The ultimate guide to A/B testing | Ronny Kohavi (Airbnb, Microsoft, Amazon)
Lenny's Podcast: Product | Growth | Career
Balancing Innovation and Experimentation
This chapter explores the intricacies of balancing experimentation with innovation, particularly through the lens of the Overall Evaluation Criterion (OEC) in A/B testing. It emphasizes the need to optimize for long-term user satisfaction while navigating the trade-offs between immediate revenue and sustainable growth. The discussion highlights the value of incremental changes and data-driven decision-making in redesigning product experiences within organizations.
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Ronny Kohavi, PhD, is a consultant, teacher, and leading expert on the art and science of A/B testing. Previously, Ronny was Vice President and Technical Fellow at Airbnb, Technical Fellow and corporate VP at Microsoft (where he led the Experimentation Platform team), and Director of Data Mining and Personalization at Amazon. He was also honored with a lifetime achievement award by the Experimentation Culture Awards in September 2020 and teaches a popular course on experimentation on Maven. In today’s podcast, we discuss:
• How to foster a culture of experimentation
• How to avoid common pitfalls and misconceptions when running experiments
• His most surprising experiment results
• The critical role of trust in running successful experiments
• When not to A/B test something
• Best practices for helping your tests run faster
• The future of experimentation
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Enroll in Ronny’s Maven class: Accelerating Innovation with A/B Testing at https://bit.ly/ABClassLenny. Promo code “LENNYAB” will give $500 off the class for the first 10 people to use it.
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Find the full transcript at: https://www.lennysnewsletter.com/p/the-ultimate-guide-to-ab-testing
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Where to find Ronny Kohavi:
• Twitter: https://twitter.com/ronnyk
• LinkedIn: https://www.linkedin.com/in/ronnyk/
• Website: http://ai.stanford.edu/~ronnyk/
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Where to find Lenny:
• Newsletter: https://www.lennysnewsletter.com
• Twitter: https://twitter.com/lennysan
• LinkedIn: https://www.linkedin.com/in/lennyrachitsky/
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In this episode, we cover:
(00:00) Ronny’s background
(04:29) How one A/B test helped Bing increase revenue by 12%
(09:00) What data says about opening new tabs
(10:34) Small effort, huge gains vs. incremental improvements
(13:16) Typical fail rates
(15:28) UI resources
(16:53) Institutional learning and the importance of documentation and sharing results
(20:44) Testing incrementally and acting on high-risk, high-reward ideas
(22:38) A failed experiment at Bing on integration with social apps
(24:47) When not to A/B test something
(27:59) Overall evaluation criterion (OEC)
(32:41) Long-term experimentation vs. models
(36:29) The problem with redesigns
(39:31) How Ronny implemented testing at Microsoft
(42:54) The stats on redesigns
(45:38) Testing at Airbnb
(48:06) Covid’s impact and why testing is more important during times of upheaval
(50:06) Ronny’s book, Trustworthy Online Controlled Experiments: A Practical Guide to A/B Testing
(51:45) The importance of trust
(55:25) Sample ratio mismatch and other signs your experiment is flawed
(1:00:44) Twyman’s law
(1:02:14) P-value
(1:06:27) Getting started running experiments
(1:07:43) How to shift the culture in an org to push for more testing
(1:10:18) Building platforms
(1:12:25) How to improve speed when running experiments
(1:14:09) Lightning round
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Referenced:
• Trustworthy Online Controlled Experiments: A Practical Guide to A/B Testing: https://experimentguide.com/
• Seven rules of thumb for website experimenters: https://exp-platform.com/rules-of-thumb/
• GoodUI: https://goodui.org
• Defaults for A/B testing: http://bit.ly/CH2022Kohavi
• Ronny’s LinkedIn post about A/B testing for startups: https://www.linkedin.com/posts/ronnyk_abtesting-experimentguide-statisticalpower-activity-6982142843297423360-Bc2U
• Sanchan Saxena on Lenny’s Podcast: https://www.lennyspodcast.com/sanchan-saxena-vp-of-product-at-coinbase-on-the-inside-story-of-how-airbnb-made-it-through-covid-what-he8217s-learned-from-brian-chesky-brian-armstrong-and-kevin-systrom-much-more/
• Optimizely: https://www.optimizely.com/
• Optimizely was statistically naive: https://analythical.com/blog/optimizely-got-me-fired
• SRM: https://www.linkedin.com/posts/ronnyk_seat-belt-wikipedia-activity-6917959519310401536-jV97
• SRM checker: http://bit.ly/srmCheck
• Twyman’s law: http://bit.ly/twymanLaw
• “What’s a p-value” question: http://bit.ly/ABTestingIntuitionBusters
• Fisher’s method: https://en.wikipedia.org/wiki/Fisher%27s_method
• Evolving experimentation: https://exp-platform.com/Documents/2017-05%20ICSE2017_EvolutionOfExP.pdf
• CUPED for variance reduction/increased sensitivity: http://bit.ly/expCUPED
• Ronny’s recommended books: https://bit.ly/BestBooksRonnyk
• Chernobyl on HBO: https://www.hbo.com/chernobyl
• Blink cameras: https://blinkforhome.com/
• Narrative not PowerPoint: https://exp-platform.com/narrative-not-powerpoint/
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Production and marketing by https://penname.co/. For inquiries about sponsoring the podcast, email podcast@lennyrachitsky.com.
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Lenny may be an investor in the companies discussed.
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