This is a guest post from Joca Torres. Joca is the director of product development and product management at Locaweb, Brazil’s leader in web hosting, cloud servers and SaaS applications like email marketing and online stores, serving more than 250,000 customers. His first startup experience was in the early 1990s when he founded and ran one of the first Brazilian ISPs. He has been working with internet related software ever since.
Joca is also the author of The Startup Guide: how startups and established companies can create and manage profitable web products. The book is in Portuguese, but Joca has been kind enough to translate a few sections of it for us. This is Joca’s fourth guest post in this series. Joca also posted all of the book’s content on the “Guia da Startup” blog (in Portuguese).
During David Cancel’s 2011 “Data Driven Business” he mentioned how important it is to know your numbers. He even mentioned that “In Data We Trust” paraphrasing US official motto “In God we trust”. His talk inspired some chapters of my book “The Startup Guide” (in Portuguese) that I’ll translate below.
All data is important, but depending on what you’re looking to understand, certain data is more important than other. Knowing your data is an ongoing task as each new knowledge you acquire from data will motivate new questions that will need more data or a different perspective on the existing data to be answered.
The first information that you will want to know is how many visits you receive on your product web site. To know these numbers you can use some statistics report included in the hosting package of your hosting provider. Another option is the well known Google Analytics.
With a report like this you get some important information such as number of visits, number of unique visitors, page views and much more. Depending on the system that you are using, you may also see the first and last pages visited during an access to your site, which country and city your visitors come from, if your visitors have accessed your site coming from a campaign you are running on Google AdWords, Facebook or somewhere else, or if they found your site organically, or by directly typing the address, or searching for something in a search engine. It is important to remember that you should have reports not only for your web site but also for your web application.
But be careful! These report systems normally provide a huge amount of information and it is easy to get lost in this sea of data.
Along with the amount of views and hits your site has, there are other important data that you need to know about your web product:
Napoleon Bonaparte, French military and political leader known by the Napoleonic Wars, through which he was responsible for establishing the French hegemony over most of Europe in the early nineteenth century, had a major defeat in 1812, the Invasion of Russia. This invasion was a huge military operation brought by the French and their allies who had a major impact on the outcome of the Napoleonic Wars, marking the beginning of the decline of the First French Empire. In this invasion Napoleon used 580,000 combatants. Of these, only 22,000 survived, the rest perished on the way from France to Moscow due to difficulties such as cold, rain, rivers, and other natural and man generated obstacles.
This image resembles a conversion funnel of a web site that can be done with the data discussed above. The conversion funnel shows us how we’re losing potential customers in the way of attracting people to the site to the point where a person pays to become your customer:
The conversion funnel helps us see where we must work to get more paying customers. For a “data geek”, this should be the primary focus in terms of data to be obtained and analyzed. Each piece of this funnel requires a different type of action to be enlarged.
ContaCal is a web product I created in 2011 during nights and weekends with no connection with my day job in order to experiment with building a startup using the most recent methodologies and best practices. ContaCal is a calorie counter system with a twist. Besides telling you the amount of calories you’ve ingested it also tells you the quality of these calories. If you want to read more about it, you can read my previous posts. Below is an example of a conversion funnel based on ContaCal’s data.
Sorry for the Portuguese, but here’s the translated column names in the same order they appear above:
Note that this is a monthly funnel. It is important that you also have a daily funnel so you can measure everyday the impact of changes and experiences that you do to enlarge the funnel.
Below is another example of ContaCal’s daily funnel showing the daily cohort of users to paying customers. Cohort, as defined in Wikipedia, is a group of subjects who have shared a particular event together during a particular time span. I have a 5 day trial period, enough to test ContaCal, so I measure what happens with users since signup until the 5th day:
Again, sorry for the Portuguese, but here’s the translated column names in the same order they appear above:
In my next post I will talk about the long-term numbers we also have to track.
BUSINESS OF SOFTWARE – FOR PEOPLE BUILDING GREAT SOFTWARE BUSINESSES.
This year will be the 7th Business of Software Conference – 15-17th September 2014, Boston.
A three day conference for founders who want to build sustainable, profitable software businesses. BoS has always been a special conference for our delegates and we want to keep it special. Attendance is restricted to just 400 attendees in 2014. Registration open now.
This year we are also running Business of Software Conference Europe, 25-26th June. For more details, visit the dedicated BoS Europe site. Two days in the birthplace of computers – Cambridge, England.
Join our mailing list to be the first to know when this year’s talks go live and to hear the latest news from the conference.