Growth Hacking for Lean Startups
- 1. ©2015 StratAlign Group 1 Growth Hacking For Lean Startups
- 2. ©2015 StratAlign Group Agenda • Lean startup 101 • Why growth hacking? • Growth hacking tools • Growth hacking concepts • How to hack growth
- 3. ©2015 StratAlign Group LEAN STARTUP 101
- 5. ©2015 StratAlign Group Steve Blank’s Stages
- 7. ©2015 StratAlign Group Problem/Market Fit Solution/Market Fit Product/Market Fit Revenue Growth Profit
- 8. ©2015 StratAlign Group Problem/Market Fit Solution/Market Fit Product/Market Fit Revenue Growth Profit One Metric That Matters Validated/Invalidated Hypotheses Goal Validate a morphine problem for a specific target market Exit Criteria • Customer archetype(s) • Validated morphine problem • Understand how the customer is solving the problem now • Market size • Organization chart and influence map (B2B) Other Key Metrics • # of customer interviews Business Model Canvas Customer Segments, Value Proposition
- 10. ©2015 StratAlign Group Problem/Market Fit Solution/Market Fit Product/Market Fit One Metric That Matters Validated/Invalidated Hypotheses Goal Determine the minimum features that solve a morphine problem for a specific target market Exit Criteria • Customer archetype(s) • Minimum feature set to solve the customer’s problem • Understand what and how the customer is willing to pay to solve the problem • Market size (revised) • Have a set of customers who are willing to pay now Other Key Metrics • # of customer interviews Business Model Canvas Customer Segments, Value Proposition, Revenue Model Revenue Growth Profit
- 12. ©2015 StratAlign Group Problem/Market Fit Solution/Market Fit Product/Market Fit One Metric That Matters Churn rate Goal Engaged, paying customers who have a churn rate less than 5% monthly Exit Criteria • Churn rate is less than or equal to 5% monthly Other Key Metrics • WAU (Weekly Active Users) • MAU (Monthly Active Users) • Cohort analysis by activity • Long term cancellation rate Business Model Canvas Customer Segments, Value Proposition, Revenue Model, Customer Relationships Revenue Growth Profit
- 14. ©2015 StratAlign Group Problem/Market Fit Solution/Market Fit Product/Market Fit Revenue Growth Profit One Metric That Matters WOWG (Week Over Week Growth) Goal Consistently grow revenues Exit Criteria • WOWG is greater than or equal to 5% Other Key Metrics • ARPU (Average Revenue Per User) • Churn rate • WAU/MAU • Activation % • Time to conversion • Referral rate Business Model Canvas Customer Segments, Value Proposition, Revenue Model, Customer Relationships, Channels
- 15. ©2015 StratAlign Group Revenue Growth
- 16. ©2015 StratAlign Group Problem/Market Fit Solution/Market Fit Product/Market Fit Revenue Growth Profit One Metric That Matters Profit Margin % Goal Operationalize the product to get to profitability Exit Criteria • The product is profitable and has a high growth rate Other Key Metrics • CAC (Customer Acquisition Cost) • LTV (Life Time Value) • ARPU (Average Revenue Per User) • MRR (Monthly Recurring Revenue) • LTV to CAC ratio • Months to recover CAC • COGS/customer (Cost Of Goods Sold) • Time to breakeven Business Model Canvas Full canvas
- 18. ©2015 StratAlign Group WHY GROWTH HACKING?
- 19. ©2015 StratAlign Group Problem/Market Fit Solution/Market Fit Product/Market Fit Revenue Growth Profit
- 20. ©2015 StratAlign Group You discovered a target market who has that problem
- 21. ©2015 StratAlign Group You have found a really painful problem
- 22. ©2015 StratAlign Group You have created a solution that customers tell you really solves the problem
- 23. ©2015 StratAlign Group So, you build your MVP and invite your first customers to use it
- 24. ©2015 StratAlign Group The customers sign up and become activated
- 25. ©2015 StratAlign Group Then what happens?
- 27. ©2015 StratAlign Group So, you buy some AdWords and get more sign ups. Then, what happens?
- 28. ©2015 StratAlign Group 0 0.2 0.4 0.6 0.8 1 1.2 1 2 3 4 5 6 7 Product Usage
- 30. ©2015 StratAlign Group Your product sucks
- 31. ©2015 StratAlign Group TheTrough of Sorrow
- 32. ©2015 StratAlign Group Most startup founders focus heavily on product but most of a startup's risk lies in distribution Dave McClure
- 34. ©2015 StratAlign Group Growth HackingTools
- 35. ©2015 StratAlign Group Install Analytics
- 36. ©2015 StratAlign Group Google Analytics isWorth WhatYou Pay For It People, not page views, buy software
- 38. ©2015 StratAlign Group Email You will want to be able to A/B test, track opens and click through’s
- 39. ©2015 StratAlign Group Triggered Email
- 40. ©2015 StratAlign Group Chat Talk to your customers in real time
- 41. ©2015 StratAlign Group SMS If your customer is a Millennial, they prefer texting
- 43. ©2015 StratAlign Group App Notifications If you have a mobile app, you can use push notifications to engage your customers
- 44. ©2015 StratAlign Group In App Interventions
- 45. ©2015 StratAlign Group Glue Apps that put all the pieces together
- 46. ©2015 StratAlign Group Growth Hacking Concepts
- 48. ©2015 StratAlign Group Acquisition Bring prospective customers to your site
- 50. ©2015 StratAlign Group Retention Engage users
- 52. ©2015 StratAlign Group A/B testing LinkBaitPro Get Started LinkBaitPro Get Started A B
- 53. ©2015 StratAlign Group What to/Not toTest LinkBaitPro Get Started For recreational use only. Do not staple or paper clip. All models over 18 years of age. Prize not redeemable for cash value. If condition persists, consult your physician. No user-serviceable parts inside. Test the Headline Image vs. Video Call to action text and color Don’t spend a lot of time testing the copy
- 54. ©2015 StratAlign Group Events 1. Login 2. Upload Photos 3. Tag Photos 4. Share Photos 5. Comment on Others Photos
- 55. ©2015 StratAlign Group Don’t Focus on AcquisitionWhen Activation and Retention are Low Visited Site Signed Up Activation Billed 2,177 14 3 1 0.6% 21.4% 33.3% 0.0%
- 56. ©2015 StratAlign Group Cohort Analysis
- 57. ©2015 StratAlign Group Track Events Across Cohorts
- 58. ©2015 StratAlign Group The One MetricThat Matters At least 7 friends within 10 days of signing up Getting a new user to link a device and add a file Once a user follows 30 people, they’re more or less active forever If someone comes back a day after signing up for a game, that is a leading indicator of them becoming an engaged and paying user.
- 59. ©2015 StratAlign Group Post Launch Stages 1. Product/Market Fit USER DISENGAGE D USER ENGAGED USER REACTIVAT E TRIAL OVER PAYING CUSTOMER DISSATISFI ED RESOLUTIO N DISENGAGE D REACTIVAT E CANCEL CANCEL ACCOUNT CANCELLED OR BILLING INFO EXPIRES Free user disengagement Paid Conversion Support Data Reactivaton Rate Freemium Churn Trial Abandonment Rate Disengagement
- 60. ©2015 StratAlign Group Post Launch Stages 1. Product/Market Fit 2. Revenue Growth USER DISENGAGE D USER ENGAGED USER REACTIVAT E TRIAL OVER PAYING CUSTOMER DISSATISFI ED RESOLUTIO N DISENGAGE D REACTIVAT E CANCEL CANCEL ACCOUNT CANCELLED OR BILLING INFO EXPIRES Free user disengagement Paid Conversion Support Data Reactivaton Rate Freemium Churn Trial Abandonment Rate Disengagement PAID DIRECT SEARCH WOM Customer Acquisition Cost VISITOR FREEMIUM/ TRIAL OFFER ENROLLME NT Long funnel health INHERENT VITALITY INVITE OTHERS Viral coefficient Viral rate
- 61. ©2015 StratAlign Group Post Launch Stages 1. Product/Market Fit 2. Revenue Growth 3. Profit USER DISENGAGE D USER ENGAGED USER REACTIVAT E TRIAL OVER PAYING CUSTOMER DISSATISFI ED RESOLUTIO N DISENGAGE D REACTIVAT E CANCEL CANCEL ACCOUNT CANCELLED OR BILLING INFO EXPIRES Free user disengagement Paid Conversion Support Data Reactivaton Rate Freemium Churn Trial Abandonment Rate Disengagement PAID DIRECT SEARCH WOM Customer Acquisition Cost VISITOR FREEMIUM/ TRIAL OFFER ENROLLME NT Long funnel health INHERENT VITALITY INVITE OTHERS Viral coefficient Viral rate UPSELLING CAPACITY LIMIT FORMER USERS FORMER CUSTOMERS Tiering Upselling Rate Unpaid Churn Rate Paid Churn Rate User Lifetime Value Customer Lifetime Value
- 62. ©2015 StratAlign Group Post Launch Stages 1. Stickiness 2. Traffic 3. Revenue PAID DIRECT SEARCH WOM INHERENT VITALITY Customer Acquisition Cost VISITOR FREEMIUM/ TRIAL OFFER ENROLLME NT USER INVITE OTHERS DISENGAGE D USER ENGAGED USER REACTIVAT E TRIAL OVER PAYING CUSTOMER UPSELLING CAPACITY LIMIT DISSATISFI ED RESOLUTIO N DISENGAGE D REACTIVAT E CANCEL CANCEL ACCOUNT CANCELLED OR BILLING INFO EXPIRES FORMER USERS FORMER CUSTOMERS Long funnel health Free user disengagement Paid Conversion Tiering Upselling Rate Support Data Reactivaton Rate Freemium Churn Trial Abandonment Rate Disengagement Unpaid Churn Rate Paid Churn Rate User Lifetime Value Customer Lifetime Value Viral coefficient Viral rate
- 63. ©2015 StratAlign Group • Measure engagement • DAU/WAU – What does active mean? • Segment • New Functionality • Does it improve stickiness? • How do we measure that? • Lazy registration Stickiness
- 64. ©2015 StratAlign Group 10X Product Launch
- 65. ©2015 StratAlign Group How to Hack Growth
- 66. ©2015 StratAlign Group It’s ALL About Onboarding
- 67. ©2015 StratAlign Group 1. Find OutWhy Talk to your customers
- 68. ©2015 StratAlign Group 2. DetermineYour Hypothesis onWhat Engaged Behavior Looks Like Are your customers solving their problem? What is the definition of engaged for your product?
- 69. ©2015 StratAlign Group Get a Baseline Signed Up Login Uploaded Photos Tag Photos 2,177 366 41 3 16.8% 11.2% 7.3% 0.0%
- 70. ©2015 StratAlign Group Create a Dashboard
- 71. ©2015 StratAlign Group 3. Create an Intervention and Do It
- 74. ©2015 StratAlign Group Bugsnag captures errors from your web and mobile applications. The first email they send to new signups is very simple, but has been yielding great results. Hey {{ first_name }}, I'm James, CEO of Bugsnag. I wanted to reach out to see if you need any help getting started. Cheers, James Surprise Personal Email
- 75. ©2015 StratAlign Group Bad We've missed you on CouchSurfing! It's been a long time since we've seen you around! The last time you logged into CouchSurfing was four months ago. Props to Segment.io
- 76. ©2015 StratAlign Group The Last EmailYouWill Ever Send A lot has changed since you left – so we'd like to offer you another FREE trial! Come back to Netflix and enjoy newly addedTV shows & movies – for free. Now includingWii, PS3, Xbox 360, iPhone, iPad, Android and more. Questions? 1-888-357-1516 / 24 hours a day
- 77. ©2015 StratAlign Group In App Intervention
- 79. ©2015 StratAlign Group 4. Perform a Cohort Analysis
- 80. ©2015 StratAlign Group 5. Analyze the Results
- 81. ©2015 StratAlign Group 6. D.C. al Fine Create a Hypotheses Measure the Results Test the Hypotheses With an Intervention Proceed, Pivot, or Punt
Editor's Notes
- #31: Nobody releases the right product the first time out of the gate
- #32: Releases of improvement is adding more features, which compounds the problem because you don’t know what is wrong
- #34: Not a programmer
- #55: Flickr started out as MMO software Released Glitch and it failed
- #64: Expensify and traveling sales rep Balsamiq and UI designer Color scaled without stickiness (41MM and 1 year to get 30K users) Medical marijuana with phone field
- #68: Ask them what they need to be engaged – call your first 100 customers Eztexting did a A/B test and found 31% increase in signups (without chatting)\ Ecommerce 48% increase amount spent with olark
- #73: 3 hours later
- #75: 2 minutes after someone signs up, they get a one-line email directly from James, the CEO of Bugsnag, asking if they need any help: People reply to this email a whopping 22% of the time. First, the email sets up a direct channel for support questions. The fact that you care about this customer is what gives the email it's mojo. Second, by delaying the email 30 minutes, people who got distracted come back and finish setting up even if they never reply. The result is happier customers and better conversion.