Pirate Metrics (AARRR)
Acquisition, Activation, Retention, Revenue, Referral.
Explanation
Created by startup investor Dave McClure, this framework helps you diagnose where your growth is breaking down. Unlike a simple sales funnel, it includes the viral loop where happy customers refer others. Each stage requires different strategies and metrics. The key insight: most companies focus on getting more customers when they should focus on keeping the ones they have.
Real-World Example
SaaS with 10K visitors, 1K signups, 100 activated, 10 retained, 5 paying, 1 referring. Biggest drop: Signup → Activation (10%). Fix onboarding before driving more traffic. Another: Great retention, no referral. Add sharing features before paid acquisition.
How to Apply
Define metrics: Acquisition (visitors), Activation (aha moment reached), Retention (still active after X days), Revenue (paying), Referral (invited others). Measure conversion between stages. Find biggest drop-off. Focus there for 1-2 months. Only move on when improved.