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HOW-TO
START AND SCALE
IMPACTFUL BUSINESS IDEAS
Kuldip Chakraborty
@cooldip
Manish Chiniwalar
@manishrc
Karthik Gupta
@karthikvgupta
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WHY ARE WE HERE?
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1.8 MILLION
BOOKS ON BUSINESS & MONEY
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GOODKARMA ● 4 Customers
● 3 Pivots
● 0 Lines of code
“Help yoga practitioners grow with
consistent and deliberate practice.”
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GOODKARMA
PIVOTS 1. Inconsistent Students → Consistent
Students
2. Add Teachers
3. Teachers → Yoga Studio Founders
“Help yoga practitioners grow with
consistent and deliberate practice.”
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CUSTOMER
FACTORY
LEAN
CANVAS
TRACTION
MODEL
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1961
John F.
Kennedy
I believe that this nation should commit itself to
achieving the goal,
before this decade is out,
of landing a man on the moon
and returning him safely to the earth.
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WHERE DO YOU WANT TO BE?
“If you don’t know where you are going,
any road will take you there.”
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DO IT NOW 1. Write your Minimum Success Criteria
in terms of revenue per year
Is it $1k, $10k, $100k, $1M, $10M?
2. Write when do you want to reach there
Anytime between 2-5 years is a good
timeframe
5 MIN
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“Don’t sell what you can build. Build what you can sell.”
BUSINESS, NOT BUSYNESS.
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CREATE
VALUE
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CREATE
VALUE
CAPTURE
VALUE
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CREATE
VALUE
CAPTURE
VALUE
AT FRACTION
OF THE COST
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CREATE
VALUE
CAPTURE
VALUE
AT FRACTION
OF THE COST
DO THIS WITH A LOT OF PEOPLE
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“It's not about ideas. It's about making ideas happen.”
- Scott Belsky
THE LEAN CANVAS
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ASH MAURYA’S LEAN CANVAS
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CUSTOMER
SEGMENT
1. Identify your key customer segment
2. Identify the roles that will interact
with this customer
3. Identify early adopters
#1
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PROBLEM 1. List the top 3 problems
2. List existing alternatives
#2
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UVP
1. Single, clear, compelling message that
states why you are different and worth
paying attention.
2. Tips for UVP:
- Be different, but make sure your difference
matters
- Target early adopters
- Focus on finished story benefits
- Pick your words carefully and own them
- Answer: what, who, and why
- Study other good UVPs.
3. Good Formula
Instant Clarity Headline
= End Result Customer Wants
+ Specific Period of Time
+ Address the Objections
4. Create a high-concept pitch.
#3
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SOLUTION Simply sketch out the simplest thing you
could possibly build to address each
problem.
#4
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CHANNELS
1. Failing to build a significant path to
customers is among the top reasons
why startups fail.
2. Write both inbound and outbound
paths to your customers.
#5
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REVENUE
STREAMS
List your sources of revenue.
Don’t let cost drive your price. Base it on the
“Perceived Value” and existing alternatives.
#6
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Image credits: vox.com
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“What we document is that price is not just
about inferences of quality, but it can
actually affect real quality,”
BABA SHIV
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“What we document is that price is not just
about inferences of quality, but it can
actually affect real quality,”
“So, in essence, [price] is changing people's
experiences with a product and, therefore,
the outcomes from consuming this
product.”
BABA SHIV
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REVENUE
STREAMS
List your sources of revenue.
Don’t let cost drive your price. Base it on the
“Perceived Value” and existing alternatives.
#6
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COST
STRUCTURE
List your fixed costs and variable costs
#7
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KEY METRICS What will tell you how your business is
doing?
#8
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A B
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UNFAIR
ADVANTAGE
Something that cannot be easily be copied
What will prevent a big company ripping off your
product?
#9
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“If you want to unleash more creativity in your company, you need to allow for a little
contamination. It is the sand in the oyster that creates the pearl.”
- Fred Wilson
LOCAL MAXIMA
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No content
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DO IT NOW
1. Copy the canvas
& create more versions
2. Start with changing the
Customer Segments
3. Rank and pick one, based on:
- Customer Pain Level
- Ease of Reach
- Gross Margins
- Market Size
- Tech Feasibility
60 MIN
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How many trees are left in Bangalore today?
FERMI ESTIMATE
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Enrico Fermi
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REQUIRED CUSTOMERS =
REVENUE/YEAR
REVENUE/CUSTOMER/YEAR
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REQUIRED CUSTOMERS =
REVENUE/YEAR
REVENUE/CUSTOMER/YEAR
Minimum Success Criteria
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REQUIRED CUSTOMERS =
REVENUE/YEAR
$1,000,000
REVENUE/CUSTOMER/YEAR
(Number of Students/Studio) x (Price per Student)
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REQUIRED CUSTOMERS =
REVENUE/YEAR
$1,000,000
REVENUE/CUSTOMER/YEAR
= (STUDENTS/STUDIO) x (PRICE/STUDENT) x (12 MONTHS)
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REQUIRED CUSTOMERS =
REVENUE/YEAR
$1,000,000
REVENUE/CUSTOMER/YEAR
= (50 STUDENTS/STUDIO) x ($4/STUDENT) x (12 MONTHS)
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REQUIRED CUSTOMERS =
REVENUE/YEAR
$1,000,000
REVENUE/CUSTOMER/YEAR
$2,400
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REQUIRED CUSTOMERS = 416 ACTIVE CUSTOMERS
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REQUIRED CUSTOMERS = 500 ACTIVE CUSTOMERS
Over 100,000 yoga studios in
the world
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CUSTOMER
PRODUCTION RATE =
REVENUE/YEAR
$1,000,000
CUSTOMER LIFETIME VALUE
= (REVENUE/CUSTOMER/YEAR) x (LIFETIME)
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CUSTOMER
PRODUCTION RATE =
REVENUE/YEAR
$1,000,000
CUSTOMER LIFETIME VALUE
= ($2,400 REVENUE/CUSTOMER/YEAR) x (2 YEAR LIFETIME)
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CUSTOMER
PRODUCTION RATE =
REVENUE/YEAR
$1,000,000
CUSTOMER LIFETIME VALUE
$4,800
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REQUIRED CUSTOMERS = 208 ACTIVE CUSTOMERS
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REQUIRED CUSTOMERS = 200 NEW CUSTOMERS/YEAR
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REQUIRED LEADS =
CUSTOMER PRODUCTION RATE
CONVERSION RATE
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REQUIRED LEADS =
CUSTOMER PRODUCTION RATE
200
CONVERSION RATE
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REQUIRED LEADS =
CUSTOMER PRODUCTION RATE
200
CONVERSION RATE
1% OR 0.01
For SaaS Companies,
It’s usually single digit
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REQUIRED LEADS = 20,000 LEADS PER YEAR
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200 NEW CUSTOMERS EVERY YEAR
500 ACTIVE CUSTOMERS
$1M REVENUE/YEAR
20,000 LEADS PER YEAR
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REQUIRED CUSTOMERS =
REVENUE/YEAR
$1,000,000
REVENUE/CUSTOMER/YEAR
= (50 STUDENTS/STUDIO) x ($4/STUDENT) x (12 MONTHS)
$4 → $8
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200 100 NEW CUSTOMERS EVERY YEAR
500 250 ACTIVE CUSTOMERS
$1M REVENUE/YEAR
20,000 10,000 LEADS PER YEAR
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DO IT NOW
30 MIN
1. Determine time-boxed minimum
success criteria
Keep time box under 3 years
Frame the outcome in terms of revenue (or
throughput) goal
2. Estimate LTV
3. Calculate the required Throughput
4. Refine and adjust your model
Can you Increase Pricing?
5. Eliminate any models that don’t work
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To achieve a large fuzzy goal, it is best to break it down into smaller measurable steps
STARTUP STAGES
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No content
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PROBLEM-SOLUTION FIT PRODUCT-MARKET FIT SCALE
Understanding the
value that can be
delivered
Delivered value >
Captured value
Delivering value to
more and more
customers
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Lean Canvas : Business Plan :: Traction Model : Financial Model
THE TRACTION MODEL
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GROWTH
(#Customers)
TIME
3 months 1 year 2 years
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GROWTH
(#Customers)
TIME
3 months 1 year 2 years
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PROBLEM-SOLUTION FIT PRODUCT-MARKET FIT SCALE
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GROWTH
TIME
3 months 1 year 2 years
10X
PROBLEM-SOLUTION FIT
PRODUCT-MARKET FIT
SCALE 100X
MINIMUM
SUCCESS
CRITERIA
RISK - CUSTOMERS RISK - TECH
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WHY 10X WORKS
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You have a single goal from ideation to scale
The 10X model requires non-linear thinking
The 10X model works to expose the riskiest
parts of your business
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GROWTH
TIME
3 months 1 year 2 years
10X
PROBLEM-SOLUTION FIT
PRODUCT-MARKET FIT
SCALE
GOODKARMA TRACTION MODEL
400 studios
$1MM Revenue
40 studios
4 studios
7 months
RISK - CUSTOMERS 100X
RISK - TECH
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PROBLEM-SOLUTION FIT PRODUCT-MARKET FIT SCALE
Don't have a product just yet!
No product - No Customers.
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100 Leads
10 Trials 1 Customer
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IN EVERY STAGE FOCUS ON
REPEATABILITY
GROWTH
TIME
3
months
2 years 3 years
10X
PROBLEM-SOLUTION FIT
PRODUCT-MARKET FIT
SCALE
1 year
100X
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GROWTH
TIME
3
months
2 years 3 years
10X
PROBLEM-SOLUTION FIT
PRODUCT-MARKET FIT
SCALE
1 year
100X
SINGLE BIGGEST THING TO BUILDING TRACTION
GET OUT OF THE BUILDING
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DO IT NOW
30 MIN
Stage: PS Fit
1x
PM Fit
10x
Scale
100x
Timebox 3 months 1 year 2 years
Customer
Throughput
30 300 3000
Timebox and customer throughput:
Using the funnel, come up with the throughput
for Problem-Solution Fit:
Stage: Leads Trials Customers
Conversion 10% 10%
Numbers ??? ?? 30
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“I’m Gonna Make Him An Offer He Can’t Refuse”
-Don Corleone
VALIDATE WITH AN “OFFER”
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- UVP
- Demo - https://invis.io/ME8GASP8N
- Pricing - 5% of the fees collected from
students through the app
GOOD KARMA
OFFER
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DO IT NOW
15 MIN Create an OFFER
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Now that you have defined a goal and a path, you now need a repeatable process to keep
delivering value one customer at a time.
THE CUSTOMER FACTORY
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CUSTOMER
FACTORY
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ACQUISITION
GoodKarma: Identify the yoga studio
founder and set up a call to place the
offer
Disneyland: People queuing up
outside Disneyland
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ACQUISITION ACTIVATION
GoodKarma: Install the Manager’s
App at the studio and have the manager
send an invite to enquiry
Disneyland: After the visitor has taken
the first ride
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ACQUISITION ACTIVATION REVENUE
GoodKarma:
Student makes a
payment to the studio
through the app
Disneyland: Visitor
is happy and takes all
the rides
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ACQUISITION ACTIVATION REVENUE
RETENTION
GoodKarma: Student continues
to use the app and maizntains the
relationship with the studi
Disneyland: Visitor takes more
rides and spends more time
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ACQUISITION ACTIVATION REVENUE
REFERRAL
RETENTION
GoodKarma: Student talking to
another student in another studio
Disneyland: Visitor talks to her
neighbours
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AARRR!
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DO IT NOW
1. Identify the events corresponding to
each of the steps in the customer
factory:
- Acquisition
- Activation
- Retention
- Revenue
- Referral
2. If you already have paying customers,
Add current numbers.
30 MIN
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THEORY OF CONSTRAINTS
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“The chain is as strong as the weakest link”
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GOODKARMA’S CONSTRAINTS
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GoodKarma: Install the Manager’s
App at the studio and have the manager
send an invite to enquiry
ACQUISITION ACTIVATION REVENUE
REFERRAL
RETENTION
GoodKarma: Identify the yoga studio
founder and set up a call to place the
offer
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GoodKarma: Install the Manager’s
App at the studio and have the manager
send an invite to enquiry
ACQUISITION ACTIVATION REVENUE
REFERRAL
RETENTION
GoodKarma: Identify the yoga studio
founder and set up a call to place the
offer
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Taiichi Ohno
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You can contact any of us:
● [email protected]
● [email protected]
● [email protected]
Would you like to attend the follow-up
workshop?
WHAT’S NEXT?
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“If I have seen further, it is by standing on the shoulders of giants.”
- Isaac Newton
THANKS TO...
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ASH MAURYA
#RunningLean, #ScalingLean
ERIC RIES
#TheLeanStartup
JAKE KNAPP
#GoogleDesignSprint
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YOU GUYS
:)
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CREDITS
Icons from TheNounProject
- Factory by David
- Graph by chance smith
- Einstein by oksana latysheva
- Dollar by thomas bruck