Pirate Metrics – AARRR

What are the Pirate Metrics?

AARRR metrics, also known as the Pirate Metrics, is a framework for measuring the success of a startup or product. It was developed by Dave McClure, the founder of 500 Startups, and consists of five key metrics: acquisition, activation, retention, referral, and revenue. These metrics are intended to help startups track their growth and understand their customers’ behavior, as well as identify areas for improvement.

Acquisition refers to the number of people who discover and start using your product. This could be through various channels such as paid advertising, organic search, or referrals from existing customers. It’s important to track acquisition metrics because they help you understand how effective your marketing efforts are at bringing in new users.

Activation refers to the percentage of new users who successfully complete their first key action, such as setting up an account or completing a purchase. This metric is important because it helps you understand how well your product is meeting the needs of new users and whether they are likely to continue using it.

Retention refers to the percentage of users who continue using your product over time. This is a key metric because it’s much more cost-effective to retain existing customers than to acquire new ones. Tracking retention metrics can help you identify what features or aspects of your product are most valuable to users, and help you focus on improving those areas.

Referral refers to the percentage of users who refer others to your product. This is an important metric because referrals can be a powerful source of growth for a startup. By tracking referral metrics, you can understand what factors are most likely to drive users to refer others to your product and focus on those aspects.

Revenue refers to the money that your product generates. This is the ultimate metric that all startups are aiming for, and it’s important to track revenue metrics in order to understand how well your product is performing financially.

AARRR metrics are most useful for startups and products that are focused on growth. They provide a clear and simple framework for tracking key metrics and understanding customer behavior, and can help startups identify areas for improvement and focus their efforts on driving growth.

Examples for Pirate metrics in companies

Examples of companies that have used AARRR metrics to drive growth include Slack, which used the framework to track the number of new users that were acquired through various channels and the percentage of users who continued using the product over time.

Another example is Airbnb, which used AARRR metrics to track the number of new users that were acquired through various channels, the percentage of users who completed their first booking, and the percentage of users who continued to use the platform over time.

Key Takeaways

In conclusion, AARRR metrics are a useful framework for measuring the success of a startup or product, particularly for those that are focused on growth. However, they should be used in conjunction with other metrics and data to get a complete understanding of a product’s performance, and may not be suitable for every type of business or product.

Sources and further reading