thinking lean presentation
TRANSCRIPT
Thinking Lean – For Startups And Investors
Chu Tzu Ming
www.impersuasion.com
Note: Applicable for software/ web type companies only coz I know nothing much about anything else
Why I am Here• I became moderately good at Excel after 10
years in the venture capital industry.
• I have scars and tattoos to share with you.
• I had to unlearn what I learned.
• We share so we can learn from mistakes.
• Movement – is the next cornerstone in corporate culture
“You don’t get extra points for learning things the hard way “ – Mr. Kawasaki
Textbook Model (Kilang Model)Write Bplan (30
pages and forecasts)
Form Team
Get Funding
Build Product
Marketing
Sell/Hire Sales guy
What’s wrong with this?Nothing. It just doesn’t
work very often, it’s wasteful and it gets
people into debt
RIP
Oh, that’s the risk inherent in early stage companies, too bad…
The ones that succeed –know who to sell to
somehow and end up doing what they did b4.
How Things Get Screwy• Founders:
– They don’t know what problem they’re solving, feature driven instead.
– They confuse a feature with a ‘product’.– They’re not subject matter experts – yet.– Lack a clear/repeatable path to the customer– They don’t know if customer thinks they add value. (The “I
think so” syndrome)– They don’t know who’s going to buy immediately– They always say I need the money first to start. Many end
up getting old.– ‘Corporate Drama’ – investors, fellow founders are
lazy/greedy/ team problem/ husband and wife/bf/gf
This Lean Startup* Thing…
Write 2 page Bplan/Problem Form Team
Small Funding/Bootstrap/MSI
Build Prototype/
MVP
Test Marketing
Sell/Hire Sales guy
Refining Sales Methodology
Repeat Orders/ Feedback
Scale
VC Round: Optional
Note*: Eric Ries, Steve Blank’s Four Steps to the Epiphany
Evaluate Team/Equity contribution
Customer Discovery
Product/market fit/Validation
Lean Startup Steps/Activities
Customer Development
“So What’s Different?”
– It’s Actionable Data To Validate Learnings
- ‘Calculated’ Risks
-80/20 principle
- Lean Not Waste
- Small Wins
- Agile/Pivot
- Accountability
“You Scale Only When You Have RECURRING Customers And Revenue”
The FunnelAcquisition – FB, SEO, Paid Traffic
Activation – Attention Confirmed. Clicks, Likes, sign ups, comments, downloads
Retention – Returning visits, usage, comments Referral–
Invites, Backlinks, shares, mentions, retweets
Revenue, Goal - $$$, sign ups, Invites
Your Goals May Be One Any Of The Metrics Themselves
Virality – Mechanics
Invites SentNo of People Infected Who
Invite
No of People Who accept
Invitation
Y (Activation Rate)= 100 or 100/10,000=1%
X (Volume)= 100,000 Z (Invite Rate)= 1or 1/100 =1%
Viral Coefficient=xyz > 1=10,000* 1% * 1%=1
•Think how Movies Work, Malaysiakini, Gmail
•Network Marketing
Metrics
• AARRR
• Costs Of Customer Acquisition
• Virality/Word of Mouth (lowers Avg Cost Per Cust Acquistion)
• A/B testing (offline/online) on Conversions
• Sales Conversions
• Customer Lifetime Value
How Does This Fit Again?
Acquisition Activation Referral Retention Revenue/Goal
X Invites
Y Accept Invites
Z Reinvites
1. DEFINE AARRR OBJECT PURPOSE2. DEFINE XYZ Elements3. DEFINE ACTIONS
Tools & Leverage
Build Prototype
Test Marketing
Refining Sales Methodology
Minimum Viable Product (MVP)LAMP/RORAmazon AWS, herokuWordpress, Uservoiceprogrammableweb, GOOG, FB, Odesk
PPCSurvey monkey/Poll daddyGoogle Analytics/Crazy eggWebsite optimizer/Tracking Urls
Robert Cialdini, InfluenceDirect response MarketingLinkedinDan Kennedy/Joe PolishNegotiation Skills
Viral Loop (Tell a friend), FBAutomated Email marketing/sequencesSEO/Online PR/Online PR
Traffic, bootstrapFB groups, pages, emails
Scaling
“What About Investors?
-LS Enables Intelligent Risk Assessment For Early Stage Companies”
Deal Assessment• Metrics – Clearer Risk Profile To Early Stage
Projects– Market Definition And Size (ground up), Keyword
Research– AARRR– Analytics, funnels, conversions, time on site– ROE (Return On Effort)– Leverage Metrics: How much faster, better, cheaper?– Invest less, less onerous terms (to the
entrepreneur), close more deals.
• Talk to customers or to-be customers.– Is this problem something they would pay to solve– Would they buy it today if it was ready?
Caveats
• Don’t measure for the sake of measuring
• Make ‘Lean Startup’ a habit when you have no money/limited budget. It’s hard to do it when you have loads of cash.
Resources
• Eric Ries, Steve Blank’s blogs• Ash Maurya’s blog• Quicksprout.com• Viral Loop- Adam Penenberg• Founders at work - Livingston• Books on dealing with difficult people• Praying• Tenacity through exercise• Dave McClure’s prez on Slideshare• Rework – Jason Fried/David Hansson• 80/20 Principle – Richard Koch• www.impersuasion.com
