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 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
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 media performance.
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. http://smithery.co/making/make-things-people-want-or-make-people-want-things-my-slides-from-idejax/
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.
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.
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."
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- through rates.” - Andrew Chen That is, all marketing channels eventually become saturated.
the path to growth Attain Sustain Gain Make something people want Find product/ market fit & fine-tune the product Get the product into people’s hands (aka, “scale”)!
CONVERSION = business value Acquisition - drawing people into the brand experience 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
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.”
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.
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 express * with apologies to Arthur C. Clarke
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. http://bokardo.com/talks/metrics-driven-design-sxsw.pdf
which metrics matter? Acquisition Activation Retention Referral revenue 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.
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