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Chapter 9 – Metrics: How platform managers can measure what really matters…
Chapter 9 – Metrics: How platform managers can measure what really matters
How Platform Managers Can Measure What really Matters
Need to focus on a handful of key metrics to guide them.
Roman Army
(
Caesar
)
A certain number of soldiers and animals
Could quickly determine how far the army could march and how long it could campaign before reprovisioning.
Need to consider three key metrics.
90% of the weight of the supplies needed by an ancient army
2.
Fodder
for the animals
Firewood
for warmth and cooking
1.
Food
quantity for the men
From pipeline to platform:The new measurement challenge
The traditional metrics of pipeline businesses quickly
break down in the context of a platform.
Developing alternative metrics that effectively measure the true health and growth prospects of a platform business is far from easy.
BranchOut
( in
July 2010
)
A professional networking platform based mainly on an app that enabled users to make job-hunting connections via Facebook
expand from fewer than a million to a whopping 33 million between the spring and summer of 2012
Why?
Some blamed changes in Facebook’s app developer platform.
Others pointed out that the whole notion of blending job search capabilities with Facebook’s social networking ambience was misguided.
The most significant mistake of BranchOut was focusing on—and measuring—the wrong things.
1 more item...
Before another four months had passed, the number of members had plummeted to fewer than two million.
Difference between the core metric of platform and the core metric of the pipeline
Pipeline manager is concerned with the flow of value from one end of the pipeline to the other
Pipeline metrics are designed to gauge the efficiency of this value flow
monitoring this metric can help managers make necessary adjustments to keep the business humming.
Platform manager is concerned with the creation, sharing, and delivery of value throughout the ecosystem
The
big goal
of platform manager is the
creation of
value
for all users of the platform.
Designing metrics that track the life cycle of the platform
1.The startup
Platform is critical to have simple measures to guide decision-making around key questions of platform design and launch,
The design of the core interaction
2.The creation of effective systems of curation
3.Decisions about how open the platform should be to various kinds of participants
1.The development of effective tools
Facilitate interactions
Match producers with consumers
Pull users
2.The maturity
In growth phase,designed metrics can help platform managers develop accurate answers to questions about the platform.
Finally, as the platform matures and a self-sustaining business model has been
developed
, the
challenge
of user retention and
growth
requires the platform to
innovate
.
the
best way
to
maintain and enhance
the business’s value proposition relative to competing
platforms
.
Stage 1: Metrics During The Startup Phase
What to focus on:question:
Core interaction and the benefits it creates for both producers and consumers on the platform
Trust
Users of a platform feel comfortable with the level of risk associated with engaging in interactions on the platform
Airbnb
Curate participants successfully
Liquidity
A minimum number of producers and consumers and the percentage of successful interactions is high
How to measure:question:
Track the percentage of listings that lead to
interactions within a given time period
Marketplace platform
An interaction might be the purchase of a product
Professional networking platform
An interaction might be the offer of a recommendation
Information and entertainment platform
An interaction might be the click-through that takes a consumer from a headline to a complete story
Illiquid
Discourage users from participating in the platform
Matching quality
Deliver value and stimulate the long-term growth and success of the platform
How to measure:question:
Track the sales conversion rate
Stage2: Metrics During The Growth Phase
The critical metrics that best measure the number and quality of interactions in your ecosystem will change over the life cycle of the platform. :check:
Once the platform reaches a critical mass of users
As growth continues
The platform must monitor the
change in size of the user base over time
Ensuring the balance on the two sides of its market
by calculating the producer-to-consumer ratio,
with an adjustment to include only active platform users
Managers must still ensure that the core interaction is creating value and that the inflow of engaged users exceeds the outflow
OkCupid
The manager will track the ratio of straight women to straight men, and work hard to adjust that ratio when it diverges from the level they deem optimal.
by asking users to rate the attractiveness of those on the opposite side of the platform.
filter to reduce the number of men who can participate in the platform by seeing women’s profiles
In Lean Analytics
On the producer side
frequency of producer participation
The value of a producer can be calculated using traditional lifetime value (LTV) models used in many kinds of businesses.
Repeat producers
listings created
outcomes achieved
interaction failure
producer fraud
On the consumer side
the frequency of consumption, searches
Provides the data necessary to calculate each consumer’s LTV
Churn rate
The rate of conversion to sale
Iinteraction conversion rate
Airbnb
Haie
the distance between consumers and producers
STAGE 3: METRICS DURING THE MATURITY PHASE
When making improvements to your product is the only arbiter of whether or not it was successful is the metrics
drive innovation
How to do?
focus on the role of metrics in driving innovation
platform must be able to adapt to the needs of its users and to changes in the competitive and regulatory environment
Microsoft Windows
Apple Maps
have a high signal-to-noise ratio
facilitate resource allocation
ELEMENTS OF SMART METRICS DESIGN
To aovid the vanity metrics
3 A’s test
Actionable, accessible, and auditable
To be simole.......
G4
Vivian
Thet Thet
Terry