A talk prepared for Bend WebCAM, a creativity and marketing conference in Bend, Oregon. Presented on October 13, 2014
What Lean Startup Principles
Bring to Marketing
What is Lean & why should it matter to marketers?
What’s all that got to do with “growth hacking”?
How do we do it?
What is ‘lean’?
It’s a reaction to waste,
superstition, and bias.
what is the purpose of
a lean organization?
1. To specify customer value.
2. To identify & implement the actions that create value.
3. To remove anything that doesn’t create value.
4. To analyze the results (and repeat).
The traditional software
The problem with waterfall
Full management teams
Assuming the customer is known
Assuming the features are known
Assuming growth happens by execution
High burn rate
Swinging for the fences
The results for start-ups:
Principles of Lean Start-ups
Assume customer and features are unknowns
Continuous customer interaction
Revenue goals from day one
No scaling until revenue
Low burn by design, not crisis
iteration is for learning,
empathy & intuition
startups do experiments!!
“A start-up is designed to grow fast”
Which begs the question, can larger, more
established companies grow fast?
why should this
i come from
We expect this guy to be a genius.
how marketers choose their partners
why marketers fire their partners
Bad strategy, bad creative, bad service.
we have a product-market fit
how (a lot of)
marketing people deal with data
marketers want roi,
but avoid defining what that is.
You’d think it might be cost per
acquisition, or customer lifetime
value, or revenue.
But often, KPIs are less about
business results, and more about
“passion” is a kpi.
agencies hate testing.
and marketers test
the wrong stuff.
IT’S EASY TO FOCUS ON VANITY METRICS
“Numbers that make us
look good but don’t really
help make decisions.”
The Lean Start-up
marketers rely heavily on vanity metrics
this is not a new problem.
“What do you want from me? Fine
writing? Or do you want to see the
goddamned sales curve stop moving down
and start moving up?”
- Rosser Reeves
thinking like this
shows how marketing
is not like growth hacking.
the product trap
building something people
want isn’t enough.
Build something people want, but…
Sometimes there’s no market.
Sometimes the market is too small.
Sometimes the market is too hard to reach.
Sometimes the market is too competitive.
“Poor distribution - not
product - is the number
one cause of failure.” —
the moral of the story…
Most failed startups had a product.
But ALL failed startups didn’t have enough
Same goes for big companies, too.
Principles of Lean marketing
Assume marketing strategies are hypotheses to be tested.
Continuous customer interaction - with both client & consumer.
Establish clear goals for marketing from day one.
Start simple, iterate on successes and learn from failures.
Create right-sized, integrated teams,
and use the right resources & tools as they are needed.
Keep score with clients, vendors & partners.
what is growth
Growth hacking is a marketing technique developed by
technology startups which uses creativity, analytical
thinking, and social metrics to sell products and gain
exposure. It can be seen as part of the online marketing
ecosystem, as in many cases growth hackers are simply good
at using techniques such as search engine optimization,
website analytics, content marketing and A/B testing
which are already mainstream. Growth hackers focus on
low-cost and innovative alternatives to traditional
marketing, e.g. utilizing social media and viral marketing
instead of buying advertising through more traditional media
such as radio, newspaper, and television. Growth hacking is
particularly important for startups, as it allows for a "lean"
launch that focuses on "growth ﬁrst, budgets second."
Growth hacking is about
distributing the product,
not marketing the brand.
startups look for evidence
of customer demand
Startups (should) focus on how many people are
using and/or paying for their product.
Marketers often assume demand already exists
- and focus instead on preference, loyalty,
enthusiasm, participation, etc.
growth hackers experiment
with channels and messages
Like many marketers, some founders spend
most of their effort on channels they are familiar
with, or think they should be using.
Which means marketers in a sector tend to use
the same channels & methods.
the law of shitty click throughs
“Over time, all marketing
strategies result in shitty click-
- Andrew Chen
That is, all marketing channels
eventually become saturated.
don’t go chasing customers.
Growth hackers start by asking…
Does this channel have enough users to be
facebook • youtube • linkedin
• instagram • slideshare
• Pinterest • snapchat • tinder
• oculus rift • buzzfeed • upworthy
• twitch • soundcloud • smart tv
• yahoo! • gmail • seo • sem
• adwords • atlas • twitter
I blame hockey-sticks
and this guy.
he is the mascot for all the
things we think are true
read this book.
Buyer behavior varies.
Your customers are
pretty much the same
as your competitors’
The lower your market
share, the less ‘loyal’
Loyalty is mostly habit.
you and the rest of the
category are mostly
People know and talk
about brands they use
and ignore the rest.
what they buy
(rather than buying
what they like).
the only thing that
matters is growth.
the path to growth
market ﬁt &
how do we get
growth hacking & product
development can not be silo-ed.
beta test ideas & products
Because growth hacking
and product keeps them.
What matters is value creation
CONVERSION = business value
Acquisition - drawing people into the brand
Revenue - converting visitors into customers
Referral - converting customers into advocates
engagement = customer value
Activation - people enjoying the experience...
Retention - enough to come back often...
Referral - and recommend the experience to others
so, um, yeah.
“The Data Will Tell Us What to Do”
theory v. information
“Who needs theory when you have so
much information? But this is categorically
the wrong attitude to take toward
forecasting, especially… where the data
is so noisy. Statistical inferences are
much stronger when backed up by
theory or at least some deeper
thinking about their root causes.”
How to Hypothesize
What’s a hypothesis?
ὑπόθεσις “to suppose”
It’s a proposed explanation for something.
You have to be able to test it.
The simplest explanation should (usually) be the best.
It should apply to more than one instance of the thing happening.
It should help explain other things in the future.
It should ﬁt with the evidence.
The main flaw in marketing
We should explain what
creates value for customers
We test hypotheses that:
Help us make decisions
Help us create value for our customers
Help us develop empathy for people so deep we
can anticipate solutions to problems they can’t yet
* with apologies to Arthur C. Clarke
Cool story, bro.
We need to understand
people and behavior
to make better predictions
and measure outcomes
how do we know
if it’s working?
metrics are awesome because…
1. Metrics reduce arguments based on opinion.
2. Metrics give you answers about what really works.
3. Metrics show you where you’re strong.
4. Metrics allow you to test anything you want.
5. Clients love metrics.
which metrics matter?
Users from channels come to site,
landing page, etc.
Users have a successful ﬁrst experience.
Users re-visit multiple times.
Users refer others via email, links, blogs,
widgets, word of mouth, etc.
Users buy, download, register, etc.
What should you test for?
What is the cost to acquire a customer?
How many customers are available here?
How well do they convert?
How long does it take to convert?
tests should be specific
First, you’re testing to assess the potential of
the strategy (the context + the content).
Optimization comes later.
Too often, marketers skip to optimization
metrics before we’ve properly assessed the
potential of the strategy.
tests should be continuous & evolving
A ‘law’ of growth hacking:
Which tactics move the needle tend to evolve,
as your customer base evolves.
BUT WHAT DO YOU DO
WITH WHAT YOU MEASURE?
FIND EVIDENCE OF CUSTOMER DESIRE
MAKE DECISIONS ABOUT WHAT TO CHANGE
LEARN WHAT TO DO NEXT