Cohort Analysis

What is Cohort Analysis?

• A metrics analysis technique
• Look of metrics of separate groups of users or customers
• Surgically measure the impact of changes, pivots, and experiments

Role in a startup

• Just another tool
• Key to avoiding vanity metrics and devloping actionable metrics
• Look at the lifetime a customer and identify key stages
• Make sure the stages can be measured and are associated with a specific user
• Make sure that they are meaninful to the business and the engine of growth
• Measure a baseline with current product
• Changes can now be measured to see if they had desired impact

Step-by-step:

1. Identify key stages of relatioship with customer, e.g. Register, Activate, Retain, Refer, Pay, Cancel
2. Measure customers at each stage
3. Analyze impact on financial model

Simple example (on whiteboard)

• Micro-Instagram
  • Install app
  • Create an account
  • Activate account
  • Post a photo

More detailed example

• Review Engine of Growth Example