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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

Mailbox L

evel

Restore

Exch

ange

2010

Support

for Syst

em St

ate back

up on Windows S

erver

2008 R2 / SBS 2

011.

Support

for Share

point 2007/2

010.

Support

for VMW

are an

d/or H

yper-

V host-base

d backups.

Client fo

r iPhone/A

ndroid (to

be able

to resto

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

robbert@backupagent.com

@rvangeldrop