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Startup Marketing Slides from Lean Startup Circle LA
1. Lean Startup Marketing Driving Sustainable Growth at Normal Vs Network Effect Startups Sean Ellis Lean Startup LA August 10, 2010
2. Objectives for Today’s Meeting Apply lean startup principles to driving growth Normal startup Network effect startup Refine based on group feedback 2 startup-marketing.com
3. What are the Lean Startup Principles? Nail it then scale it Rapid hypothesis testing about market, pricing, customers (customers & markets unknown) MVP (Minimum viable product) Low burn by design (no scaling until revenue) Metrics, iteration, agile development Learn fast (fail fast) 3 startup-marketing.com
4. “Lean-ish” Mktg = Back-to-Back IPOs First Startup Goals (1996 launch) Lead online game category Get users at cost lower than user value (ARPU) Minimize waste via sophisticated metrics Second Startup Added Goals (2003 launch) Understand user perceptions of value Optimize funnel (reduce friction) 4 startup-marketing.com
5. “Value” in Normal Vs Network Effect Normal Value same with 1 user or 1m users Google LogMeIn Xobni Network effect Value improves with more users Facebook Skype Ebay 5 startup-marketing.com
7. Creating Value: Normal Startup Product/market fit = product is “must have” (value) Become a “must have” with customer development Validate “value” assumptions early (who needs/why?) Get users on first release ASAP Find “must have” users/use cases Facts outside building (interviews then surveys) Pivot if necessary to create value 7 startup-marketing.com
8. Key “Value” Question on Survey.io “How would you feel if you could no longer use Product?” 8 startup-marketing.com
10. After P/M fit: Race to Scale “Value” is perishable (“MH” window of opp) Focus on speed rather than short-term burn* Long-term burn will be less with speed Difficult after “low burn” VC praise Requires major shift in culture Culture shifts from patience to speed * During growth transition 10 startup-marketing.com
11. Key Growth Transition Projects Understand– core value perceived Positioning - based on perceived value Right metrics – to focus resources Optimize conversions - LP & funnel Viable economics - business model Scalable growth strategy - who/intent? 11 startup-marketing.com
19. Network Effect Business Critical Mass Required for Full Validation (Lean is normally antithesis of “get big fast”) 19 startup-marketing.com
20. Pre Growth Prep for Network Effect Customer Dev critical to validate up front Raise enough money to get past “no man’s land” Define minimum viable critical mass (MVCM) Facebook– Harvard, Twitter - SXSW Within region, demographic, product type (mkt place)… Have strategy for “priming the pump” (or fly wheel) 20 startup-marketing.com
21. Scale & Optimize On the Fly Scale growth to MVCM (minimum viable critical mass) Generate revenue early Engage users to reposition, iterate and optimize on the fly Engage to validate gratification reached Replicate approach for next critical mass after gratification in first MVCM 22 startup-marketing.com
22. Priming the Pump (for Some)* Create network balance Ebay, dating sites, etc. Example short-term strategies Subsidize customer acquisition for dragging 1/2 Services or hands on to “fake” balance (Aardvark) *i.e. if buyers and sellers 21 startup-marketing.com
23. Network Effect = P/M Fit After Critical Mass Product/Market Fit (Reposition on Value) Get Efficient Conversions Drive Growth 23 startup-marketing.com