Questions

If you had to pick the most important metric from Dave McClure's AARRR? What would it be and why?

9answers

Retention - if you build something people want/use AND come back and use often, then you can usually figure out a business model to make it work (if there's a big enough market).


Answered 6 years ago

agree with Retention, but both Activation & Retention together are important. you need to have an initial call-to-action (CTA) to USE and EXPERIENCE the product for the first time (or at least explain it / see how it works) in order to have a shot at Retention to then work.

IMHO the Activation-Retention loop is super important to get working -- at least at a basic MVP level -- before you start really driving hard on Acquisition, Referral, or Revenue.


Answered 6 years ago

you can't really have one without the other, but in my experience, particularly at Amplify in the past 18 months, I've found that ACQUISITION is the most commonly underestimated for new startups. The other stuff really doesn't even come into play without it. I've seen thousands of young startups at Amplify and most of them don't really have a handle on how they will find and acquire new users.

Even for those companies we invested in (28 at the time of this answer) most of them don't have it cracked by any means. Sometimes the best we can hope for is a set of data supported "ideas" around customer acquisition, but ultimately it's a lot of testing.

One things I've also observed is that customer acquisition strategies don't always scale. By that I mean, you may be able to get users from a particular channel or activity at one price, but that caps out at 20 per day or 100 per month (at that price or in total). I encourage founders to try and understand how many users they'll actually need to get to the next big milestone (raising more cash, making revenue, running off cash-flow, etc.

Once they have a sense of where they need to be, that can drive the use of time associated with various customer acquisition strategies. In the end, getting customers, particularly on mobile, is hard effing shit. When I see a startup with a very unique approach to this, they stand out like a sore thumb (that's a good thing).


Answered 6 years ago

Retention–it's the best indicator of product market fit, which is the key to sustainable growth. If you can acquire and activate but not retain, you'll never establish the flywheel of momentum that comes from people who love the product and give lift to your acquisition efforts.


Answered 6 years ago

Depends on the life cycle of the product. At the most meta level, you have to have retention to have a product; however, the biggest driver of growth will usually be acquisition. If you don't retention, you don't have real users thus you don't have a user base.


Answered 6 years ago

Retention.

Retention means you've built something valuable and differentiated. Of the AARRRs, it is the closest approximation to Product Market fit.

Once you've nailed Retention:
- Acquisition is easier: you have a product people want)
- Activation is easier: tell people what it is that others like about the product
- Referral is easier: every time users come back, you have another chance to get them to refer you
- Revenue is easier: you have something consumers value and want to use. Either scale and sell ads or sell premium features.

Retention obviously isn't perfect: you could have found the only 100 people who care about your product or maybe it takes 15 minutes to convince people to even try it, but having fantastic retention is certainly a great foundation for building a huge company and a brand.


Answered 6 years ago

Retention. It's the guts of your product. You'll not be able to solve for churn without first understanding Retention. It most likely also influences your Engine of Growth and your Acquisition spend. I recommend designing experiments to explore and learn about Retention before you mistakenly invest in scaling the wrong thing.


Answered 6 years ago

Retention, otherwise you are filling up a bucket that always has a leaking hole.


Answered 4 years ago

Unlock Startups Unlimited

Access 20,000+ Startup Experts, 650+ masterclass videos, 1,000+ in-depth guides, and all the software tools you need to launch and grow quickly.

Already a member? Sign in

Copyright © 2019 Startups.com LLC. All rights reserved.