Download - Innovation accounting at BackupAgent
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Robbert van Geldrop| Founder and CTODelft| 11 may 2012
Innovation Accounting at BackupAgent
Lean startup principles put to practice
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Agenda
About BackupAgent
Our traditional accounting
Build, measure, learn for BackupAgent
Examples of actionable metrics
The future
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About BackupAgent
Vendor of Cloud Backup Software • Founded in 2005, Funded in 2007 by Solid Ventures• HQ in Delft, The Netherlands
No direct sales; exclusive through:• (Hosting) Service Providers• Telcos• Cloud Service Brokers • OEM agreement
Where are we• Profitable business• 400+ partners in 50+ countries
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Our Business model BackupAgent currently sells
monthly software licenses to
partners:• Base and platform fees• Usage fees
(per subscriber and stored GB)
Optimize LTV per partner:• Provide marketing and
product support to partners’ SMB customers
• Leverage usage fees by developing additional features
High availability
Multi-tenant
Private label
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Our traditional accounting
We built a very powerful Rolling Forecast tool:• Excel sheet that anybody can use and understand• Integrates directly into our administration• Gives is absolute insight in cash flow at any time in any scenario
We think every startup should use this, but:• It only captures the financial side of startup ‘progress’• It’s actionable on cost-side but not on revenue side
This tool is great for reporting to the outside world and keeping
track of cash-flow.
It does not provide break-through insights
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We build Cloud Backup Software
Our desktop software has an unattended
automatic update feature
We apply Scrum and Kanban
The key question is always what to build or improve next
Build
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We have a lot to measure:• Which features are customers
using?• On which platform are they
installing it?• Which features can our
partners sell best and why?
Business model:• How to charge partners?• How much customers are
they bringing in?
Measure
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We measure software usage
through DeskMetrics:• Features• OSes• Demographics
We keep track of our install
base through license
reporting:• Increase of users• Increase of TBs
Measure
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BackupAgent ALWAYS enriches data with in-depth interviews:• You need to know about cause and reason that hides behind data• These reasons and causes make the data actionable
Customer development is the best methodology for this
Measure – qualitative data
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‘A cohort is a group of people who share a common characteristic
within a defined period’
Cohorts can teach us about potential to scale and sustainability:
The hard part is how to choose your cohort
Do it yourself: http://www.alivelearn.net/?p=1240
Measure – Cohorts!
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Learning is not a system:• BackupAgent is only starting to embed the learning part• It’s the softest side of Lean Startup
Active learning can be captured by the Business Model Canvas
It’s the process that goes behind making and updating the canvas
that really matters
Not all learning takes places at a time you plan for it, ideally
anyone could instantiate his/her own little iteration
Learn
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Learn – BackupAgent’s Canvas
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Real-life examples
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We wanted to validate the
sustainability of our partner model:• Recruiting new partners is
expensive• Not all of our partners are selling
our services successfully
A sustainable partner network
validates further investment:• Increase marketing• Develop new features faster
BackupAgent’s cohortsCohort analysis shows partnerships are very sustainable over time:
This includes churn, so successful partners outgrow churning
partners consistently.
Invoiced usage fees per cohort of activated partners per Q
Metrics validate scaling of marketing effort:• Average Lifetime Value (LTV) = ±12,000 EUR• Cost of Acquisition (COCA) = ±5,500 EUR• 100% recurring revenues
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We wanted to know if further improvement of our Exchange 2007
plugin would be a good idea:
Remember: we interviewed our partners about this too and they
confirmed this finding
Validation of features and improvements
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New features – surveys and interviews
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Support
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yper-
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re data
).0%
10%
20%
30%
40%
50%
60%
Partners
Partners
Mailbox level backup restore is an improvement for Exchange plugin
‘I consider BackupAgent incomplete without this feature’
‘I am looking for alternatives for this.’
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The build-measure-learn iterations must become a repetitive process:
The future – closing the loop
Follow us@BackupAgent
facebook.com/BackupAgent
youtube.com/user/backupagent
linkedin.com/company/backupagent-bv
Questions?Thank you for listening
Robbert van Geldrop
@rvangeldrop