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FELLOWS CLASS #3 DECEMBER 4TH, 2014
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• LAST WEEK’S READING / VIDEO • HOMEWORK #2 TIPS: DILIGENCE - PRESENTED DECEMBER 12TH • PRODUCT / MARKETING LECTURE • REAL WORLD PERSPECTIVE: JOSH BOWEN, CROWDTWIST • QUESTIONS
IN TODAY’S CLASS...2
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HOMEWORK #2: DILIGENCE3
TELL A STORY:
YOU KNOW HOW WHEN... THE PROBLEM
WOULDN’T IT BE GREAT IF... THE GAP / INEFFICIENCY
WELL, WE CREATED.... THE SOLUTION
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HOMEWORK #2: DILIGENCE
IDENTIFYING THE MAJOR PLAYERS / COMPETITION:
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PRODUCT & MARKETING5
“A STARTUP IS A TEMPORARY ORGANIZATION IN SEARCH OF A SCALABLE, REPEATABLE, PROFITABLE
BUSINESS MODEL”-‐ STEVE BLANK
SERIAL ENTREPRENEUR, FOUR STEPS TO EPIPHANY
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“A STARTUP IS A HUMAN INSTITUTION DESIGNED TO CREATE A NEW PRODUCT OR SERVICE UNDER
CONDITIONS OF EXTREME UNCERTAINTY”-‐ ERIC RIES
FOUNDER, THE LEAN STARTUP
PRODUCT & MARKETING
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MARKET / CUSTOMER
“SO OFTEN PEOPLE ARE WORKING HARD AT THE WRONG THING. WORKING ON THE RIGHT THING IS PROBABLY MORE IMPORTANT THAN WORKING HARD”
-‐ CATERINA FAKE FOUNDER, FLICKR, PINWHEEL
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MARKET / CUSTOMER
“BE A USER OF YOUR OWN PRODUCT. MAKE IT BETTER BASED ON YOUR OWN DESIRES. BUT DON’T TRICK
YOURSELF INTO THINKING YOU ARE THE USER”-‐ EVAN WILLIAMS
FOUNDER, TWITTER, MEDIUM
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MARKET / CUSTOMER
YOU’VE DONE SOME RESEARCH, IT’S TIME TO TEST YOUR IDEA:
HIT THE STREETS!
“THERE ARE NO FACTS INSIDE THE BUILDING, SO GET THE HECK OUTSIDE!”
-‐ STEVE BLANK SERIAL ENTREPRENEUR, FOUR STEPS TO EPIPHANY
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THE MVP:
PRODUCT10
BUILD
MEASURE
LEARN
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PRODUCT 11
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PRODUCT12
VALIDATED LEARNING:• FAIL FAST • FAIL CHEAP • ADDRESS KEY RISKS UPFRONT • LET THE DATA TELL A STORY
TEST HYPOTHESES
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PRODUCT13
“IF YOU’RE NOT EMBARASSED BY YOUR FIRST LAUNCH, YOU LAUNCHED TOO LATE”
-‐ REID HOFFMAN FOUNDER, LINKEDIN
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PRODUCT14
THIS WAS NOT BUILT IN A DAY
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PRODUCT: MVP15
START WITH THE SIMPLEST POSSIBLE IMPLEMENTATION:• GROUND UP: FINE TUNE BASIC FEATURES • CREATE ACTIONABLE METRICS • DEMONSTRATE CAUSE AND EFFECT • LISTEN AND LEARN FROM CUSTOMERS
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BUILDING A MVP16
FROM MVP…
…. TO TODAY
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BUILDING A MVP
FROM MVP…
…. TO TODAY
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BUILDING A MVP
FROM MVP…
…. TO TODAY
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BUILDING A MVP
LEARN FROM METRICS• ITERATE • PIVOT • SPLIT (A/B) TEST • CONTINUOUS DEPLOYMENT
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BUILDING A MVP20
KANBAN
LEAN MANUFACTURING
• VISUALIZE WORK • LIMIT WORK IN PROCESS • FOCUS ON FLOW • CONTINUOUS IMPROVEMENT
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PRODUCT / METRICS21
STARTUP METRICS ARE OPERATIONAL, NOT FINANCIAL• WEBSITE TRAFFIC (E.G. PAGEVIEWS, UNIQUES, TIME SPENT, ETC.) • USER REGISTRATIONS • USER ACTIVATIONS • DAILY ACTIVE USERS (DAU) • MONTHLY ACTIVE USERS (MAU) • PAYING CUSTOMERS • MONTHLY REOCCURRING REVENUE (MRR) • CHURN • RETENTIONS: 30+, 90+ DAYS • LIFE TIME VALUE (LTV) • REVENUE PER USERS (RPU) • VIRAL COEFFICIENT
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PRODUCT METRICS22
LARGE COMPANIES NEED FINANCIAL TOOLS TO MONITOR HOW WELL THEY ARE EXECUTING A KNOWN BUSINESS MODEL....
... AND STARTUPS NEED METRICS TO MONITOR HOW WELL THE SEARCH FOR A BUSINESS MODEL IS GOING. TO ULTIMATELY ANSWER THE BURNING QUESTION:
IS THIS BUSINESS MODEL WORTH SCALING INTO A COMPANY?
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TYPES OF BUSINESS MODELS23
STANDARD BUSINESS MODELS:• AD-SUPPORTED (BRAND PARTNERSHIPS) • PAID (SUBSCRIPTION / ONE-TIME) • IN-APP PURCHASES • FREEMIUM • FREE (TEMPORARILY...) • LICENSING
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SCALING EARLY WITH BRANDS24
EARLY STAGE COLLABORATION WITH BIG BRANDSPROS: • EARLY PROOF OF CONCEPT (VALIDATION) • BUILD A BETTER MOUSETRAP • POTENTIAL TO DISCOVER NEW USE CASES OR REVENUE STREAMS • BRANDS (SOMETIMES) LOVE FIRST MOVER ADVANTAGE • PRESS OPPORTUNITIES • BARTER PILOT COSTS FOR INCREMENTAL EXPOSURE (E.G. FACEBOOK POSTS, EMAIL
CONS:
• PARTNERSHIPS CAN CAUSE DISTRACTIONS • REQUIRE SIGNIFICANT BANDWIDTH • PILOTS ARE TYPICALLY LOW/NO REVENUE • OFTEN SLOW TO EXECUTE
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SCALING EARLY WITH BRANDS25
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REAL WORLD PERSPECTIVE26
JOSH BOWEN • CO-FOUNDER AND COO • TECHSTARS NYC GRADUATE • 15 YEARS IN SOFTWARE AND DIGITAL MEDIA • CORNELL UNIVERSITY: ELECTRICAL ENGINEERING
FOUNDER SPOTLIGHT!
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• HOMEWORK ASSIGNMENT #2 DUE! • MEETINGS WITH VENTURES TEAM • MARVIN LIAO, PARTNER FROM 500 STARTUPS • CLASS WILL GO UNTIL 130P (OPTIONAL TO STAY LATER)
NEXT WEEK...27
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