Posts

After I wrote a post on six important cohort reports, I received a handful of questions about how to interpret cohort charts effectively. When I review cohort data from companies I work with, I look into three different trends to evaluate a product’s performance.

This is a cohort chart of hypothetical product indicating percentage of monthly active users each week for 12 weeks. There’s great data here and but the amount of data can be overwhelming. Time flows down and right in the chart below.

I’ve been reading Scott Berkun’s book The Year Without Pants which details his working life at Wordpress. The book reveals a thought-provoking collection of lore behind Wordpress and in particular, the day-to-day operations of a distributed volunteer team who built a technology that powers about 20% of the internet.

Scott embeds insightful gems about daily startup work life into his stories. My favorite so far is this one:

“Most people doubt online meetings can work, but they somehow overlook that most in-person meetings don’t work either.”

The NoSQL movement launched officially in 1999 but rose to prominence much later perhaps closer to 2008 when Hadoop and other key value pair technologies became en vogue.

Today, it’s hard to argue with the success of the movement. Large banks, insurance companies, biotech companies and dotcoms rely on NoSQL to power their services and inform their most important decisions.

I first saw MapReduce at Google. I’ll never forget the conversation I shared with a search engineer who described MapReduce. Separate the data, process each chunk individually, and reassemble it. That’s how it works, he told me. It was fascinating and unlike the SQL mechanics I knew.

One of the hardest but least spoken about transitions in a startup’s life is crossing people management chasm.

At the outset of the startup, there might be three people, then eight, then fifteen. As they grow, startups often create ad hoc managers I call team leads.

Team leads manage 3 to 5 people. They work alongside their team, whether engineering, sales or marketing and contribute actively to achieving the goals of that team team. They code, sell or market for 50% of their time. With the remainder, team leads coordinate team members, set goals and measure progress. In company sizes around 30 to 50 or so, team lead structures work well.

One of the most frequent questions entrepreneurs ask me is how does their business compare to others? Benchmarking is a great tool, if you can get access to representative data. Pacific Crest and David Skok have released a fantastic survey benchmarking SaaS metrics for early and growth stage companies. The entire report is well worth reading. Below is my list of the six most important benchmarks and observations from that report.

The venture capital fund of the future will perform the same tasks as the venture funds of today: help portfolio companies, evaluate new investment opportunities and build networks of other investors, potential hires, and founders.

But to succeed over the next 25 years, venture capital firms must increase the scale and sophistication of each of these duties by order of magnitude through technology. In the five years I’ve worked in the venture business, I have witnessed tremendous change in the industry driven by intensifying competition for returns.

It’s not engagement. Engagement, (time-on-site, page views, number of sessions per day) is the wrong concept because it doesn’t apply to most products. The best metric is share of habit.

Engagement fails the majority of products as the best metric to optimize because maximizing engagement/time-on-site contradicts the product’s purpose. Google relentlessly whittles down the time it takes for users to complete a search. Sparrow reduces email client use. Online travel agents and e-commerce companies minimize conversion funnel duration. Expensify slashes time spent filing expenses.

In a very kind gesture, Ivan Kirigin submitted this blog (and Intercom.io’s blog) to answer the question posed by Disqus, What is the best content marketing campaign you have seen and why? I’m honored by his comment. In response, David Fleck, head of revenue at Disqus asked whether the blog has ever led to an investment and whether that’s the right KPI for it.

I haven’t yet found a startup through the blog that Redpoint eventually invested in, but I’m hopeful it will one day. But this blog has helped me compete for investments. Ex Post Facto is my place to share how I think about products and markets and startups.

It is easy to think the sales process ends once a customer has signed a contract or downloaded an app or created an account. But it’s a huge mistake.

Great products have a point of view on the way things ought to work. GMail chose labels over folders for email categorization. Pandora chose recommendations over libraries for music libraries. Looker chose spreadsheets over an SQL prompts for data exploration. None of these ideas matter if they aren’t used.

I have never worked for a company that was dogmatic about project postmortems but I have always wished I had. After all, project postmortems teach us so much.

Learning from the mistakes and experiences of others constitutes the better part of our business education. It’s why we ask successful entrepreneurs to coffee and hang on every word when they speak at conferences. All those stories are postmortems. Postmortems condense all the experience and learning into a nugget of shared wisdom.