blog overview
Romek Jansen, 14 Mar '16

AARRR Pirate Metrics for Startups - How to Grow Revenue

Supercharge the bottom of your funnel and drive revenue using Pirate Metrics. If users like what you TELL and like what you SELL, you hit the jackpot.

Let me first introduce the captain of the Pirate ship

Pirate Metrics were introduced by Dave McClure in 2007. They are designed for startup founders who want to take action on their key metrics. The metrics have become popular quickly and have been applied to many startups all over the world.

For an in-depth explanation on the concept I recommend viewing this Slide deck which is the original presentation that got the Startup Metrics for Pirates movement going. If you are able to get over the initial PowerPoint layout shock, you will find invaluable insights.

If you only have 1:40 to spend, then watch this animation with Dave’s voice-over.

The metrics help startups to understand customer behavior in 5 different journey stages. I added my own descriptions to the five stages. They are even more simplified than the original.

Acquisition - The user finds you

Activation - The user interacts with you

Retention - The user likes you

Referral - The user recommends you

Revenue - The user pays you

Take the first letter of every stage and … “AARRR”, here you have the Startup Metrics for Pirates.

Pirate Metrics Startup Jackpot 1

Our first steps with Pirate Metrics

When we applied the Pirate Metrics to our own business it triggered a string of interesting questions. Most were about which KPIs to use and the position of the Referral stage. Do people refer you to others even before they paid for your tool or service? That sounds awkward.

Doing a quick online search on how people applied the AARRR metrics themselves, you will see that multiple companies switched the Referral and Revenue stages to fit their needs.

Both options can be right. It just depends on whether you look at it as a content referral or product referral. We called these two distinct flavors of Referrals “Jackpot Moments”. If the conversion on these two kinds of Referrals reaches a certain threshold, success will multiply fast.

We called the two different kinds of Referrals:

Jackpot moment #1: I like what you TELL

Jackpot moment #2: I like what you SELL

Pirate Metrics Startup Jackpot 2

I like what you Tell.

With a content Referral the user tells his network: “You should see this content”.

If you create interesting and valuable content, users will forward, like, share etc. with peers, and drive new traffic towards the Acquisition Stage. Hopefully the new users like the content too and you are able to guide them through the next content journey stages.

To drive new users towards a content Referral you might have to motivate them to “Activate” the relationship by joining a community, signing up for a newsletter or following you on Twitter, LinkedIn, Facebook etc.

Right after that follows the Content Retention stage, which is all about the interaction of the user with the content, measured in Views, CTR, time spent etc. You probably need to install notifications, reminders and other incentives just to encourage content retention.

If users love your content, and feel comfortable and confident it will not damage their “personal brand”, they might refer your content to others. And the content referral cycle starts all over for the new visitor.

I like what you Sell.

With a product Referral the user tells his network: “You should try this product”.

If you create a product that offers real value, people probably want to share the benefits with others. An invitation to colleagues or friends to join the tool or a reference to a product trial skips the Acquisition stage and lets users go to the Activation stage directly.

You just motivated a new product user to skip the entire first stage with one of the most challenging conversion rates. How great is that!

In this product referral track you also need to motivate trial users to go into the next journey stage. The product Retention stage is all about onboarding, tutorials and making the new tool a habit before the trial period is over.

If users love your product, and feel comfortable and confident it will not damage their “personal brand”, they might refer your product to others. And the product referral cycle starts all over for the new user.

The slow track and the fast track

You could even say there is a Content Journey and a Product Journey. We called them the slow track (content) and the fast track (product). The term “fast” relates to the relative distance to the Revenue stage.

Pirate Metrics Startup Jackpot 4

For the Product journey we decided to switch the Revenue and Product referral stage. For the content journey we even completely removed the Revenue stage. We believe only a product trial will result in an eventual “Buy”. Even if your business is to sell content (making it your product), there are still two journeys.

At we added this dual Content Referral and Product Referral logic to our own value map.

In our tool our Startup metrics value map looks like this…

Boardview Tree

If you wish to use this specific AARRR business template for managing your own start-up, drop me a message. I can’t wait to learn from your experiences too.