{SUCCESS

By Robert Diliowww.leanconversion.net

Startup = A human institution designed to create new products and services under conditions of extreme uncertainty.

As the world becomes more uncertain, it gets harder and harder to predict the future. The old management methods are not up to the task.

Lean Startup: The application of lean thinking to the process of innovation.

Our current business model is flawed pertaining to breakout sustained growth.

It’s uncertain who are new customers will be and what they will find valuable. Testing and experimentation are required. The 200 year old lean

startup?

Coming up with a plan to avoid Vanity Metrics and worse…“Success Theater”.

Identifying how we want to measure success for a given product or feature.

Focusing on the goals we want to track for sales conversion funnels.

Defining our Value and Growth Hypothesis.

Identifying the customers we are targeting.

What are we doing?

Topics of discussion that are out of scope for success planning go in the Parking Lot.

Not discussing legacy business problems.

Shelving topics that take longer than 10 minutes to discuss for later review.

No idea is crazy.

Rules of Engagement

How do we know our product is creating value for our customers once they are using it?

What should we measure to gauge value to the customer?

What experiments could we run in real time that would server as the proxy for the value customers are gaining?

Value Hypothesis

How will new customers discover the product or service?

How will the product spread from early adopters to mass adoption?

What is the Engine Of Growth for sustained growth of the product?

It’s essential that we understand the reason behind our growth or lack of it.

Growth Hypothesis

Where does sustainable growth come from? Sustainable = New customers come from

the actions of past customers. Four primary ways customers drive

sustainable growth: Word of mouth – Growth is caused by satisfied

customers’ enthusiasm for the product As a side effect of product usage – Drive

awareness whenever a product is used virally. Through funded advertising Through repeat purchase or use – Products

purchased repeatedly through a subscription plan.

Sustainable Growth

The Sticky Engine of Growth Products are designed to attract and

retain customers for a long time. Customers check constantly and

repeatedly for new items, sales, etc. Success for sustained growth is

determined by how likely customers are to be repeat customers.

i.e. Microsoft Office customers are unlikely to switch to Google Docs even though it’s free.

Engines of Growth

The Viral Engine of Growth Growth happens automatically as a side effect of

customers using the product. Viruses are not optional.

Viral growth is measured by a single mathematical term called the “viral coefficient”.

Viral Coefficient – How many new customers will use a product as a consequence of each new customer who signs up?

How many friends will each customer bring with them?

Companies or products that rely on the viral engine of growth must focus on increasing the viral coefficient more than anything else!

Monetary exchange does not drive growth, it’s only an indicator !

Engines of Growth

The Paid Engine of Growth How much does it cost to sign up a new

customer? The cost of customer acquisition is a driving

factor for profitability. Either increase the revenue of each customer, or

drive down the cost of acquiring new customers. Customer LTV (Lifetime Value) – the amount of

money a customer pays over their “lifetime” once any variable costs are deducted.

In our case may require an Engine of Growth Pivot to reach the necessary growth for profitability.

Engines of Growth

What are the demographics and behavior of the customers we are targeting for this product or service?

How can we measure to see if we’re reaching this demographic?

What distribution channels will we be the initial focus of our MVP?

Should we interview customers and at what stage?

Who Are Our Customers?