Instruction from the product Manager of the developer of the “Manufactura” Dmitry Provotorov and technical Director application Meinestadt Andrew Esaulova. In November 2016, answering the question of the management of the company “Should invest in the development of mobile apps?”, we have created a KPI calculator. It is a framework that allows to identify the main point of focus for growth hacking and predict outcomes that can be achieved with it.
The result was not only the receipt of funds for the coming year of work on the product, but also the successful launch of the app in April 2017. We were able to predict some of the performance indicators with accuracy up to hundredths of a second, more — “hack” some of them, showing a twofold or threefold increase.
In this article we will describe three simple steps that 45 minutes will help you simulate the key performance indicators of your application, based on the experience gained in the development process. For convenience of calculations we have placed the framework in the public domain. We need to arm the mathematical knowledge and devise a formula that describes how a mobile product is involved in the business processes of the company that owns it. In most cases, of course, the impact on income.
In the simplest approximation formula monthly income will look like this: The action here can be viewing ads, buying a product or subscription content.
For the application media that earns on advertising, the monthly income formula would look like this: For the application, earning affiliate fees from purchases which are made by users of the application (this may be the sale of books or clothes): For applications with a subscription model of distribution of content (training courses or journalism):
The artifact upon completion of the first step. The formula of income, formalizing key performance indicators (we call them KPIs), which play a crucial role for your mobile app. As you can see, it us enough napkins, pens, and logic.
In the previous step you identified the key indicators on which the success of a mobile product. Now you need to understand to what extent they can change and what led to these changes — that is, how much they affect the success. Sometimes it is enough and wipes, but basic knowledge of Excel (Google Tables or Numbers) can help you to be more efficient in calculations.
You can start with a simple table with 13 columns. In the first list of indicators, and the remaining twelve of them from month to month. Thus we get the forecast changes for the first year of life of the product after its launch. To make the forecast more accurate, the number of rows expected to increase, and the table is becoming more difficult.
But dont say immediately “Its too hard for me”. It is important just to start, will not notice as you begin to wonder the complexities of its calculations. Break the table into two large blocks.
First — calculate MAU (Monthly Active Users, monthly active audience). In most calculations the MAU plays a fundamental role and consists of New Installs (new installs) and Retention (of returns users from previous months). New Installs depends on the number of users you attract monthly native via search in the app store through an advertising campaign or viral. In the second block, the calculation of income, which depends on the size of your active monthly users.
The formula you already have. You can create your own template for such calculations, or use ready — in the network there are several options for different types of projects. (we created mKPI.calc for mobile applications, the dashboard Christophe Yuntz for startups or collection of ideas to create dashboard digital marketing from Klipfolio).
In the template mKPI.calc each option in the column to the KPI a description, recommendations on boundary conditions and examples for different products — it may serve as an assistant at an early stage. In the table visually highlight KPI. On their growth (or even “hacking”, leading to explosive growth) will focus your team.
Predict the change in these figures from month to month, and watch as the changing income with apps. Your task will be to sustain that growth. Where to get the indices for the table:
First and foremost, understand that the situation you got, much better than the one in which you would be, not having the forecast. Now you can find causes of errors and increase your expertise, the projections will become more accurate. This will help in the next step to adjust the growth strategy and lead mobile product to success.
The artifact at the end of the second step. Fill in the table with a forecast of changes in the KPI. Another previous step you probably realized that to find a combination of settings that will make the desired success, it is very difficult.
Few people want to invest in the app for revenue of $10 thousand a year. But the figure of $1 million can be a very powerful motivator. Moreover, you will already know what KPI values should be achieved in order to bring it on. In the third step is necessary not only to verify that you found the set of parameters that will help you get through the breakeven point, but also think about how to radically change the situation if I see that it turns out “average” and uninteresting for the team, customer, or investor.
They need to be especially attentive to those ideas that will come to mind — they can help to “hack” the system and to find opportunities of explosive growth. What conclusions can be drawn by experimenting with the following parameters:
The result — a clear idea on what you need to focus on the current stage of development of mobile applications. Create a road map (roadmap) product development. What functionality will go in MVP and which will be released in the next updates. The road map will help to make requirements on planning, design, development and testing.
And will support dialogue with the customer or investor. The artifact upon completion of the third step. Road map for the development of mobile applications are based on the formula of income and influence the KPI. Send a private cases, in which you managed to improve (or, conversely, worsen) the performance of the project, [email protected]
Interesting experiments are sure to get the heading “Cases”.