Over the years we’ve seen a number of frameworks emerge
that help us understand startups and the changes they undergo as they
grow, find their markets, and help startups acquire customers and
revenue. Each framework offers a different perspective on the startup
lifecycle, and each suggests a set of metrics and areas on which to
focus.
After comparing and contrasting a number of these frameworks,
we’ve created our own way to think about startups, and in particular the
metrics that you use to measure your progress. We’ll use this new
framework throughout the book—but first, let’s take a look at some of
the existing frameworks and how they fit into Lean Analytics.
Dave McClure’s Pirate Metrics
Pirate Metrics—a term coined by venture capitalist Dave
McClure—gets its name from the acronym for five distinct elements of
building a successful business. McClure categorizes the metrics a
startup needs to watch into acquisition, activation, retention,
revenue, and referral—AARRR.1
Figure 2-1
shows our interpretation of his model, describing the five steps
through which users, customers, or visitors must progress in order for
your company to extract all the value from them. Value comes not only
from a transaction (revenue) but also from their role as
marketers (referral) and content creators (retention).
Figure 2-1. Even pirates need metrics, says Dave McClure
These ...
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