Indicadores: performance indicators for two-sided networks (a template)
Updated on Mar 14, 2021
Atwo-sided network enables value-creating interactions between external producers and consumers. Over the years, I’ve not only co-founded several including Voice123, Bunny Studio, and Torre but I’ve also invested in many more. As a result, the associated teams and I built a template of the most important metrics for two-sided networks in both early and growth stages. Today, we’d like to share it with all of you — and you can customize it for your own network. We call this template Indicadores.
The key performance indicators (KPIs)
To make it easier for the team to pursue a common goal, it’s important to have a few key performance indicators. For two-sided networks, this indicator is the core interaction. Platform Revolution defines core interaction as “the single most important form of activity that takes place on a [two-sided network] — the exchange of value that attracts most users to the platform in the first place.”
In the case of Airbnb, the core interaction is nights booked. For Uber and Lyft, it’s likely to be rides completed. In the case of Bunny Studio., where we sell voice over recordings, translations, and other creative services, the core interaction is projects fulfilled.
Ideally, KPIs are shared with the team every day.
Additional performance indicators (PIs)
While KPIs are important, two-sided networks require many things to occur successfully for the core interactions to grow. Two-sided networks are like a plane; they require the constant monitoring of multiple factors to ensure the plane won’t crash. CEOs and product managers must review these metrics regularly (ideally, weekly) and look for ways to improve them.
Two-sided networks tend to have two types of users: producers and consumers (of course, on some networks, producers can be consumers and vice versa). You should have performance indicators for each type of user at each stage of their lifecycle:
Metrics for consumers
Overall:
- Funnel analysis per cohort (learn more)
Awareness stage:
- Top-of-mind percentage (learn more)
Acquisition stage:
- New consumer registrations per channel
- Newly-retained consumers per channel
Activation stage:
- Consumer acquisition and activation cost
- Average # of core interactions for new consumers
- Time to core interaction for new consumers
- The success rate of the core interaction’s first attempt
Revenue stage:
- Revenue
- Lifetime value (LTV) (learn more)
Retention stage:
- Searches (or equivalent)
- Average core interactions per cohort
- % of searches (or equivalent) that result in a click through for existing consumers
- For returning consumers, successful core interactions
- For existing consumers, % of core interactions that result in success
- Unique consumers having core interactions
- Engagement per visit (measured in either core interactions or time spent)
- Percentage of active consumers
- Churn per cohort (learn more here and here)
Referral stage:
- K-factor for attracting other consumers (learn more)
- K-factor for attracting producers
- Net Promoter Score (NPS) (learn more)
Metrics for producers
Overall:
- Funnel analysis per cohort (learn more)
Awareness stage:
- Top-of-mind percentage (learn more)
Acquisition stage:
- New producer registrations per channel
- Newly-retained producers per channel
Activation stage:
- Producer acquisition and activation cost
- Average # of core interactions for new producers
- Time to core interaction for new producers
- % of new listings that lead to core interactions within a given period
Revenue stage:
- Revenue
- Lifetime value (LTV) (learn more)
Retention stage:
- Listings (or equivalent) created
- Average core interactions per cohort
- % of existing listings that lead to core interactions
- Unique producers having core interactions
- Engagement per visit (measured in either core interactions or time spent)
- Percentage of active producers
- Churn per cohort (learn more here and here)
Referral stage:
- K-factor for attracting other producers (learn more)
- K-factor for attracting consumers
- Net Promoter Score (NPS) (learn more)
Metrics (performance indicators) for job-related networks
Job-related networks have a set of unique challenges. The distinction between producer and consumer and between offer and demand is difficult to make. Is the consumer the person looking for candidates (talent seeker) or the candidate looking for opportunities (opportunity seeker)? Is the item being consumed the candidate profiles or the job opportunities? If one follows the money, it may be argued that demand consists of talent seekers and offer consists of the opportunity seeker. However, professionals in high demand can wait for talent seekers to submit offers for them to consider. This is the case for many software engineers in LinkedIn and celebrity voice actors in Voice123 (a network that matches clients with voice actors). Because of this, on job-related networks, there are two common ways of connecting the two sides:
- By enabling talent seekers to post opportunities and letting opportunity seekers show their interest.
- By granting talent seekers access to a database of talent and contacting the opportunity seekers individually.
A job-related network may be considered the combination of two networks and will thus need twice as many metrics:
- Network 1:
- KPI: Opportunities posted and fulfilled
- Performance indicators for talent seekers posting opportunities (acting as producers)
- Performance indicators for opportunity seekers observing posted opportunities (acting as consumers) - Network 2:
- KPI: Searches fulfilled
- Performance indicators for talent seekers searching for talent (acting as consumers)
- Performance indicators for opportunity seekers open to being found in searches (acting as producers)
To make matters even more complex, job-related networks may offer value in a third way: by allowing users to create and manage their profiles (Torre, Voice123, etc.). In this case, one type of user creates a profile and another type of user — already aware of the existence of the person — ‘consumes’ the profile to learn more about the user. For example, a person knows a popular voice actor, searches for him or her in Voice123, finds the profile, and ‘sees’ it. Note that in this case, the network isn’t performing any significant matching. However, it makes it easier for the voice actor to deliver information to the person and for that person to learn information about the voice actor.
A job-related network may, therefore, need a third set of metrics:
- Network 3:
- KPI: Profile views
- Performance indicators for profile consumers
- Performance indicators for profile producers
Learn more
To learn more about the topic, have a look at:
- The book Platform Revolution, location 3191
- The book Inspired, location 996
- The customer-lifecycle framework by Dave McClure
Note: Indicadores doesn’t include some metrics that are important for mature two-sided networks. The links above include references to them.
Related frameworks
- Experimento: A practical product management framework
- Usuario: A practical framework for user research and testing
- Prioridad: A practical framework for product and feature prioritization
- Canales: A framework for identifying all client acquisition channels
- And more…
Thanks to Andrés Cajiao, Carel F. Cronje, Daniela Avila, Luisa Moscoso, Nicolás Contreras, Rolf Veldman, and Santiago Jaramillo for reading and commenting on drafts of this article.
