g., IT)

Make sure the subset has purchasing power

Time-bounded

Experiment early (you can have multiple gates)


Parting adviceEvery company/situation is different

Be wary of learning specific lessons from Dropbox, Google, Square, Github, etc.

We may be optimizing for very different things

We may not be optimizing (things going too well)

We may be stuck at a local maxima

Get ideas, test them, talk to others, be creative, etc.


Good luckGet some growth/prowth advisors

Ak questions / get answers

Growth is probably not a competitive advantage (and everybody can see what you are doing)

Download - [500DISTRO] Measuring for SaaS Monetization: Choosing Metrics, Running Experiments & Deciding When To Charge

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