Slide 1

Slide 1 text

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.

Slide 2

Slide 2 text

About Myself Co-Founded 3 tech startups, worked with many others fittl.com

Slide 3

Slide 3 text

No content

Slide 4

Slide 4 text

Profitable & Proud!

Slide 5

Slide 5 text

This is based on lots of books & many failures, small and big.

Slide 6

Slide 6 text

How does the old way look like?

Slide 7

Slide 7 text

My 2nd Startup: failed, badly.

Slide 8

Slide 8 text

No content

Slide 9

Slide 9 text

No content

Slide 10

Slide 10 text

100k EUR Investment. 1.5 years of 3 founder’s lives. Great technology.

Slide 11

Slide 11 text

0 EUR Revenue.

Slide 12

Slide 12 text

Why? We were basically trying one strategy. Licensing Cloud Technology to Hosting Companies.

Slide 13

Slide 13 text

How does Lean look like?

Slide 14

Slide 14 text

Profitable & Proud!

Slide 15

Slide 15 text

Charged Customers $200 / month from Day One

Slide 16

Slide 16 text

Version 1: Analytics for Marketers Version 2: Analytics for Startups Version 3: Analytics for SaaS Startups

Slide 17

Slide 17 text

Don’t fall in love with your idea!

Slide 18

Slide 18 text

Its about Planning, not Plans.

Slide 19

Slide 19 text

Make the Plan, focus on the assumptions.

Slide 20

Slide 20 text

No content

Slide 21

Slide 21 text

No content

Slide 22

Slide 22 text

Main Assumption: Customers would buy a 5000+ EUR license & integrate our Product within weeks (not months)

Slide 23

Slide 23 text

$$$/users/etc Time

Slide 24

Slide 24 text

Product/Market Fit: The moment when you can consistently deliver value to the right people.

Slide 25

Slide 25 text

Product/ Market Fit 1. Deliver Value 2. Accelerate Growth

Slide 26

Slide 26 text

Product/ Market Fit (Almost) Everyone Gets Stuck In Delivering Value! 1. Deliver Value

Slide 27

Slide 27 text

Customer Development

Slide 28

Slide 28 text

Your Focus. What you do What you ignore

Slide 29

Slide 29 text

You’re focused on your Idea.

Slide 30

Slide 30 text

But: Who is your customer? How do you reach them? Why do they care?

Slide 31

Slide 31 text

Don’t ignore your Customers.

Slide 32

Slide 32 text

Credit: Kathy Sierra

Slide 33

Slide 33 text

Find your Customers.

Slide 34

Slide 34 text

Focus on your Customers.

Slide 35

Slide 35 text

[ Exercise ] Who is your Customer?

Slide 36

Slide 36 text

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

Slide 37

Slide 37 text

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

Slide 38

Slide 38 text

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/

Slide 39

Slide 39 text

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]

Slide 40

Slide 40 text

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!

Slide 41

Slide 41 text

Lean Startup is about Optimising for Learning

Slide 42

Slide 42 text

Small Decisions, Open Mind

Slide 43

Slide 43 text

Our biggest risk is following one strategy for too long

Slide 44

Slide 44 text

Launch! Risk Time BUILD BUILD BUILD

Slide 45

Slide 45 text

Risk Time Launch! BUILD Launch! BUILD Launch! BUILD Launch! BUILD

Slide 46

Slide 46 text

IDEAS PRODUCT DATA MEASURE BUILD LEARN Experiment

Slide 47

Slide 47 text

Build: Full Prototype Measure: “Successful” Launch Learn: (within months) Perfection: 3+ months

Slide 48

Slide 48 text

Build: Weekend Prototype Measure: Customers commit to buy Learn: (within days) Iteration: 2-3 weeks

Slide 49

Slide 49 text

Dictates how fast you can learn Experiment Scope Your Runway How long you can survive

Slide 50

Slide 50 text

Getting Your First Customers

Slide 51

Slide 51 text

Build Quickly

Slide 52

Slide 52 text

MVP Minimum Viable Product

Slide 53

Slide 53 text

Idealab’s CarsDirect Wizard of Oz MVP

Slide 54

Slide 54 text

mjam.at Concierge MVP

Slide 55

Slide 55 text

Customer Interviews

Slide 56

Slide 56 text

Shift yourself into the role of a researcher. detective. spy.

Slide 57

Slide 57 text

Interview Setup ? ! Interviewee Interviewer Note Taker

Slide 58

Slide 58 text

Interview Structure 1. Are they your customer? 2. Explore their worldview 3. Close & Collect Contact Info

Slide 59

Slide 59 text

You are looking for emotions. Frustration. Excitement. Things they care about.

Slide 60

Slide 60 text

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.”

Slide 61

Slide 61 text

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!

Slide 62

Slide 62 text

Asking about what they are spending changes the conversation.

Slide 63

Slide 63 text

Interview 10-20 customers, then look for patterns & focus on those.

Slide 64

Slide 64 text

Shifting Your Perspective For Growth

Slide 65

Slide 65 text

Make Happy Customers, Not: Make Customers Happy

Slide 66

Slide 66 text

$10000 / month $2000 / month Now Sept 2013 ?

Slide 67

Slide 67 text

Break Revenue Targets, down into Unit Economics.

Slide 68

Slide 68 text

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?

Slide 69

Slide 69 text

$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:

Slide 70

Slide 70 text

Cohort Analysis

Slide 71

Slide 71 text

Cohort: Group of people that share a common characteristic over a period of time.

Slide 72

Slide 72 text

No content

Slide 73

Slide 73 text

Track people, not events.

Slide 74

Slide 74 text

No content

Slide 75

Slide 75 text

No content

Slide 76

Slide 76 text

No content

Slide 77

Slide 77 text

$10000 / month $2000 / month Now June 2013 ?

Slide 78

Slide 78 text

$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

Slide 79

Slide 79 text

$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

Slide 80

Slide 80 text

$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

Slide 81

Slide 81 text

What is success, for you?

Slide 82

Slide 82 text

Luxurious Lifestyle? Feeding your Family? Make it a number.

Slide 83

Slide 83 text

The day you’re profitable, is *magic*.

Slide 84

Slide 84 text

What is your success? [ Exercise ]

Slide 85

Slide 85 text

How many customers would it take? [ Exercise ]

Slide 86

Slide 86 text

Applying it in Practice

Slide 87

Slide 87 text

Principles, not Process

Slide 88

Slide 88 text

The goal is not to be perfect, but to do more of the right things at the right time.

Slide 89

Slide 89 text

+ Think Visually!

Slide 90

Slide 90 text

What is your riskiest customer assumption, right now? [ Exercise ]

Slide 91

Slide 91 text

What you could do to test your assumption faster?

Slide 92

Slide 92 text