Return

As explained in BDD in Action, Second Edition

Return is a Pirate Metric measuring the financial or broader ecosystem benefits generated by customers and their activity.

Return is the fifth Pirate Metric in AARRR. It asks what tangible benefits customers and other ecosystem actors generate, rather than stopping at acquisition, activation, retention, or referral. section 4.4.1

Measure return by considering both direct value and broader ecosystem contribution:

• Track direct financial value, such as sales revenue generated by business flyers. section 4.4.3
• Look beyond immediate sales when ecosystem growth can create value for the organization. section 4.4.3
• Choose a measurable indicator for the proposed value exchange, such as the market value of equity received. section 4.4.3

Flights exchanged for startup equity

A business-flight service could offer limited-budget startups free or discounted flights in exchange for equity. Startups gain travel capabilities and access to potential business contacts; the service measures return by tracking the market value of the equity it receives. section 4.4.3

Figure 4.11 What can you do to encourage or allow the stakeholders to modify their behavior to help achieve the business goal?

Use the Pirate Metrics figure to place Return alongside Acquisition, Activation, Retention, and Referral when connecting stakeholder behavior to business goals. section 4.4.1

How BDD in Action, Second Edition covers it

How deep it goes

Defines direct and broader return, then illustrates revenue and equity measures without prescribing a general calculation method.

Examples

Uses business-flyer sales revenue and startup flights exchanged for equity as concrete return measures.

What it assumes

Assumes the AARRR metric sequence and distinguishes Return from acquisition, activation, retention, and referral.

What you can do after

Evaluate/understand direct revenue and broader ecosystem returns when identifying measures for a business idea.

How it connects

Connects Return to Pirate Metrics, ecosystem growth, stakeholder behavior, and business goals.

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Related concepts

• pirate metricspart of · Pirate metrics, also called AARRR, are a startup and product measurement framework organized around acquisition, activation, retention, revenue, and referral.
• dollar-weighted returnincludes · A dollar-weighted return is an investment return that accounts for the timing and amount of external cash flows, commonly through an internal-rate-of-return calculation.
• time-weighted returnincludes · A time-weighted return is an investment return calculated by linking subperiod returns between external cash flows so that the timing and size of investor contributions do not determine the result.

This explainer was generated by Manning's knowledge graph from the text of BDD in Action, Second Edition. The section links point to the parts of the book it draws on.