Pollenizer Co-founder Mick Liubinskas (aka Mr Focus) is reknown for being obsessed with the need for focus within businesses and particularly startups.
“I’m absolutely obsessed with focus. Lack of focus is the number one cause of failed businesses. You need to keep products really simple and nail that first target segment of customers, then you can think about growth.”
Applying focus can sometimes be difficult. As Mick says: “Building web businesses require brutal and relentless focus”.
Mick’s focus mindset is crucial for making effective decisions and this needs to be supported by a tracking the right metrics. I believe focus applies to metrics also.
AARRR Metrics
US entrepreneur and angel investor Dave Mclure has what he calls the AARRR Metrics – jokingly called metrics for pirates.
The basic concept is based on 5 types of measurements of user behavior:
A: Acquisition – where / what channels do users come from?
A: Activation – what % have a “happy” initial experience?
R: Retention – do they come back & re-visit over time?
R: Referral – do they like it enough to tell their friends?
R: Revenue – can you monetize any of this behavior?
Example: You drive 10000 people to your site (acquisition), 500 sign up (activation) and pay $10/month (revenue); 300 customers keep paying each month (retention) and 150 new customers are created by referrals…..
Where’s the gap? Know which metric you are focussed on.
The first step is to ensure each of these metrics are being tracked by a tool such as KISS metrics. The next is to identify which metric needs the most attention. This is your metric focus.
Now, select one metric to improve and run an experiment. It might be a new campaign, a pricing change, landing page test etc. Put in place and run an A/B test. Make sure you get enough data to demonstrate a decisive result. Choose a winner and then pick your next focus.
Why only one?
When you make changes sometimes there may be an impact in another metric. For example:
- Driving a large amount of traffic from a new channel may affect the activation rate. Different traffic is of different quality.
- Adding a new revenue step or changing pricing may affect activation rate.
- Having a high referral increase may increase activation rate.
- Improving activation with the wrong customers may reduce retention or referral.
Even if you understand multivariate testing, does everybody in else in your team. How much longer does it take to gather data? Stay lean, keep it simple and keep your changes focussed on one key metric at a time!
You a people are the least focussed bunch I’ve ever seen. You don’t know what it means tobe focussed. That is why you have had to many failures. Stop working on small average ideas and build something big. Close your doors and go on holiday until you’ve found that big idea. Your ideas are mostly features not products. And your business is a quasi agency / incubator model. It doesn’t make sense. Take the best people off your pods and create 1 pod. Fire everyone else. Fire your Indian army and hire smart local talent with the funds you’ve raised and build something real. That is what is means to be focussed. It’s hard enough to build one great web business, never mind 5 or 10. You go lucky with Spreets but it wont happen again.
If you don’t want to be a one hit wonder (i.e. Spreets) I suggest making a massive pivot, changing your model, and incubating something great from the experience you’ve built over the last few years.
Hey Derek, I don’t know you and invite you to come and see what we actually do at Pollenizer. It isn’t what you describe here.