who has completed an action that might lead to potential revenue. Alternatively, you could count someone who has clicked X times within your app, or someone who has a session time of more than 60 seconds. RETENTION. If you
The system was flexible enough to track every single ‘referral code’ back to a user, a driver or a specific marketing promotion
can’t keep users coming back, then your app is doomed. At Hailo we measured this as how many times a user opened up the app per month, and how many times they opened the app and requested a taxi. You can also drill down to the level of measuring how many times per month a user opens or clicks on the emails that you send to them. REFERRAL. This can be a tricky metric to track, so it helps to build a product
feature to encourage it. From Day One we built in the ability to input into the passenger app on Hailo ‘promotion codes’ that would give passengers ?5, ?10 or more off their next taxi ride. REVENUE. You should be aiming to make this work from the very beginning.
We monitored not only spending per customer, but also any discounts, refunds and the actual gross margin we made per user. We also monitored how much people were tipping their drivers.
Understanding and driving this metric is critical to success
Putting Metrics into Action Your goal – even at this MVP stage – is to put these metrics into action. You don’t need to delve into more complex ones at this stage, but you do need to understand how these metrics map out your user lifecycle. The first thing you want to do is plot out what you think your user lifecycle is going to be. This is best explained with a real example – let’s use Hailo again. Our first model was pretty simple (and was refined down the line). Stage
14 Make Something People Love 15 New and Improved Version 1.0 16 The Metrics of Success 17 Getting Your Growth On 18 Dollars in the Door 19 Seducing Venture Capital Step 3: The Hundred-Million-Dollar App Tuning Your Revenue Engine, Growing Users and Raising Series B Funding 20 A Colorful Lesson 21 Tuning and Humming 22 Getting Shedloads of Users 23 Revenue-Engine Mechanics 24 Keeping Users Coming Back 25 International Growth 26 Growth is a Bitch 27 Money for Scale Step 4: The Five-Hundred-Million-Dollar App Scaling Your Business and Raising Series C Funding 28 Shifting Up a Gear 29 Big Hitters 30 Scaling Marketing 31 Killer Product Expansion 32 Scaling Product Development and Engineering 33 Scaling People 34 Scaling Process 35 Financing at a Big Valuation Step 5: The Billion-Dollar App The Promised Land
businesswoman and Facebook chief operating officer Sheryl Sandberg peer down over my desk. But, as I reread these books, I keep finding business strategies that no longer work, or principles that, although only a few years old, seem to be already outdated in the fast-moving world of mobile technology. Today, the most successful new technology businesses are rewriting the rules in real time. A new wave of companies is rocketing to success in mobile technology, and a new type of entrepreneur is driving them towards billiondollar valuations faster than at any point in history. I’ve read numerous accounts of how to build a world class technology company – but no one has yet attempted to package practical, actionable advice about how to build an extraordinary, billion-dollar, mobile-centric business into a single book. Over the last few years building up my own mobile startups, I yearned for such a resource, something that would aggregate all the best lessons, and pitfalls, of fast-growth mobile startups. I found nothing. But I did start collecting all the information I could. I asked for introductions to other mobile startups, and I talked to and interviewed countless people. That formed my own personal guide about how to build a mobile company today. How to Build a Billion-Dollar App is not based on theories. It is not an academic research paper. It isn’t a collage of pithy business stories crafted by a journalist. And it is certainly not a guide that promises success and happiness for a four-hour-per-week commitment. It is about reality. It is based on hard data. The advice and information is based on what it took for a select group of entrepreneurs – a group of people not unlike you – with varied backgrounds and experience took to transform their ideas in global, billiondollar companies in just a few short yearsbined with my own experiences at Hailo, this book will also capture the very best thinking, experience, insight – and mistakes – from that select group of entrepreneurs who have followed similar billion-dollar paths in the mobile world. My journey building Hailo has given me amazing access to some incredible people and has been indispensible in guiding the decisions that will open the gates to the Billion-Dollar App Club. Now I want to share that information with you. Inside information In writing this book, I wanted to draw on advice and insights from only the best companies and the best entrepreneurs. While advice from any source can
funding rounds to help you along the journey as, in its broadest sense, the model I’ve used reflects how venture capitalists have been looking at technology companies for the last decade. The model I’ve used is not meant to be perfect – or definitive – because the trajectory of every company will be different. However, it is meant to provide clarity and structure – and distil the key challenges you will meet. There is no one-size-fits-all approach in the world of mobile startups, but, by following, or at least being aware of, the steps mapped out at each stage, you will make sure that all the foundations necessary for building a great, billion-dollar company have been addressed. Let’s look at the steps in more detail: STEP 1: THE MILLION-DOLLAR APP. Now that you’ve got your head around a
My Story One of the core themes in this book is that not only is building a billion-dollar app possible, but that opportunity is everywhere and open to everyone, irrespective of their background or experience. With that in mind, I want to share with you the rather uncommon path that
most direct and simple way of communicating to the phone’s operating system. That means it renders graphics more efficiently and accesses sensors more reliably and quickly. Web apps – by contrast – must be built to work with the ‘intermediate’ layer – the mobile Web browser – which adds complexity and inefficiency. To see this for yourself, compare how well Google Maps via a mobile browser works compared with the native app: the native app is faster to load and move and easier to interact with, and generally performs better with complex tasks such as directions. BEST EXPERIENCE. User experience is key to keeping users happy. Native apps