[CDPS] G2 - (PR) Chapter9 - Metrics
Member: Sunny / Cindy / M.J / Phoebe / Ian

New Measurement Challenge

Metrics Design

  1. Startup phase
  1. Growth phase
  1. Maturity phase

ba

Pipeline v.s. Platform

2011

Smart metrics design

Focus on core interaction and benefits for users on platform

Use the proper metrics at different stages

Requirements ✅

Factors of Branchout's failure

2012 Summer

Founded

2012 Autumn

Users rapidly increase 💥

Enabled users to make job-hunting connections via Facebook

Crucial metrics

Tracking successful interaction of active users:
Source of positive network effects - Critical to success

2013 Summer

Users plummeted to fewer than two millions

Ensure the core interaction can keep creating the value

New business strategy

Workplace chat 🗣

platform managers must ensure the balance of two side
➡️producer-to-consumer ratio

2013 Autumn

Not a failure , it's still alive

Changing form Facebook

The concept was questionable

OKCupid

customer : male
producer : female

Focusing and measuring on the wrong things

Calculate the value of each user type

Users rate the male

Effort to boosting membership numbers

Filter the information that male can see

But

It doesn't mean anything

The important factors

Activity

The number of satisfying interactions

Maintain positive network effect

Conclusion

Fostering market liquidity

avoid the imbalance

Platform transform every traditional things

Demand new forms of internal measurement

  1. Liquidity
  1. Matching quality
  1. Trust

Pipeline

Platform

Interaction failure will be minimize when achieved

The first and most important milestone

A minimum number of producers and consumers for mass successful interaction

Reasonable way

Key numbers of metrics

Gauge the efficiency of this value flow from one end of pipeline to other

Frequency of producer participation

Listings created

Outcomes achieved

Cash flow

Inventory turns

Operating income

Gross margin

Overhead

Return on investment

Monitor instances of producer fraud

Lifetime value

Repeat producers

customer

Help platform earn value , less cost

The frequency of consumption

Monitor

Tracking the percentage of listings that lead to interaction within a given time period

Rate of conversion to sale

Searches

Active usage of platform are more important than total users

Help platform manager create strategy

Ratio & Rates are more useful:
They present the differences and changes

Tracking occurrence of illiquid situations

critical metrics

The side switching rate

Unique metrics depend on different motivation

Accurate matching reduce searching cost of users

Need to convert the concept into a numerical index or meaningful metric

Intuitiveness of navigation tools offered to users

Reasonable way

Accuracy of search algorithm

Simplicity is a virtue

Be aware of vanity metrics

Ex: The number of set-up members

3 A's test

Accessible

Audiable

Actionable

Tracking sales conversion rate:
Percentage of searches that lead to interaction

keep caring about users participation and satisfaction

Compare interaction percentage of particular users with their long-term rate of activity

Especially important for the markets that risk accompanied by interactions
e.g. Platforms

A well-run platform usually curate both side of users successfully to reduce the risk involved in interaction

Can be achieved through excellent curation of participants on the platform

Formula design for metrics

considering

Type of users

Type of interactions

Nature of platform

Type of platform business

Forms of value creation and exchange

Variety of interaction performance

Create value primarily through the impact of network effects

Metrics

The factors that contribute to it

The success of the platform in foresting sustainable repetition of desirable interactions

The rate of interaction success

  1. Drive Innovation
  1. a high signal-to-noise-ratio
  1. facilitate resource allocation

Smart Metrics Elements

i. necessary adaptations

ii. competitive & regulatory environment changes

Microsoft Windows, Cisco

Simplicity ✅ (ODesk)

Eric

Eric Ries (Writer & Entrepreneur of" lean startup" movement)

3As' Test: Actionable, Accessible & Auditable

Most important metric

number of happy customers on every side of the network
repeatedly engaged in positive, value-creating interactions