Dave McClure

best piece i've read about angel / venture investing in a long time. nice job :) note: i'm one of a small group of ex-geek angel investors out here in silicon valley, altho admittedly i'm small fry compared to most others. i've done 5-6 deals averaging ~$25-50K, and only because i'm crazy and my wife isn't watching too closely ;) i was fortunate to be at PayPal from 2001-2004, but not so early that i'm rich enough to retire just yet... maybe someday. enjoyed the article; keep up the great writing! - dave mcclure http://500hats.typepad.com/

For web apps... I recommend you track AARRR aka startup metrics for pirates. It stands for Acquisition, Activation, Registration, Referral, Revenue. http://500hats.typepad.com/500blogs/2007/09/startup-metrics.html

started with this article.. http://techcrunch.com/2010/09/21/so-a-blogger-walks-into-a-bar/ followed up by this http://500hats.typepad.com/500blogs/2010/09/fire-in-the-valley.html look through this quora topic you can find out more http://www.quora.com/AngelGate

That's a shame, because Dave is one of the charter members of the PayPal Mafia and one of the top angels in Silicon Valley, has an extremely impressive CV and by all accounts a great guy.[1] He was director of marketing for PayPal, and he know exactly what he's doing in writing like that. Frankly, I think his writing is hilarious. Please, this is Hacker News, disagree with the substance of his thoughts, not his style of communication[2]. ref: [1] http://500hats.typepad.com/500blogs/about-dave-mcclure.html [2] http://www.paulgraham.com/disagree.html

Original version here: http://www.500hats.typepad.com/500blogs/2010/01/startups-vcs-eat-your-… The editing process apparently stripped it of some of damn-wretched bloodletting tricolored shamen-with-ransom-notes charm. (That might sound snarky but I actually kind of like the metaphor. The refusal to use rudimentary measures like e.g. A/B testing because "it is hard and anyway I know what I'm doing" makes us look less like doctors and more like physicians leeching patients because, hey, leeches were good enough for Dad. Or, to use a modern analogy, we look like doctors who will not use checklists because they're too smart to ever kill anyone because they didn't follow a checklist.)

I have a love-hate relationship with data. Data is great for helping drive product, messaging, engagement, etc. However, most data ends up as noise. It's noise because it isn't actionable. Ash Maurya wrote this great article on actionable metrics: http://www.ashmaurya.com/2010/07/3-rules-to-actionable-metrics/ In the end I think it depends on how you want to use the data. Here are a few things that I find useful: - calculating your ROI on customers by correlating marketing efforts with key metrics. Google Analytics is good for this as you can basically identify the customer origin with a marketing campaign and how they convert for key metrics. - full funnel perspective and cohort charts for AARRR metrics (http://500hats.typepad.com/500blogs/2007/09/startup-metrics.html). KISS Metrics and Mixpanel are great for this, but I still haven't found anything that does the Cohort diagrams that well. - experimenting with messaging using A/B testing tools like Visual Web Optimizer (http://visualwebsiteoptimizer.com/) which has it's own analytics. - retention email marketing is great with Customer.io (http://customer.io/) but I have fairly limited experience with that. Other tools include Statsmix (which I think is under-represented); it is pretty good for collecting custom event data. Once you have the money for it, tools like Pardot are great for marketing overall. We just implemented this so I still don't have much experience with it personally. It's a full marketing…

I think that there are a couple of factors you are omitting from your analysis. First, if you take a look at Dave McClure's AARRR model (and if you haven't, you really should [1]), you realize that Referral is something that you only want to attempt after you've got ridiculously satisfied customers. You can't expect people to spontaneously recommend your product on to others until it is absolutely friction-free, and serving that sweet spot so sweetly that they almost can't help it. Second: not all niches are created equal. Are folks whose itch is scratched by your particular product significantly more likely to be in touch with others having the same itch? For some niches, yes. For others, no. Finally, in the absence of a Freemium model, you definitely need to have a well-organized Activation process; some way for people to get engaged with the product prior to a commitment. [1] http://500hats.typepad.com/500blogs/2007/09/startup-metrics.html, for example.

Thanks for the comment and sorry if my writing style's not to your liking. My post was not written to hurt anyone, quite the opposite. I have my own writing style, yes. It's not for everyone, yes. But you don't need to come here and try to organize a mob against, to try to force me to conform to your joy-sucking rules. It's your choice and your right not to accept people who are different from yourself. God knows half of America is full of rabid, Jesus-loving attack dogs who try to force their beliefs on the rest of us. If you don't mind, however, could you please try to suffer in silence and keep your crying, bitching, and trolling to yourself. Thanks :) BTW, if you don't like words like "ass" and "fuck" and all the rest of those naughty words that cause you cry out and try to rally a mob for a witch hunt, you might want to avoid blogs such as "500 Hats" by Dave McClure. Here's Dave's bio: http://500hats.typepad.com/500blogs/about-dave-mcclure.html here's one of his posts: http://500hats.typepad.com/500blogs/2006/11/why_you_want_yo.html and here's every post he's written with the words "ass" or "fuck" in it: http://www.google.com/search?hl=en&source=hp&q=ass+or+fuck+sit… Can you still see, or did all those naughty words blind you? Better stay away from TechCrunch, too. That Arrington has a mouth on him! Of course, it's nothing like that Zed Shaw. Hehe, I love those guys. You know, what really burns me up, though, is little…

Dave McClure laid out a model for playing Moneyball on startups – investing well before product/market fit, when other VCs didn't see value. Today, that's 500 Startups. http://500hats.typepad.com/500blogs/2010/07/moneyball-for-startups.htm…

I'm curious if this would ever create value as a prediction market. I've often thought that this exact tool, when used as a prediction market could remove some of the froth of this industry. (Here's a paper Dave McClure wrote about prediction markets, if you're not familiar: http://500hats.typepad.com/files/ChannellingCrowds_DaveMcClure_Release…

Why do you think "upvote conversion rate" is an important metric for anything? You might enjoy this post by Dave McClure: http://500hats.typepad.com/500blogs/2007/06/internet-market.html

Minus the crazy font, cursing, and pictures Dave McClure has a point in his article: It's all about the Faces > http://500hats.typepad.com/500blogs/2009/05/the-faces-the-faces-its-al…

First thing: Watch this video from Luis von Ahn http://www.youtube.com/watch?v=cQl6jUjFjp4 He is the creator of reCAPTCHA and working on a translation solution which answers your question (regarding how to get people to eagerly do work for your community) pretty eloquently. Regarding your specific user engagement problem... I would venture to say that the problem you're solving here is not clear. You describe what your site can DO! But not what your site DOES for me. In other words, you're solving problems. Not providing solutions. This blog post from Dave McClure is pretty relevant here, too: http://500hats.typepad.com/500blogs/2009/08/your-solution-is-not-my-pr… Despite the aggressive tone of the article, I think there's a good insight on how you should be "pitching" on your website's landing page.

The parent meant that he is glad Ron Conway called out Dave McClure's response to the original TechCrunch piece (http://500hats.typepad.com/500blogs/2010/09/fire-in-the-valley.html). Took me a couple times to parse too :P

Actually I should have pointed to Dave's own site. http://500hats.typepad.com/500blogs/2010/07/moneyball-for-startups.htm…

One of the better startup business plan frameworks I've come across was one Dave McClure included in his post Startup Metrics for Pirates (http://500hats.typepad.com/500blogs/2010/01/startup-metrics-for-pirate… Check out slides 26 and 27 - the One Page Business Plan.

I'm not really sure why others are so paranoid about logging in via FB Connect. Honestly, going forward, I think FB connect / Twitter etc. are going to emerge as the primary means for logging in - check out Dave mcclure's post about password friction below: http://500hats.typepad.com/500blogs/2010/02/subscriptions-are-the-new-…

Analytics make optimizing the "viral loop" much easier, as described by Dave McClure: http://500hats.typepad.com/500blogs/2007/09/startup-metrics.html Of course when you can break this down by feature and integrate multivariate tests, ad campaigns (inbound and outbound if that is your thing,) and so on.. the numbers can get complex, quickly. Opinion & gut-based decisions are a terrible way to run a business. Numbers! You should be analyzing your numbers from day 0. I don't think that analytics should be an "eventually" thing, it should be deeply ingrained in your corporate culture from the start.

The product manager should also be doing some Kano Modeling and figuring out the ROI on features. http://en.wikipedia.org/wiki/Kano_model They should also own the metrics dashboard. They should now exactly which features are driving which stage of the sales pipeline. http://500hats.typepad.com/500blogs/2007/09/startup-metrics.html

Its not just his style, his content is generally suspect too. His articles tend to focus on really obnoxious and tired metaphors: Metrics for pirates: http://500hats.typepad.com/500blogs/2009/10/startup-metrics-for-pirate… Hard for a web 2.0 pimp: http://500hats.typepad.com/500blogs/2009/02/its-hard-out-he.html And in general seems to be a big proponent of that really tired "Im a rockstar ninja coder because I write facebook apps in rails" attitude. ( http://500hats.typepad.com/500blogs/2007/07/kottke-is-wrong.html ) For someone who is a self-styled "master of 500 hats", he could work to be at least a 5 or 6 in writing and text layout.

I don't think Dave needs to "stand up to Jason or Graham or Spolsky" to give more value to his opinion. He's got enough star power by himself, though oddly the people posting on here at the moment seem to be blind to it. See http://500hats.typepad.com/500blogs/about-dave-mcclure.html

Check out Dave McClure's advice on the pitch if you haven't already: http://500hats.typepad.com/500blogs/2009/08/your-solution-is-not-my-pr…

On that note: http://500hats.typepad.com/500blogs/2008/10/fear-is-the-min.html

Based on my humble experience (I won at Disrupt SF last year), I'll add this: - as the OP said, when presenting, start with the problem. But really insist on it so that it becomes painful for the judges. Show the problem you're trying to solve on existing sites/apps. Then show your solution on how you solved it. (See this post by Dave McClure for reinforcement of the idea: http://500hats.typepad.com/500blogs/2009/08/your-solution-is-not-my-pr… - don't try to do too much: e.g. you don't need a web app + a mobile app to show you've solved the problem. "And we have a mobile version of it" doesn't help you in convincing the jury that there was a problem and that you solved it. Everyone knows that a website that solves a problem can exist in the form of a mobile app. You're wasting your time just mentioning it. - don't discuss the technical problems you've had. For you it's interesting that you finally managed to get around that hurdle and it's tempting to quickly brag about it, but jurys don't care. - while focusing on an API can work, I'd say to also try to incorporate some APIs if that makes sense and you have time. My hack was about showing movie schedules à la Hipmunk (a slow, uglier-than-it-was-then version is still up: http://flickmunk.com/), but I managed to find the time to add some Twilio pieces to it (I was familiar with the API already) and that was enough to win their prize too (a MacBook Air no less) while other hacks were fully focused on Twilio and…

First and foremost you need to familiarize yourself with Dave McClure's Startup metrics: http://500hats.typepad.com/500blogs/2007/09/startup-metrics.html If you then look at your analytics, you will then find that you likely have either an Activation problem or a Retention problem or both. That then tells you the areas of focus in terms of the problem to correct. Also read: http://www.socialmediamodels.net/social-media-overview-models-category… http://www.slideshare.net/startuplessonslearned/eric-ries-engagement-l… http://www.startuplessonslearned.com/2008/12/engagement-loops-beyond-v… http://andreehuk.com/post/67267407194/gradual-engagement-a-growth-hack… http://sixteenventures.com/saas-customer-success-quick-wins