Digital Ventures

Back to blog

AARRR a magic solution for startups and your heart!

DIGITAL VENTURES January 07, 2017 2:29 AM

3,684

Have you ever tried setting a life goal but never achieved it? (Some people try so hard but never win her heart!) Well, what’s the real problem? AARRR can help you crack this problem.

AARRR, better known as Pirate Metrics, is a tool that helps startups to see the real issue and find an effective solution. Khun Sam - Surawat Promyotin, CEO of STYLHUNT and executive director of Bangkok Venture Club, had something to share with us.

AARRR and winning a girl’s heart

Sam told us about Dave McClure, the founder and operator of the 500 Startups accelerator project, who explained AARRR in a simple way. Imagine that three single men are looking for their true love. But over the past three years, none of them succeeded. They tried sending flowers, personality makeovers and playing more sports, and listened to lots of advice from friends, but nothing worked.

One day, a man told the three guys to think of a cone with the sharp end pointing down. This cone will filter things being poured in from the top. The result is:

  • For example, if you want to know the possibility of getting to know a woman when you hang out with friends, then the number of hangout (method adopted) is 10 and the number of women you meet (the result) is 2. This means the chance you will meet a woman is 20%.

  • Or, if you want to know the chance to date the same woman again, then you should consider the total number of dates (the method adopted) which is 20 and the number of dates with the same woman (the result) which is 3. Therefore, the chance for you to date the same woman is 15%.

The above example shows how to measure the success of each step of our actions. We can also see more clearly the chance of success. The sharp end of the cone is compared to the target we want to achieve. You may write down the percentage of the possible success in each layer of the cone. Then analyse it and see what you have to do to fix the problem. For example, if in the end, the method adopted would lead to a very low success rate, such as 1%, we should change the method in order to increase the success rate.

Two reasons to adopt this theory

  1. We can see things more clearly and identify individual problems

  2. As long as we can measure the result, we can then analyse, compare, set assumptions and try and fix the problem

How AARRR helps startups

Let’s look at how to improve monthly sales. Looking at the same cone we used earlier, each layer has a different meaning.

  • Acquisition is looking for new customers through various marketing channels, including SEO, SEM, social media, blogs, email, etc. We can measure this from the number of views and visitors to our websites.

  • Activation is the action after a customer visits a website, such as clicking like, subscribe, or buy services.

  • Retention is when the same customer repeats his visit. In case the number of revisits drops, we can analyse that the content and the website itself are below the target.

  • Referral is when your products and services are spread through word of mouth. In this case, you may study which one of your customers told others about your products and services.

  • Revenue is the final sales figure.

In a nutshell, the AARRR technique helps us to identify the problem and find the right solution. That means a higher success rate and a shorter time to achieve your goal, both for your business and your heart!

For more information, click

http://www.slideshare.net/dmc500hats/startup-metrics-for-pirates-long-version/5-Customer_Lifecycle_Conversion_Behavior_Websitecom)