{"id":5893,"date":"2015-03-23T09:45:38","date_gmt":"2015-03-23T09:45:38","guid":{"rendered":"http:\/\/jrierac.diviagency.org\/?p=5893"},"modified":"2018-11-15T13:30:17","modified_gmt":"2018-11-15T13:30:17","slug":"innovation-accounting","status":"publish","type":"post","link":"https:\/\/www.activede.com\/en\/innovation-accounting\/","title":{"rendered":"Innovation Accounting"},"content":{"rendered":"

\u201cThe quickest path to a fast-growing company is through efficient leadership and constant evaluation of your goals<\/em>\u201d Eric Ries, author of the Lean Start-up.<\/p>\n

Nowadays the biggest challenge innovators are facing is to demonstrate that the activities that are being performed at microscale will sustain growth consistently. Imagine what would happen if you\u2019re an investor and I come to you and say \u201cHey look, I\u2019m in a viral business. I only have a few thousand costumers but I have empirical data about what is really working and what is not. The data says we are in the right path. So, if you give me resources we will be able to pass the threshold and make a lot of money\u201d.<\/p>\n

Innovators are currently evaluated based on a plan. If they are below the plan they are performing bad, in contrast, if they are delivering faster than what was planned they are performing extremely good. But the question is, what if the plan leads to nowhere? That kind of accounting based on a plan is from the past century, we now need other metrics to measure innovation. Here\u2019s how:<\/p>\n

1 \u2013 Establish a standard measure of progress<\/h3>\n

Let\u2019s use as an example that you are developing an App that will allow expats to meet with other expats that are currently living in the same city.<\/p>\n

ACQUISITION<\/strong>\u00a0\u2013 How do users find you? What\u2019s the percentage of users who see your ad and visit your website?<\/p>\n

ACTIVATION<\/strong>\u00a0\u2013 Do users have a great experience? What\u2019s the percentage of users that, for example, are logging in to your platform. How much time do they spend in the platform? Are they behaving the way you expected?<\/p>\n

RETENTION<\/strong>\u00a0\u2013 Do users come back? YES! Ok, do you know what essential feature is calling them back? If you\u2019re not able to answer this question you\u2019re in trouble because you don\u2019t know which are the roots of your success. Therefore you don\u2019t know what features you need to develop to keep growing.<\/p>\n

REVENUE<\/strong>\u00a0\u2013 How do you make money? What is the percentage of users who are currently paying to use your platform?<\/p>\n

REFERRAL<\/strong>\u00a0\u2013 Do users tell others? That is critical. If users are not referring your platform you will be stuck in the land of the living dead. You are making some money, achieving some growth but actually growing way below your expectations.<\/p>\n

How do I know what is working and what is not? By experimenting. By performing A\/B split tests and by tracking the results of that experiments. Experiment 1 might have features A, B, C and experiment 2 features B, C and D. If the activation rate and retention of experiment 2 is higher than that of experiment 1 then you just discovered that feature D is essential to your platform.<\/p>\n

2 \u2013 Measure everything as a cohort<\/h3>\n

That is a crucial thing to do. You need to track the results of each experiment by cohorts (Independent groups of people) to see whether the metrics you are evaluating are increasing or decreasing over time. Accumulated metrics can lead to misunderstand what is really going on. I won\u2019t invest money if someone approaches me and says: \u201cI have 2000 users in my platform\u201d My answer will be, so what? Can you demonstrate me that you\u2019re in the right path?<\/p>\n

On the other hand, if someone comes and shows you 1) A clear tracking of insightful baseline metrics with a positive tendency 2) The hypothesis that needed to be validated and 3) A set of experiments performed in order to test that hypothesis\u2026 What would be your reaction?<\/p>\n<\/div><\/section><\/div>\n","protected":false},"excerpt":{"rendered":"","protected":false},"author":6,"featured_media":9259,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"image","meta":{"_acf_changed":false,"footnotes":""},"categories":[407,426],"tags":[211,212,213,214,215],"acf":[],"yoast_head":"\nInnovation Accounting - Active Development<\/title>\n<meta name=\"description\" content=\"The biggest challenge innovators are facing is to demonstrate that the activities that are being performed at microscale will sustain growth consistently.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.activede.com\/en\/innovation-accounting\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Innovation Accounting - Active Development\" \/>\n<meta property=\"og:description\" content=\"The biggest challenge innovators are facing is to demonstrate that the activities that are being performed at microscale will sustain growth consistently.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.activede.com\/en\/innovation-accounting\/\" \/>\n<meta property=\"og:site_name\" content=\"Active Development\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/Active.Development\" \/>\n<meta property=\"article:published_time\" content=\"2015-03-23T09:45:38+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2018-11-15T13:30:17+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.activede.com\/wp-content\/uploads\/2015\/03\/innovation_accounting.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"700\" \/>\n\t<meta property=\"og:image:height\" content=\"350\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@ActiveDe\" \/>\n<meta name=\"twitter:site\" content=\"@ActiveDe\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Jordi Riera\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Organization\",\"@id\":\"https:\/\/www.activede.com\/ca\/#organization\",\"name\":\"ACTIVE DEVELOPMENT\",\"url\":\"https:\/\/www.activede.com\/ca\/\",\"sameAs\":[\"https:\/\/www.facebook.com\/Active.Development\",\"https:\/\/www.linkedin.com\/company\/999561?trk=tyah&amp;trkInfo=tarId:1419004716750,tas:active development,idx:2-1-3\",\"http:\/\/www.youtube.com\/user\/ActiveDevelopment\",\"https:\/\/twitter.com\/ActiveDe\"],\"logo\":{\"@type\":\"ImageObject\",\"@id\":\"https:\/\/www.activede.com\/ca\/#logo\",\"inLanguage\":\"en-US\",\"url\":\"https:\/\/www.activede.com\/wp-content\/uploads\/2018\/10\/logoAD-min.png\",\"contentUrl\":\"https:\/\/www.activede.com\/wp-content\/uploads\/2018\/10\/logoAD-min.png\",\"width\":225,\"height\":51,\"caption\":\"ACTIVE DEVELOPMENT\"},\"image\":{\"@id\":\"https:\/\/www.activede.com\/ca\/#logo\"}},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/www.activede.com\/ca\/#website\",\"url\":\"https:\/\/www.activede.com\/ca\/\",\"name\":\"Active Development\",\"description\":\"\",\"publisher\":{\"@id\":\"https:\/\/www.activede.com\/ca\/#organization\"},\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/www.activede.com\/ca\/?s={search_term_string}\"},\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en-US\"},{\"@type\":\"ImageObject\",\"@id\":\"https:\/\/www.activede.com\/en\/innovation-accounting\/#primaryimage\",\"inLanguage\":\"en-US\",\"url\":\"https:\/\/www.activede.com\/wp-content\/uploads\/2015\/03\/innovation_accounting.jpg\",\"contentUrl\":\"https:\/\/www.activede.com\/wp-content\/uploads\/2015\/03\/innovation_accounting.jpg\",\"width\":700,\"height\":350},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.activede.com\/en\/innovation-accounting\/#webpage\",\"url\":\"https:\/\/www.activede.com\/en\/innovation-accounting\/\",\"name\":\"Innovation Accounting - 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