A Deep Dive into Time to Value (TTV)
What is Time to Value? How is it measured? Is it useful to track? (#57)
In recent conversations with portfolio companies the concept of Time to Value (TTV) came up. The question was this, “How quickly do users get value from your product?”
It led to more questions:
How quickly should they get value?
Is TTV the same as Activation?
How is value defined?
How do we know that’s the right definition of value?
Does getting value one time impact anything? How do we know?
Etc.
The short answer to every question is: it depends. But that’s not good enough. 😀
So I dug in.
I put together a detailed survey on TTV and got 79 responses. My goal was to better understand how people think of, track/measure and use TTV. The results are shared below. (Big thank you to everyone that completed the survey, and to Oz Nazilli for helping me craft it!)
Who Completed the Survey
First, let’s dig into the breakdown of respondents…
Company Stage & Employee Size
There were a surprising number of respondents from bigger companies. I’m not sure why that’s the case.
Company Type
The survey got a good variety of company types, recognizing that the options provided may not have covered all potential business models. In the “Other” category there was a mix. For example, one respondent said their business had multiple business models (B2B and B2C). Another was non-profit.
I’m not surprised that B2B SaaS represented the largest number of respondents. If someone selected “B2B SaaS” I asked them an additional question to dig in on the customer type:
For reference on target customers:
Small businesses = 0-100 employees
Medium businesses = 101-1000 employees
Enterprise businesses = 1001+ employees
Understanding Time to Value (TTV)
The first question I asked was simple, “Do you track TTV?”
I wasn’t surprised at this, but a bit disappointed. Only 31.6% track TTV.
Here’s a breakdown by company size (“Not sure” and “What’s TTV?” are included in “No”):
It’s strange that a higher percentage of public companies don’t track TTV. Looking into the responses shows that some of the respondents are working on earlier stage or new products (so perhaps they’re not ready yet) despite the size of their companies.
I looked at the data based on business model as well (again, “What’s TTV?” and “Not Sure” are included in “No”):
The big thing that stands out is the high percentage of B2B2C businesses that don’t track TTV.
Let’s look at some of the reasons why people don’t track it.
The top three reasons (summarized, in part, via ChatGPT) are:
Lack of Knowledge and Methodology: Many respondents are either unfamiliar with TTV or don't know how to effectively measure it. This includes those who were unaware of its importance or existence and those who find it challenging to define or gauge the value delivered by their products or services. (The last part of that sentence is particularly concerning, but speaks to bigger challenges—a fair number of companies aren’t sure of the precise value they provide or how to define it clearly, so measuring TTV becomes impossible.)
Prioritization of Other Metrics: Several companies prioritize different metrics that align more closely with their current goals (or at least they think align better!)
Complexities in Measurement Due to Business Nature: The complexity of measuring TTV varies greatly depending on the nature of the business, customer base, and product or service offered. For instance, in B2B2C models, the value for B2B and B2C segments is tracked differently, making TTV hard to standardize. Similarly, businesses focused on custom development or consulting for large clients find it challenging to measure TTV, as their primary focus is on delivery and customization, not necessarily the value users derive in a measurable time frame.
The most common response was, “don’t know how.” That’s fair, because TTV is hard to figure out. You have to really understand your customer and crystallize a simple enough definition for when they’re getting value from your product.
Compounding the challenge and confusion is whether or not TTV is the same as Activation. Many people define Activation as the first interaction with the product, or taking any action in the product beyond signing up. Some will define Activation as “completing onboarding.” Others will define Activation as “when the user gets value.”
My take:
The definition of Activation isn’t completely clear. If you look it up, you’ll find conflicting answers:
“Activation refers to users taking the desired actions, or next steps, after their first encounter with your company’s product, website, or content.” 1
“Activation occurs when users first achieve the value you promised.” 2
In some cases, people focus more on “the first action(s) a user takes after signing up or becoming aware of your product/service.” In other cases, the focus is on “value” (which again can be tough to define) and ensuring the user has gotten something out of your product (as opposed to just “activated” by taking a step or two).
Now add in another concept, “the AHA moment.”
What is the AHA moment? How do you know? How do you measure it? Is it the same as value creation? Is the AHA moment the end point for TTV? (i.e. once you hit the AHA moment you know the time to value?)
Here’s a detailed guide on the AHA moment from Appcues. As you dig into it you’ll realize just how complicated everything becomes.
They provide an example for an SEO Analytics Tool (B2B SaaS):
The example has 3 AHA moments!
Is this whole journey Activation?
Where would you measure TTV? Is it from the first visit to the product’s on-site demo page to the mini AHA moment? From the time the user signs up for a free trial to the big AHA moment? Something else?
If you define Activation as the whole journey—the user isn’t fully Activated until they go through everything—then you might decide that TTV is the time it takes to get through it all. Or you might decide to track TTV in two stages:
From sign up to the first AHA moment
From the first AHA moment to the big AHA moment
Let’s go back to the survey and see what people had to say.
How respondents defined Time to Value
Most respondents defined TTV as the time it takes to activate and/or for the user to “get value.” That’s not terribly surprising. Examples include:
“Time it takes user to activate. Activation is different for our different categories of users.” - Product Growth, Seed stage startup (B2B SaaS)
“The time between the signup (the user can get value) and the time between a first key action we consider critical to deliver the promise of our application. (the user actually gets value).” - Founder/CEO, Pre-Seed startup (B2B SaaS)
“We define TTV as the time it takes for a customer to see the value of what we offer (how long it takes to reach our aha moments).” - Head of Product, Series A (B2B SaaS)
Several respondents set a very high bar for TTV.
Adam Gellert, CEO at HiredHippo wrote, “Length of time for someone to interview a candidate and time to hire from us.”
Devashish Sharma, Product & Growth Lead at ApplyBoard wrote, “Time taken for a customer to do a repeat purchase. After discovering the product and buying it for the first time, if the customer isn't buying the second time, then they are not realizing the value of it.”
The user/customer journeys for HiredHippo and ApplyBoad in this context don’t follow the simplified pirate metrics model, which is completely fine. It’s a good reminder that businesses can’t be reduced into simplified frameworks.
This is why I always encourage people to map their business as a systems diagram. Going through this exercise will help you define the steps & interactions users and customers take with you, where they get value, how you’ll define the “AHA moments”, where there are trouble spots, etc. Unfortunately, the more concepts that are thrown at you (i.e. AARRR, AHA moments, Time to Value, etc.) the more confusing things get. So you’re better off understanding these basic frameworks and then using what’s important for your specific business.
For example, here’s a deeper dive into B2B SaaS business models:
Importance of TTV
Of those that are tracking TTV, here’s how important they think it is:
Target TTV benchmarks
The survey asked people for their target TTV benchmark and how they decided on that number. Not surprisingly, the answers are all over the place because the respondents are from a wide variety of businesses at numerous stages.
Respondents from later stage companies mentioned that they use data to detect patterns that differentiate retained versus churned customers. This data helps them figure out how quickly retained customers got value, to define the right target benchmarks.
For example, one respondent from a Series A company (50-100 employees) said, “Our TTV is 30 days. We benchmarked our retained customers, did a distribution analysis of their TTV. Compared to churned customers for landing on what we think is the right benchmark.”
Another respondent, from a Series B company wrote, “We measured the time it takes in our platform and anecdotally the time it takes on competitors platforms, and from there, we set a target to continually lower the time to value for each persona.” Clearly it helps to have data already, but I also find it interesting that they measure their own TTV against competitors and consider a faster TTV as a competitive advantage.
Many respondents had a TTV benchmark that was very fast—1 to 7 days. This aligns with how people define TTV: the time it takes to ‘Activate’ (“Activate” often meaning taking any action). But it’s also clear that people recognize the importance of delivering value quickly.
Recent TTV experiments
The survey asked if respondents had recently experimented or worked to improve TTV. There were about 10 responses to this question.
Two themes emerged from the experiments that people are running: (1) speeding things up and (2) using AI.
“Shortened onboarding friction, added guidance inside the product (i.e. notifications, user patterns, tutorials) and outside the product (i.e. email, support articles, YouTube videos) to automate some parts of setup” - Product Manager, public company
“Yes, AI powered recommendations of issues that should be resolvable within 30 days. Major improvement in TTV.” - VP Product, Series A company
The use of AI to automate things is a huge and important trend. It’s reasonable to assume in most cases that reducing TTV through automation is a good thing. It may not be in all cases (i.e. high-touch / complex products where there’s an expectation of human / direct service). But generally, faster time to value is a good thing, and AI should deliver that.
A third theme that came out is around the use of data to better understand value creation and compare retained versus churned users.
“We've put a lot of focus on better understanding the in app usage behavior of happy vs churned customers. Have been surprised by obvious clear differences so trying to tune the implementation and enablement process to skew to happy usage pattern and also refine UX to reflect that in the longer term” - SVP, Series A company
“Right now we are trying to understand exactly how our customers are using our product, what is the main VALUE and then tracking how quickly we can get customers to see that.” - Product Manager, Series C+ company
I’ve always believed you can learn a ton from your “best users”—the ones that use your product the most, tell others about it, etc. If you can figure out what makes them tick, you may be able to (a) find more of them; and (b) figure out if there’s a way to convert others into them.
You can build a better product through your best users:
Additional comments on TTV
The last question was open-ended and asked, “Anything else you’d like to share?” Here are some of the interesting answers:
“In my experience, companies generally focus on time to activation vs TTV. The two metrics should ideally be the same (leading indicator of retention), but often companies will focus on less important activations (such as sign-ups) which may not represent value from the customer's perspective. An understanding of what is value to the customer and how your business' TTV compares to competitors should be a primary consideration.” - Adam Bernstein, Lead Product Manager, Hopper
“As we have primarily enterprise clients, they're not expecting an incredibly short TTV - we have to move at their pace. So our goal hasn't exclusively been to shorten the number of days, but also we've been trying to reduce the effort required during that window of time for both the client and us. We haven't been directly measuring 'hours spent' on our side, but we have seen our Implementation Managers able to manage more programs simultaneously - an indirect measure that we're making progress.” - VP, Customer Success, Series A startup (selling to enterprise)
“I think it's a useful metric, but likely difficult to apply in the real world - mostly b/c the stakeholders in the customer organization don't have full visibility on value creation. For instance, if a platform offers marketing products to B2B businesses, their marketing teams often focus on collecting leads or raising brand awareness. The actual value generation happens on the sales side, but very few businesses are able to connect the dots.” - Group PM, Series C+ company (selling to enterprise)
“I'm curious how you and other companies are going to define ‘time.’ In B2B non-PLG, there's a sales process, onboarding etc so ‘number of sessions before activation’ could be more interesting than ‘calendar days before activation’. Also with enterprise software, expectation of activation could be different depending on a user's function / role. So tracking activation at an **account** level may be a more important metric than user level.” - Josh Koopferstock, Staff PM at Noibu (previously at Calixa, Shopify, Benevity)
Final thoughts on TTV
No surprise, it’s complicated. Looking at the responses provided, here are some final thoughts on Time to Value:
1. Defining “value” is still a problem.
Perhaps this is THE PROBLEM. Some respondents had very clear definitions of “value” (i.e. they knew when a user/customer got value), but others did not.
If you can’t define value, you can’t measure how long it takes to get there.
If you can’t measure how long it takes to get there, you can’t know if you’re doing a good or bad job (at creating value).
2. Activation + AHA Moments + TTV = holy shit.
You can get lost in the frameworks and definitions. It’s easy to over-complicate, track too many loosely-defined things and get lost. The survey did not solve any of these definition problems perfectly, but here’s my take:
Activation = The journey between the first action a user takes beyond onboarding (IMO, Acquisition ends when they’ve onboarded) and value creation. Activation is a funnel from the initial activation to the point where you’re confident the user will stick around. It’s measured as % Activated Users, but the definition of when you take that measurement is unclear. If you take it at the first action it’ll certainly be a higher % than if you measure it after they take multiple actions. I wouldn’t rush to declare successful activation too early; there’s a chance that the drop-off to Retained Users is very high, which won’t look good. That’s why I’d think of this as a funnel, even going so far as to suggest that the “final % Activated Users” = the “first % Retained Users.”
AHA moments = Specific points in time when you know a user gets value. You know this qualitatively (b/c you’re actively talking to users) and quantitatively (b/c a high % of users that get to an AHA moment keep using the product/doing stuff). There could be multiple AHA moments, and one of them may signal the end of Activation (but not necessarily). This will depend entirely on your product and business model.
TTV = The time it takes for a user to fully activate in your product. This is a simple way to think about it. First define Activation. Then the time it takes from the end of Acquisition to the end of Activation is TTV. In a previous visual, I put TTV across Activation and Retention, but that makes things more nebulous, although I think it’s right. It comes down to how you define Activation. If you define it as taking a bunch of actions in your product, coming back X times, it starts to look like retention.
This is still overly simplified, but hopefully helpful:
3. Experiment on Activation & TTV using AHA Moments (and other things)
You can and should run experiments on all three key concepts:
Can you activate a higher percentage of users? Doing so reduces drop-off after you’ve acquired a user and should lead to more users retaining (which drives more revenue).
Can you activate users faster? Doing so should increase the % of users that activate, because they’re getting value faster. But you should double check this; there’s a chance you rush people through activation and they get frustrated / churn out. So don’t assume faster = better.
You can test both of these in a variety of ways:
Create better / more / earlier AHA moments
Reduce friction (or increase friction?)
Provide more support — Maybe your users want a bit more handholding? Maybe try calling them. (Think: Product-Led Sales)
Identify what your best customers did during Activation and encourage more users to do those things (faster?)
Improve onboarding — If you onboard more users successfully you have a bigger pool of people to try and activate; maybe the problem is in Acquisition not Activation.
4. Your business is a system, you need to understand it
I’ve already made this point, but it’s important to repeat. Businesses are different but they follow patterns and motions. There are commonalities between businesses that you can use and reference. Don’t think of your business as a unique snowflake. At the same time, “B2B SaaS” barely means anything. There are too many variables to blindly follow a framework or strategy.
Map your business. Define how it works and all of the customer touch points.
Figure out the metrics you want to track, their definitions and what you want to focus on (you can’t focus on everything at once).
Make sure everyone in your company understands the systems diagram of your business and where you want people to focus
Run rigorous experiments and learn—quickly
Rinse and repeat
https://www.productplan.com/glossary/aarrr-framework/
https://www.appcues.com/blog/pirate-metric-saas-growth
Ben,
Do you have a post or thoughts on continued Value inside Retention? (Or is there a more appropriate term for this which I don't know about?)
In my previous role, customers often had long gaps between logins because they didn't need to continually access the platform. They came in, found what they wanted, then left for a few weeks or months to do their work. I felt that it was important to remind customers when they returned of previously discovered value to support subscription renewals but found it hard to get support for this idea.
Mike