Evaluating Execution Frameworks Part 1

Diana Yau’s Execution Framework

General Rule:

• Understand the value of both sides

• Impactful metrics

• Know how to think (not just memorized)

Testing Product Thinking

The Prompt: How to measure success for Airbnb

Framework Tested:

Part 1: Key Fundamentals

• Product: Platform to rent a place to stay

• Users: Guests & Hosts

• Value: Marketplace helps Guests, Hosts & Platform (airbnb)

Part 2: North Star Metric

• intersection of the values

  • intersection = bookings

• Total # of night’s booked

  • ‘# nights booked good for host & airbnb

Part 3: Break Down the North Star

• Total # of nights booked

  • Total # of active guests * # of nights booked per guest

  • ‘# active listings > # of active hosts > # bookings per host

  • ‘# views of listings

  • ‘# of confirmed bookings

  • ‘# of cancelled bookings

  • # of active hosts > # of new hosts + existing + reserrected - churn

• Healthy Ecosystem

  • macro & micro supply geater than demand by X:Y ratio

  • Quality Supply

  • Growing Demand from word of mouth

Part 4: Trade offs & Counter Metrics

• Trade offs

  • hosts w/1 listing vs commerical hosts with multiple listings

• Counter Metrics

  • avoid gaming

  • ‘# of listings with < 4 star reviews

  • ‘# reported listings (fraud or low quality)

Problems with common frameworks : Doesn’t show how you think.

• Revenue - If not solving for users

• Growth - not always right. If not taking the right action to monetize

• Pirate AARRR - Awarness | Aquisition | Retention | Revenue | Referral

Source: Diana Yao