Andrew Chen: Investor Metrics Deck

I’ve seen this a few times and definitely want to bookmark it here on my blog so I can find it later ….

His three questions are simple and good:

• Is it (growth) working?
• Will it sustain?
• Will it improve?

And I like his simple two loops:

The way he describes case 2 applies to everything I’ve been thinking about:

And the “2nd try case” is easy to neglect:

And the “What value is being created on each visit?” Q is a great one:

This is all laid out in a Twitter format from this point onward:

Teams often use bad metrics to hype themselves up to investors, yes, but they also use them to lie to themselves. 👇 Thread.

— Andrew Chen (@andrewchen) December 27, 2018

Like many investors he doesn’t like marketing spend as a means to acquire new users:

4/ When it comes to new user acquisition sources, I always ask what % is driven by paid marketing. Sometimes folks will try to hide the number, or justify that it’s high for now, but will get better. It won’t get better.

5/ Paid marketing is a bad, bad addiction. I’ve written about this here: https://twitter.com/andrewchen/status/993560378129960960 …. It’s shocking how often people cite numbers higher than 50% or even 75% and think it’s OK and the unit economics will sustain. It won’t!

1/ Many of the biggest implosions in recent history – especially ecommerce – have been due to startups getting addicted to paid marketing while fooling themselves on Customer Acqusition Costs. As spend scales, it always gets more expensive and harder to track – never less.

— Andrew Chen (@andrewchen) May 7, 2018