Hiten Shah, CEO, Kiss Metrics


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Presentation by Hiten Shah (CEO, Kiss Metrics) at the 'Lean Startup, Lean Investor' event on November 3, 2010 (Produced by 500 Startups & Nokia/Nokia Growth Partners)

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  • Introduce myself.
  • I don’t know a single entrepreneur who would disagree with this statement. And many of you know, I know a lot of entrepreneurs...
  • I’ve failed a lot and I want to fail faster and fail smaller. By now, everyone knows that successful startups are a series of “failures”. You can’t succeed without trying a lot of things that don’t work.
  • In this picture everyone is out of the building talking to customers or...
  • Talking to one of these guys... Jokes aside, I am humbled to have these guys involved with KISSmetrics. I won’t talk about them, since you all probably know of them. Personally, I’ve learned a lot from them about startups and entrepreneurship.
  • Sean Ellis and his 3 stages of a startup Metrics of success are different. Reminds us where we are and our success metrics...
  • AARRR!!! Dave McClure’s pirate metrics. Helps you frame key areas of your business based on a customer’s lifecycle. Helps determine the tactics you should be thinking about. We use this for idea generation.
  • And of course, Eric’s lean startup graphic. It’s all about validated learning about customers... So we can build something a LOT of people want to buy.
  • So now i’ll go into our story at KISSmetrics on how we think of Building, measuring and learning faster....
  • Have the ability to ship code all day, every day. This leads to faster, more measurable iterations...
  • This has resulted in sub-par, sub-optimized code. But our customers don’t care, in fact they are delighted by our daily iterations. Customer’s don’t care how awful the code is and you shouldn’t either. Remember, it’s about getting validated learnings...
  • Here are some key areas and tools we use for measuring our business. Idea is to focus on a few key pieces of data at any given time. Here is one way we do that...
  • We came up with a model for our business. We then establish our actual baseline which became our macro metrics. Find the riskiest assumptions in your model and macro metrics. And attack them...
  • Learning is all about testing your assumptions. Put up landing pages, added navigation, whatever it takes... To get validated learnings about customers. Learn about the key risks in your model.
  • We always try to write down our hypothesis, so we know what we are trying learn. Question: Is this hypothesis in fact true or not?! Take the least amount of effort to find out... Ex. Orig. hypothesis for KISSinsights...
  • The principles of build, measure, learn help us think about how to get answers. The rules of communication and information exchange are much different in a lean startup. The tactical stuff to build, measure and learn faster is one side of things. Now I’m going to talk about the business processes and what we have learned.
  • Company is divided into two teams. No sales, marketing, etc... Problem team identifies the most important problems to solve. Solution team finds the minimum solution for each problem. Goal is to go through this cycle continuously.
  • Monday - Team meeting to describe most important problems and goals for the week. Metrics + Few tasks, Tuesday. Wednesday - Check in on how are we doing, solutions already getting implemented? What have we learned so far? Friday - Postmortem on learning and peek into next week from the Problem Team. Problem team is 1-week ahead.
  • Tool to increase autonomy and communication, focused on our validated learnings driven process. Weekly goal and metrics based on most important problems. Team visibility across all tasks, keep solution team focused on important problems. Provide tools for problem team to identify next things. 5 tasks person, only 1 is active (green-lighted), not in here then not exist, backlog.
  • We’ve learned some lessons in our efforts to apply lean startup principles. Here are three key ones.
  • Optimizing one area in the BML loop causes bottlenecks in others. Once we implemented the infrastructure to build faster, we then increased our ability to discover customer problems. But didn’t have a good process for organizing and finding solutions. Once we had that, we started discovering a lot about our team...
  • They became more accountable. Team members started “policing” themselves. One of our engineers likes to get himself in a hole and just code for days. Doesn’t come up for air and only 50% of time does he produce fantastic results. Our process helped him catch himself and in fact stop before he went on for a long time.
  • Quote from our CTO, John. A lot of discipline is required to stay focused on validated learnings. We now focus on iteration based on validated learnings instead of perfection. This was really hard, we are a team of perfectionists!
  • Hiten Shah, CEO, Kiss Metrics

    1. 1. The Lean Startup in Action A Case Study on KISSmetrics Hiten Shah Customer Driven Design & The Lean Startup • November 3rd, 2010
    2. 2. Build stuff people want to buy
    3. 3. Failure attracted me to the Lean Startup
    4. 4. Lean Startups are Built to Learn
    5. 5. Dave McClure Sean Ellis Eric Ries Lean Startup Heroes
    6. 6. The Startup Pyramid The Race to the Top Product / Market Fit Transition to Growth Growth Sean Ellis: Startup-Marketing.com
    7. 8. Minimize TOTAL time through the loop Eric Ries: StartupLessonsLearned.com Learn Faster Split Tests Customer Interviews Customer Development Five Whys Root Cause Analysis Customer Advisory Board Falsifiable Hypotheses Product Owner Accountability Customer Archetypes Cross-functional Teams Semi-autonomous Teams Smoke Tests Split Tests Clear Product Owner Continuous Deployment Usability Tests Real-time Monitoring Customer Liaison Build Faster Unit Tests Usability Tests Continuous Integration Incremental Deployment Free & Open-Source Components Cloud Computing Cluster Immune System Just-in-time Scalability Refactoring Developer Sandbox Minimum Viable Product Measure Faster Funnel Analysis Cohort Analysis Net Promoter Score Search Engine Marketing Real-Time Alerting Predictive Monitoring
    8. 10. Build Faster <ul><ul><ul><ul><li>Test Driven Development (TDD / Unit Tests) </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Continuous Deployment </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Continuous Integration </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Just-in-time Scalability (Amazon Web Services) </li></ul></ul></ul></ul>On average we deploy new code fifty times a day.” Timothy Fitz, IMVU “
    9. 11. <ul><li>Poorly designed features Inflexible, short-sighted code </li></ul><ul><li>Half-done features Known bugs </li></ul><ul><li>Crappy code with major performance issues </li></ul>We have purposefully deployed:
    10. 12. Measure Faster <ul><ul><ul><ul><li>Funnels & Cohort Analysis (KISSmetrics) </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Feedback (NPS, Surveys, KISSinsights) </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Usability Testing (UserTesting, Mockups, etc...) </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Split Tests (A/B Testing) (KISSmetrics + Internal) </li></ul></ul></ul></ul>It's about changing customer behavior -- for the better.” Eric Ries, The Lean Startup “
    11. 13. “ Measure the Macro” - Eric Ries
    12. 14. Learn Faster <ul><ul><ul><ul><li>Fake it till you make it (Smoke Tests) </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Five Whys Root Cause Analysis </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Falsifiable Hypotheses </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Customer Development (Customer Interviews) </li></ul></ul></ul></ul>Customer Development will help you – force you – to make better decisions based on tested hypotheses, rather than untested assumptions.” The Entrepreneur’s Guide to Customer Development, CustDev.com “
    13. 15. Our hypothesis is that product manager type people have a problem doing fast/effective/frequent customer research. ” “ Original Hypothesis for KISSinsights
    14. 16. Lean Startup Process
    15. 17. ? ☼ Problem Team Solution Team No Departments, Just Two Teams What are the most important problems to solve? Find the minimum solution for a given problem.
    16. 18. 15 - 45 minute team meetings (M,W,F)
    17. 19. “ Your Focus Needs More Focus”
    18. 20. Lean Startup Lessons Learned
    19. 21. Speeding can lead to crashes
    20. 22. that f*cking green light next to a task for 7 days is really depressing.” KISSmetrics Engineer “ The team becomes more accountable
    21. 23. The only path to perfection is iteration
    22. 24. Thank You! [email_address]