Lean Startup - Step-by-Step to Paying Customers

Workshop at Start-Up Day Innsbruck (June 2013)

Transcript

1. Step-by-Step to Paying Customers LUKAS FITTL @lfittl spark59.com LEAN STARTUP Lean Startup is trademarked by Eric Ries and used with permission. Business Model Canvas is created by Alex Osterwalder and licensed under CC-BY-SA.
2. About Myself Co-Founded 3 tech startups, worked with many others fittl.com
4. Profitable & Proud!
5. This is based on lots of books & many failures, small and big.
6. How does the old way look like?
7. My 2nd Startup: failed, badly.
10. 100k EUR Investment. 1.5 years of 3 founder’s lives. Great technology.
11. 0 EUR Revenue.
12. Why? We were basically trying one strategy. Licensing Cloud Technology to Hosting Companies.
13. How does Lean look like?
14. Profitable & Proud!
15. Charged Customers $200 / month from Day One
16. Version 1: Analytics for Marketers Version 2: Analytics for Startups Version 3: Analytics for SaaS Startups
17. Don’t fall in love with your idea!
18. Its about Planning, not Plans.
19. Make the Plan, focus on the assumptions.
22. Main Assumption: Customers would buy a 5000+ EUR license & integrate our Product within weeks (not months)
23. $$$/users/etc Time
24. Product/Market Fit: The moment when you can consistently deliver value to the right people.
25. Product/ Market Fit 1. Deliver Value 2. Accelerate Growth
26. Product/ Market Fit (Almost) Everyone Gets Stuck In Delivering Value! 1. Deliver Value
27. Customer Development
28. Your Focus. What you do What you ignore
29. You’re focused on your Idea.
30. But: Who is your customer? How do you reach them? Why do they care?
31. Don’t ignore your Customers.
32. Credit: Kathy Sierra
33. Find your Customers.
34. Focus on your Customers.
35. [ Exercise ] Who is your Customer?
36. 1. Who is your Customer? • Persona of your prototypical (early) customer • Narrow group of people that buy/ use your product • Marketing is easier if you have a narrow customer segment
37. 2. What are they trying to do? • What is the use case? • What are the problems the customer is trying to solve? • These might be things they’ve already started building in house, because there is an active need
38. Your Product Will: A) Solve a Problem / Get a Job Done B) Fulfill a fundamental human need (friendship, dating, entertainment, networking, gambling, etc.) http://steveblank.com/2012/04/19/how-to-build-a-billion-dollar-startup/
39. 3. What are they currently using? • Existing Alternatives that solve part of their use case • Often this can be a self-built, quick solution using multiple tools • Examples: Microsoft Excel, Email, [Competitor’s Product]
40. 4. How much would they spend? • How much is the problem worth to the customer? • Not how much it costs you to implement the solution • Avoid Free and Freemium Its just a marketing tactic!
41. Lean Startup is about Optimising for Learning
42. Small Decisions, Open Mind
43. Our biggest risk is following one strategy for too long
44. Launch! Risk Time BUILD BUILD BUILD
45. Risk Time Launch! BUILD Launch! BUILD Launch! BUILD Launch! BUILD
46. IDEAS PRODUCT DATA MEASURE BUILD LEARN Experiment
47. Build: Full Prototype Measure: “Successful” Launch Learn: (within months) Perfection: 3+ months
48. Build: Weekend Prototype Measure: Customers commit to buy Learn: (within days) Iteration: 2-3 weeks
49. Dictates how fast you can learn Experiment Scope Your Runway How long you can survive
50. Getting Your First Customers
51. Build Quickly
52. MVP Minimum Viable Product
53. Idealab’s CarsDirect Wizard of Oz MVP
54. mjam.at Concierge MVP
55. Customer Interviews
56. Shift yourself into the role of a researcher. detective. spy.
57. Interview Setup ? ! Interviewee Interviewer Note Taker
58. Interview Structure 1. Are they your customer? 2. Explore their worldview 3. Close & Collect Contact Info
59. You are looking for emotions. Frustration. Excitement. Things they care about.
60. Ask about concrete past experiences “When was the last time you wrote a blog post?” “Umm, 3 months ago.” NOT future behaviour: “How often do you write blog posts?” “I’m trying to write one every couple of weeks.”
61. The Mom (or Dad) Test Credit to @robfitz for the idea If you asked your parents, could they lie to you? Never ask people their opinion!
62. Asking about what they are spending changes the conversation.
63. Interview 10-20 customers, then look for patterns & focus on those.
64. Shifting Your Perspective For Growth
65. Make Happy Customers, Not: Make Customers Happy
66. $10000 / month $2000 / month Now Sept 2013 ?
67. Break Revenue Targets, down into Unit Economics.
68. Dave McClure’s AARRR ACQUISITION ACTIVATION RETENTION REVENUE REFERRAL How do users find you? Do users have a reat first experience? Do users come back? How do you make money? Do users tell others?
69. $2000 / month ACQ ACT 20% to paid at $35 RET REV 20% stay for 1 week 8% activate 5% sign up 2 paid $70 / day 10 retained 50 activated 625 signed up 12500 unique visitors Each Day:
70. Cohort Analysis
71. Cohort: Group of people that share a common characteristic over a period of time.
73. Track people, not events.
77. $10000 / month $2000 / month Now June 2013 ?
78. $2000 / month ACQ ACT 20% to paid at $35 RET REV 20% stay for 1 week 8% activate 5% sign up 2 paid $70 / day 10 retained 50 activated 625 signed up 12500 Unique Visitors / day Cohort of May 12th, 2013
79. $2000 / month Now ACQ ACT 20% to paid at $35 RET REV 20% stay for 1 week 8% activate 5% sign up $70 / day 12500 Uniques $10000 / month Sept 2013 20% to paid at $35 20% stay for 1 week 20% activate 10% sign up $350 / day 12500 Uniques 2 10 50 625 10 50 250 1250
80. $2000 / month Now ACQ ACT 20% to paid at $35 RET REV 20% stay for 1 week 8% activate 5% sign up $70 / day 12500 Uniques $10000 / month Sept 2013 20% to paid at $35 20% stay for 1 week 20% activate 10% sign up $350 / day 12500 Uniques 2 10 50 625 10 50 250 1250
81. What is success, for you?
82. Luxurious Lifestyle? Feeding your Family? Make it a number.
83. The day you’re profitable, is *magic*.
84. What is your success? [ Exercise ]
85. How many customers would it take? [ Exercise ]
86. Applying it in Practice
87. Principles, not Process
88. The goal is not to be perfect, but to do more of the right things at the right time.
89. + Think Visually!
90. What is your riskiest customer assumption, right now? [ Exercise ]
91. What you could do to test your assumption faster?
92. Thanks! lukas@spark59.com