Tech Talk: Measuring Innovation

1. Measuring Innovation
Ash Maurya - Founder of LEANSTACK, Author of “Scaling Lean”
IET11T
CA ACCELERATOR ZONE

2. Solution
Awesome
The Innovator’s Bias
`
?

3. Anyone up for some excel magic?

5. Traditional metrics like revenue and ROI all
track zero or negative at the earliest stages.

6. Build velocity,
validated
learning, etc.

7. Build velocity,
validated
learning, etc.
Execution of an untested plan isn’t any better.

8. Things get even murkier after launch

9. In God we trust, all others bring data.
-W. Edwards Deming

10. Drowning in a sea of data
WTF?

11. Build velocity,
validated
learning, etc.
The Dichotomy of the Progress Story
Whatever demonstrates
growth

12. We need a different measure of progress.

14. 01 Defining Progress
OUTLINE
02 Prioritizing Waste
03 Achieving Breakthrough

15. Whatdo both stakeholders
and innovators want?

16. The hockey-stick curve

17. TRACTION matters above everything else
Yay!

20. Same data plotted differently

21. What is TRACTION
exactly?

22. Traction is the output of your business model.

23. A business model describes how you
create, deliver, and capture value.
-Saul Kaplan

24. The hockey-stick curve
Track Customer behavior

25. Create Value Capture Value Cost (Deliver Value)

26. Create Value Capture Value Cost (Deliver Value)>1
VALUE EQUATION

27. Create Value Capture Value Cost (Deliver Value)>1
VALUE EQUATION
>=2
MONETIZATION EQUATION

28. Create Value Capture Value Cost (Deliver Value)> >=

29. TRACTION
The rate at which a business model captures
monetizable value from its customers.

30. Monetizable value is NOT current revenue but a
leading indicator of future revenue.

31. Saas
Freemium
Trial
E-commerce
Ad-based
Marketplace
Big Data
User Generated Content
Retail
Media
Community
Membership site
Platform
Open Source
Enterprise
Non-profit
Social

32. Saas
Freemium
Trial
E-commerce
Ad-based
Marketplace
Big Data
User Generated Content
Retail
Media
Community
Membership site
Platform
Open Source
Enterprise
Non-profit
Social
3 business model archetypes

33. DIRECT MULTI-SIDED MARKETPLACE
$

34. DIRECT

35. Unaware visitors Happy customers
Direct models

36. Unaware visitors Happy customers
Direct models

37. TRACTION IN A DIRECT MODEL:
The rate at which you create customers.

38. What customer behaviors lead to traction?

39. Unaware visitors Happy customers
Direct models

40. Unaware visitors Happy customers
Direct models
Time spent in store correlated with money spent

41. MULTI-SIDED

42. Unaware visitors Happy users
Multi-sided models

43. Unaware visitors Happy users
Multi-sided models
Derivative asset

44. Unaware visitors Happy users
Multi-sided models
Happy customers
Derivative asset

45. Unaware visitors Happy users
Multi-sided models
Happy customers
Derivative asset
Advertisers

46. TRACTION IN A MULTISIDED MODEL:
Derivative asset to revenue exchange rate

49. MARKETPLACE
$

50. Marketplaces

51. Happy buyer
Happy seller
Marketplaces

52. Happy buyer
Happy seller
$
Marketplaces
Transaction

53. Unaware buyers Happy buyer
Unaware sellers Happy seller
$Transaction
Marketplaces

55. TRACTION IN A MARKETPLACE MODEL:
The rate of transactions.

56. 01 Defining Progress
OUTLINE
02 Prioritizing Waste
03 Achieving Breakthrough

57. Before you can prioritize waste,
you have to be able to see the factory floor.

58. Unaware visitors Happy customers

60. Goal
Observe &
Orient
Leverage
ExperimentAnalyze
Next ActionLeverage
ExperimentAnalyze
Next Action
Observe &
Orient
Goal
G O L E A N
30-90 day iterations
1-4 week
iterations

61. ASH MAURYA
@ashmaurya
ash@leanstack.com
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