KPIs: two-sided marketplace growth
In Australia, about 65% of households share one common problem: finding a safe, loving and affordable space for household pets to be boarded and cared for while families go on holiday.
Mad Paws, founded five year ago, solves that problem with a two-sided marketplace described by Australian media as the “Airbnb for pets.” Along with affordable pet boarding provided by insured pet sitters, Mad Paws provides other services for pet owners such as dog walking and pet sitting.
In our latest installment of the Metrics That Matter series, we talk to the founder and CEO at Mad Paws, Alexis Soulopoulos, and Head of Marketing Karim Mouahbi to learn more about:
- How data analysis helped solve a liquidity problem.
- How Mad Paws uses analytics to learn more about their business and woo investors.
- How Mad Paws uses Mixpanel to synchronize decision-making when things go wrong.
- How Mad Paws used Mixpanel to identify a key marketing window of opportunity.
Mixpanel: How did Mad Paws first start to build out its two-sided marketplace?
Soulopoulos: When we first started out, we built an MVP website in about two and a half months. Our first pet sitters were vet students from the University of Sydney because, of course, they all love pets and they all have some spare time and an interest in making money. We staged such a strong launch that the news started picking up the Mad Paws story and we were hailed by Australian media as “Airbnb for pets.”
That gave us a good boost, but shortly thereafter we ran into a problem: all the PR attention created a ton of demand through the website, but supply wasn’t connecting with that demand.
This is known as a “liquidity issue,” and it all comes down to building demand and supply at the same time. Mixpanel gave us a granular view of the funnel, and being close to the metrics helped us solve that problem. The analytics told us that pet sitters were being unresponsive, which made sense because we signed them up long before the surge in interest. By the time they got their first booking inquiry through our marketing efforts, they were already disengaged. We solved that problem right away by personally calling up all our pet sitters and all our pet owners and, eventually, by building a smart notification system to connect pet owners and pet sitters.
Mixpanel: Can you speak about how, as a start-up, you use data to attract investors?
Soulopoulos: Right now, we’re in the process of completing a capital raise. That means meeting potential investors and existing shareholders, telling the Mad Paws story. The best way to get investment is by having an awesome business to present. Investors are very good at looking at the underlying metrics and asking about those. Every time we go through an investment round, we learn more about the business because we get the opportunity to look at it from different perspectives. From a data point of view, we come out of it with new reports and new ways to think about future growth.
Mixpanel: What percentage of your day do you spend on analytics reporting?
Mouahbi: The beautiful thing about Mixpanel is it’s a visualization dashboard, and there’s not too much extra that needs to be done. So, luckily, I don’t have to spend too much of my time on analytics and crunching numbers and so forth because Mixpanel’s integration with Segment allows everything to be beautifully presented in the one space.
I check it all the time, every day. It’s the immediate access between me and my KPIs. The thing I love most about it is when something’s wrong. There’ve been a few situations where Alexis and I have simultaneously contacted somebody within our department who’s responsible for a specific KPI because the Mixpanel app allows us to be synchronized. It also gives us our trend lines, an index and baseline based on last week. So, yeah, it’s my favorite app.
Mixpanel: Let’s look at your dashboard. What metrics do you use? What’s your key focus metric?
Mouahbi: Our key focus metric is the number of bookings per customer. This is how we track how well we’re doing as well as our year-on-year growth rate. That said, if we watch only this north star metric, it’s already too late.
Our other key metrics for growth are:
- Booking requests
- User signups
- Pet sitter signups
- Conversion rate
- Booking requests spread out by new and existing customers
- Payments spread out by new and existing customers
We also need to watch leading metrics, metrics that will predict future growth. For us, leading metrics are the supply-side metrics about our pet sitters:
- How long does it take for a new pet sitter to receive their first booking request? We have KPIs there because we know if they receive that first booking quickly, the pet sitter will be highly engaged for the future.
- Customer satisfaction: We conduct surveys and net promoter scores, as well, which we also deem to be future predictors of word-of-mouth spread.
Mixpanel: How have these metrics changed over time?
Soulopoulos: They have changed significantly because we’ve been focusing on them. Nothing moves until you start measuring it, make action plans, continue measuring it, and obsess about it. This is why our key focus metric–the number of bookings per customer–continues to show such exponential growth.
Mouahbi: To start off with, we watched the early traction (like user signups). Eventually, we had to convert those user signups, so for about two years we focused on measuring our conversion rate from booking inquiry into payment. As we moved forward, we decided to focus on overall gross merchandise volume (GMV) marketplace revenue. Then we realized that there’s a difference between new customers, repeat customers, and the number of bookings per customer–and that became our north star metric.
Mixpanel: How do you communicate these metrics across your team and across your organization?
Soulopoulos: We set the company OKRs (objectives and key results), which involve a lot of the metrics that we discussed above. Those OKRs translate into more and more granular metrics. Everyone in the company knows at all times the most important set of metrics that we’re going to try and implement as a company, as a team, during this quarter. They also focus on how their department’s collaboration with other teams impacts these metrics, and how they themselves specifically, within their line job or responsibilities, can impact these metrics and the sub-metrics that ladder up to them.
Mixpanel: What’s different about tracking metrics in this industry compared to other companies that you’ve worked at?
Mouahbi: I used to work in eCommerce. Customers wanted seamless technology and an amazing shopping experience. Customer satisfaction was based on the efficiency of the website platform and the logistics team. The KPI of acquisition was easy because we could see customers were happy with the product.
I also spent time working for a food delivery marketplace. Customers already knew what they wanted and they knew what they liked–including convenience.
There, it was more about the relationship that customers had with an existing restaurant.
In terms of Mad Paws, pets are children in Australia. That brings emotions strongly into play; you can’t measure customer satisfaction solely on how quickly somebody converts in a funnel. We’re the matchmaker between pet owner and pet sitter, so we want to look at metrics where people are reviewing the pet sitter and our product. We want to make sure that pet sitters on our platform are loyal to us, that they’re going to provide the right service based on our standards and won’t lead to churn.
We also have to be able to see if someone on the supply side (i.e., a pet sitter) is trying to take the booking offline–something you don’t have to worry about in e-commerce or food delivery. Metrics that might tell us that include whether or not a pet sitter has a high number of bookings with a low number of those being repeat customers. This would mean that that person is acquiring a lot of customers–essentially using Mad Paws as a lead generation tool for their own pet sitting business–and then keeping the business, taking cash payments offline.
Mixpanel: What data trends have made you change something recently?
Soulopoulos: We looked at the cohorts and retention behavior for our dog-walking customers, and we saw very clearly that, if a customer does not come back within the first 30 days to make a second booking, it is 80-90% unlikely that we will see them a second time. We have a 30-day window of opportunity to convert a dog-walking customer into a recurring customer with high lifetime value. Given that it appeared so consistently in the data, we have adapted our marketing strategy to be very targeted within that first 30-day window.