Making Sense of Lean Startup Strategies
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The document discusses lean startup strategies, emphasizing methodologies like the Business Model Canvas, Minimum Viable Product, and customer development to achieve product-market fit. It highlights the importance of quickly testing ideas, iterating based on user feedback, and the necessity of understanding user habits through desire engines. Additionally, it touches on metrics to measure growth and the significance of achieving critical mass in product adoption.
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Making Sense of Lean Startup Strategies
- 1. MAKING SENSE OF LEAN STARTUP STRATEGIES WWW.SQUAREPRISM.COM Sep 2012
- 2. NEW JARGON AND TECHNIQUES Lean Startups Business Model Canvas and Lean Canvas Customer Development Minimum Viable Product and Minimum Desirable Product Desire Engine, Habit forming technologies AAARR Metrics Growth Hacking 1
- 3. SO WHAT HAS CHANGED THE MARKET? Rails, Node, Grails, Lift MVC based client-side Javascript Extremely agile web technologies frameworks that have reduced product dev cycles Faster turnaround times to build proof of YCombinator, concepts 500Startups, TechStars Indian Angels, Access to early Access to cheap Cloud – Amazon, stage funds Infrastructure for Morpheus, others rent (Cloud) Google, Heroku Emergence of accelerators Opex versus Capex Reduced setup/fixed costs Design standards Facebook, Twitter, HTML5, CSS3 that provide Emergence of mega Google+ and now social platforms for excellent user marketing Instagram, Pinterest Mobile browsers and rich experience UI native platforms Application AppStore, Google Play, Non-geeks able to Platforms on Mobile use latest tech others Ability to provide user interfaces to non- Increased reach at lower technical consumers costs 2
- 4. HAS “CROSSING THE CHASM” BECOME EASIER? High-Tech Marketing Model a la Geoffrey Moore (circa 1991) Find consumers that can cross reference each other Target Pioneers and Early Adopters, Meet their needs and then move to Mainstream consumers and laggards Provide a “change agent” product to early adopters and “productivity improvement” product to mainstream consumers Moore’s strategy to cross the chasm was to address the diverse requirements of early adopters and mainstream consumers separately. Target a niche segment of mainstream consumers to rapidly grow in one segment before the next In today’s context of building software as service solutions the time to jump across the chasm by quickly iterating from “change agent” features to “productivity improvement” features may make or break the product 3
- 5. LEAN STARTUP: TEST AN IDEA FOR VIABILITY The lean startup philosophy encourages quickly releasing products to receive user feedback and iterating on strategy to reach product-market fit Build-Measure-Learn-Build-Measure-Learn.. Identify early adopters, Build a Prototype, Test it with users Release early and get feedback from real users Test both Product and Business feasibility and viability Product Feasibility and Viability Is it possible to build this product with available technologies before I run out of time and money Business Feasibility and Viability Will this business become profitable before I run out of time and money? Minimum Viable Product A concept or product that can be tested in a real market to satisfy the above assumptions 4
- 6. A FRAMEWORK TO TEST AND VALIDATE ASSUMPTIONS Business Model Canvas 5
- 7. TEST BEFORE YOU SCALE THE BUSINESS Agile Product Development Customer Development Pivot Build-Measure-Learn-Build-Measure-Learn.. Until you are sure your business will scale profitably Measure and Pivot when things don’t work out Until you start making profit Unless you run out of Cash or Time! Get to the Minimum Viable Product that fits into a Market 6
- 8. WHAT IF THE PROBLEM/SOLUTION IS NOT OBVIOUS? Hard to build products that require lifestyle change in consumers Business maybe viable only if you get a million users only if you grow your platform to critical mass Build a Minimum Desirable Product! 7
- 9. HOW DOES ONE CREATE DESIRE? Habit-forming technologies! Build Desire Engines Triggers Actions (Doing < Thinking) Variable Rewards Commitment Fogg Behavior Model Behavior = motivation.ability.trigger Many Cycles Take users through one cycle quickly Take users through many cycles quickly More cycles = Habit Map your product features to the desire engine cycle ! 8
- 10. HAVE WE GOT TO CRITICAL MASS? Measure using AARRR metrics (Dave McLure, 500Hats) Acquisition Activation Retention Revenue Referral Acquisition Activation Retention Revenue Referrals Also measure growth Number of daily active users / Number of monthly active users (DAU/MAU) Many popular social sites struggle to be > 5% Facebook = 58% http://www.nirandfar.com/2012/05/never-take-your-eyes-off-this-hacker- metric.html 9
- 11. BUILDING A PLATFORM? HACK TO REACH CRITICAL MASS Widgetify Provide tools for personal creation (Youtube) Seed Fake it till you Standalone make it Community (Paypal) (Youtube) Make producers invite their consumers (Slideshare) Get Super connectors Focus on Transactions to reduce traction on both sides(Groupon) Piggyback on existing networks (Paypal, Aribnb) 10
- 12. REFERENCES Crossing the Chasm, Geoffrey Moore The Lean Startup, Eric Ries Business Model Generation, Alexander Ostwalder Four Steps to Epiphany, Steve Blank Minimum Desirable Product, Andrew Chen’s Blog Desire Engine Canvas, Nir and Far Blog, Nir Eyal AARRR metrics, Dave McLure Growth Hacks from platformed.info, Sangeet Paul Chaudary 11
- 13. COMMENTS? 12