sean ellis - boston 12 16 09
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Sean Ellis presentation at Dogpatch Labs in Cambridge, Ma on December 16, 2009.Blog: Startup-Marketing.comFollow @ http://twitter.com/seanellisTRANSCRIPT
Sean EllisBoston, MADecember 16, 2009
Unlocking Your Startup’s Growth
Startup Risk & Upside = Customers
1. Traction is tough2. Acquiring at scale even tougher3. Where do you start?
Hundreds of things you “could do”Most early marketing effort wasted
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Road to IPOs: What I Thought Mattered?
1. Apply engineering to marketing2. Focus on right metrics & optimize3. Understand users and use cases4. Early execution is most critical
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CriticalZone IPO
sGrowth Stage
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My Key Focus Now Critical Zone
Then light advising in growth stage
Customer Development Sequence
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Growth
Transition to Growth
Product/Market Fit
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Growth Starts with Right Product
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Growth
Transition to Growth
Product/Market Fit
What is Product/Market Fit?
1. People want/need your productAnd they represent large enough market
2. Differentiated from alternatives3. Users will pay for your product
Or you are advertising supported
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“Focus obsessively on getting to
product/market fit.”
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Marc AndreessenFounder Netscape, Opsware, Ning
PayPal’s Quest for P/M Fit
1. $200K seed funding - cryptography“No one really needed it” Max Levchin
2. $4.5M VC funding - PDA paymentsPeople preferred web demo (100X users)
3. $1.5B sale to eBay – web payments
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Survey Your Product/Market Fit
• Free template at Survey.io
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Key Product/Market Fit Question
“Very Disappointed” My Recommendation
0% – 25% Keep burn low, engage, iterate
26% – 39% Try repositioning, retargeting
40% – 100% Proceed up pyramid
“How would you feel if you could no longer use Product?”
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Transition to Growth
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Growth
Transition to Growth
Product/Market Fit
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Race to Scale
1. Focus on speed rather than short-term burn
Long-term burn will be less with speedDifficult after “low burn” VC praise
2. Requires major shift in culture
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Transition to Growth
1. Track/report right metrics
2. Positioning (based on perceived value)
3. Start recruiting head of marketing4. Viable economics (business model)5. Scalable growth strategy
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Hiring/Managing VP Marketing
1. Hire marketer with founder DNA2. CEO & VP Marketing form
partnershipCEO shouldn’t abdicate startup’s fateGoal = Scalable, profitable channelsInsist on perfect execution
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Optimize Before Growing
1. Landing pages
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8% 12% 13%
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…
2. Optimize Funnel
Signup
Home Page
Path 1
200,000
100,000
100000
50000
X000PaidX00
PaidX00
FreeX000
X00025000
50%
12.5& 12.5%
X% X% X% X%
Path 1 (step 2)
Path 225000
X000
X%
X00
Free
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Scalable Growth Now Possible
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Growth
Transition to Growth
Product/Market Fit
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Driving/Managing Growth
Monitor Growth
• Anything broken?
• Retention
Manage Campaigns
•Optimize and scale campaigns on ROI
Develop New Campaigns
• Test new sources
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Budget to maximize positive ROI spend
Test from Free to Paid Channels
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Channel Cost/user Scalability Viral/referral Free High Email (internal) Free Organic Blog Free Organic SEO Free or Paid Organic Widget Free or Paid Organic Biz Dev/Partners Free or Paid High Domains Paid (low) Low PR Paid (low) High Email (external) Paid (TBD) High SEM Paid (TBD) Can be High Contest Paid (TBD) Organic Affiliate/lead gen Paid (TBD) High Radio Paid (TBD) High TV Paid (TBD) High
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Improve Lifetime Value
1. Customer retention is critical2. Cross/up sell additional products3. This expands profitable channels
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Complete Startup Pyramid
Twitter: @seanellisBlog: startup-marketing.com
Growth
Optimize
Economics
Positioning
Product/Market Fit