©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-software
©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwareToddWyder, CEO of Pathfinder So...
©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwareYou have found a really painful...
©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwareYou discovered a target market ...
©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwareYou have created a solution tha...
©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwareSo, you build your MVP and invi...
©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwareThen what happens?
©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwareNothing
©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwareSo, you buy some Adwords and ge...
©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-software02468101214161 2 3 4 5 6 7Produ...
©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwareWhy?
©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwareYour product sucks & youdon’t k...
©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwareTheTrough of Sorrow
©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwareMost startup foundersfocus heav...
©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwareMarketingCustomerDevelopmentDat...
©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwareAcquisitionBring prospective cu...
©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwareActivationSign up
©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwareRetentionEngage users
©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwareReferral
©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwareSeven Steps to become aGrowth H...
©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-software1. No Beta!!!
©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-software2. Install Analytics
©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwareGoogle Analytics isWorth WhatYo...
©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwareDon’t Focus on AcquisitionWhenA...
©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-software3. Create a Dashboard
©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-software4. Perform A/B testingLinkBaitP...
©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwareWhat to/Not toTestLinkBaitProGe...
©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwareClassic A/BTestingI’m on Twitte...
©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-software
©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwareUser States1. Login2. Upload Ph...
©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-software5. Create InterventionsSigned U...
©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-software
©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-software
©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-software
©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwareBugsnag captures errors from yo...
©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwareBadWeve missed you on CouchSurf...
©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwareThe Last EmailYouWill Ever Send...
©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwareIn App Intervention
©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-software
©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-software
©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-software6. Preform Cohort Analysis
©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwareTrack UserStatesAcrossCohorts
©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwareOnboarding
©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-software7. Determine the OMTMAt least 7...
©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwarePost Launch Stages1. Stickiness...
©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwarePost Launch Stages1. Stickiness...
©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwarePost Launch Stages1. Stickiness...
©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwarePost Launch Stages1. Stickiness...
©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-software• Measure engagement• DAU/WAU –...
©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwareTalk to the Customers
©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwareViral CoefficentNumber of Activ...
©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwareVirality InherentCollaborationC...
©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwareUse Platforms
©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-software
©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwareSegmentation
©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwareVideo
©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwareUnit Economics
©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwareBasicsCAC – Customer Acquisitio...
©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwareRules ofThumbLTV > 3 * CACCAC n...
©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-software
©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwareHow Churn affects LTVLifetime V...
©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwareImpact of Lowering Churn$(400,0...
©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwareAWell Balanced Business ModelMo...
©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwareThe Balancing ActMonetization(L...
©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwareThe Balancing ActMonetization(L...
©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwareQuestions
©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwareGet Hacking!
©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwareNeed help with the design, deve...
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Growth Hacking for Lean Startups: How to Get, Keep and Grow Customers

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  • Nobody releases the right product the first time out of the gate
  • Releases of improvement is adding more features, which compounds the problem because you don’t know what is wrong
  • But what do most people do? They add more features. Which just compounds the problem
  • Not a programmer
  • Mad libs 40% increase
  • Flickr started out as MMO softwareReleased Glitch and it failed
  • A growth hackers job is to move folks from one user state to the next one
  • 3 hours later
  • 2 minutes after someone signs up, they get a one-line email directly from James, the CEO of Bugsnag, asking if they need any help:People reply to this email a whopping 22% of the time. First, the email sets up a direct channel for support questions. The fact that you care about this customer is what gives the email it's mojo.Second, by delaying the email 30 minutes, people who got distracted come back and finish setting up even if they never reply. The result is happier customers and better conversion.
  • Expensify and traveling sales repBalsamiq and UI designerColor scaled without stickiness (41MM and 1 year to get 30K users)Flickr –upload 1st, then
  • Ask them what they need to be engaged – call your first 100 customersEztexting did a A/B test and found 31% increase in signups (without chatting)\\Ecommerce 48% increase amount spent with olark
  • Inherent – user gets no value unless others use Collaboration – individual does benefit, but gets more from using with another Signature – has hosted by at bottom Social – Zynga posting game stuff on FB Mailchimp –quirkiness track each separatelly
  • Paypal & ebayYoutubemyspacephotobucketmyspacebit.lyTweetDeckZynga Facebook
  • 2nd largest search engine
  • Transcript of "Growth Hacking for Lean Startups: How to Get, Keep and Grow Customers"

    1. 1. ©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-software
    2. 2. ©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwareToddWyder, CEO of Pathfinder Software, is obsessedwith creating great software that users love, and he isalso very passionate about building the Chicago-techcommunity, currently serving as organizer for boththeChicago Product ManagementAssociation andtheChicago Lean StartupCircle.Over a decade of delivering successful softwareapplications, providing clients with the technology toenable business breakthroughs and competitiveadvantage.Companies hire Pathfinder todesign, develop and deliver Healthcare softwareproducts faster and better than they can dothemselves.
    3. 3. ©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwareYou have found a really painful problem
    4. 4. ©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwareYou discovered a target market who hasthat problem
    5. 5. ©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwareYou have created a solution that customerstell you really solves the problem
    6. 6. ©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwareSo, you build your MVP and invite your firstcustomers to use it
    7. 7. ©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwareThen what happens?
    8. 8. ©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwareNothing
    9. 9. ©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwareSo, you buy some Adwords and get moresign ups. Then, what happens?
    10. 10. ©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-software02468101214161 2 3 4 5 6 7Product Usage
    11. 11. ©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwareWhy?
    12. 12. ©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwareYour product sucks & youdon’t know why
    13. 13. ©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwareTheTrough of Sorrow
    14. 14. ©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwareMost startup foundersfocus heavily on product butmost of a startups risk liesin distributionDave McClure
    15. 15. ©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwareMarketingCustomerDevelopmentDataGrowthHacker
    16. 16. ©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwareAcquisitionBring prospective customers to your site
    17. 17. ©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwareActivationSign up
    18. 18. ©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwareRetentionEngage users
    19. 19. ©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwareReferral
    20. 20. ©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwareSeven Steps to become aGrowth Hacker
    21. 21. ©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-software1. No Beta!!!
    22. 22. ©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-software2. Install Analytics
    23. 23. ©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwareGoogle Analytics isWorth WhatYou Pay For ItPeople, not page views, buy software
    24. 24. ©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwareDon’t Focus on AcquisitionWhenActivation and Retention are LowVisited Site Signed Up Activation Billed2,17714 3 10.6% 21.4% 33.3%0.0%
    25. 25. ©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-software3. Create a Dashboard
    26. 26. ©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-software4. Perform A/B testingLinkBaitProGet StartedLinkBaitProGet StartedA B
    27. 27. ©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwareWhat to/Not toTestLinkBaitProGet StartedFor recreational use only. Do not staple or paper clip. All models over18 years of age. Prize not redeemable for cash value. If conditionpersists, consult your physician. No user-serviceable parts inside.Test theHeadlineImage vs.VideoCall to actiontext and colorDon’tspend alot of timetestingthe copy
    28. 28. ©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwareClassic A/BTestingI’m on Twitter Follow me on TwitterFollow me on TwitterYou should follow meOn twitterYou should follow meOn twitterYou should follow meOn twitter hereYou should follow meOn twitter here56%38%27%115%173%
    29. 29. ©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-software
    30. 30. ©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwareUser States1. Login2. Upload Photos3. Tag Photos4. Share Photos5. Comment on Others photos
    31. 31. ©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-software5. Create InterventionsSigned Up Login UploadedPhotosTagPhotos2,17736641316.8% 11.2% 7.3%0.0%• Email• In App
    32. 32. ©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-software
    33. 33. ©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-software
    34. 34. ©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-software
    35. 35. ©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwareBugsnag captures errors from your web andmobile applications. The first email they sendto new signups is very simple, but has beenyielding great results.Hey {{ first_name }},Im James, CEO of Bugsnag. I wanted to reachout to see if you need any help getting started.Cheers,JamesSurprise Personal Email
    36. 36. ©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwareBadWeve missed you on CouchSurfing! Its beena long time since weve seen you around!The last time you logged into CouchSurfingwas four months ago.Props to Segment.io
    37. 37. ©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwareThe Last EmailYouWill Ever SendA lot has changed since you left – so wed like to offeryou another FREE trial!Come back to Netflix and enjoy newly addedTV shows& movies – for free. Now includingWii, PS3, Xbox360, iPhone, iPad, Android and more.Questions? 1-888-357-1516 / 24 hours a day
    38. 38. ©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwareIn App Intervention
    39. 39. ©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-software
    40. 40. ©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-software
    41. 41. ©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-software6. Preform Cohort Analysis
    42. 42. ©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwareTrack UserStatesAcrossCohorts
    43. 43. ©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwareOnboarding
    44. 44. ©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-software7. Determine the OMTMAt least 7 friends within 10 days of signing upGetting a new user to link a device and add a fileOnce a user follows 30 people, they’re more or less active foreverIf someone comes back a day after signing up for a game, that is aleading indicator of them becoming an engaged and paying user.
    45. 45. ©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwarePost Launch Stages1. StickinessUSERDISENGAGED USERENGAGEDUSERREACTIVATETRIAL OVERPAYINGCUSTOMERDISSATISFIEDRESOLUTIONDISENGAGEDREACTIVATECANCEL CANCELACCOUNT CANCELLED ORBILLING INFO EXPIRESFree userdisengagementPaidConversionSupportDataReactivatonRateFreemiumChurnTrialAbandonmentRateDisengagement
    46. 46. ©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwarePost Launch Stages1. Stickiness2. TrafficUSERDISENGAGED USERENGAGEDUSERREACTIVATETRIAL OVERPAYINGCUSTOMERDISSATISFIEDRESOLUTIONDISENGAGEDREACTIVATECANCEL CANCELACCOUNT CANCELLED ORBILLING INFO EXPIRESFree userdisengagementPaidConversionSupportDataReactivatonRateFreemiumChurnTrialAbandonmentRateDisengagementPAID DIRECT SEARCH WOMCustomer Acquisition CostVISITORFREEMIUM/TRIALOFFERENROLLMENTLong funnelhealthINHERENTVITALITYINVITEOTHERSViral coefficientViral rate
    47. 47. ©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwarePost Launch Stages1. Stickiness2. Traffic3. RevenueUSERDISENGAGED USERENGAGEDUSERREACTIVATETRIAL OVERPAYINGCUSTOMERDISSATISFIEDRESOLUTIONDISENGAGEDREACTIVATECANCEL CANCELACCOUNT CANCELLED ORBILLING INFO EXPIRESFree userdisengagementPaidConversionSupportDataReactivatonRateFreemiumChurnTrialAbandonmentRateDisengagementPAID DIRECT SEARCH WOMCustomer Acquisition CostVISITORFREEMIUM/TRIALOFFERENROLLMENTLong funnelhealthINHERENTVITALITYINVITEOTHERSViral coefficientViral rateUPSELLINGCAPACITYLIMITFORMER USERS FORMER CUSTOMERSTieringUpsellingRateUnpaid Churn Rate Paid Churn RateUser Lifetime Value Customer Lifetime Value
    48. 48. ©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwarePost Launch Stages1. Stickiness2. Traffic3. RevenuePAID DIRECT SEARCH WOM INHERENTVITALITYCustomer Acquisition CostVISITORFREEMIUM/TRIALOFFERENROLLMENTUSERINVITEOTHERSDISENGAGED USERENGAGEDUSERREACTIVATETRIAL OVERPAYINGCUSTOMERUPSELLINGCAPACITYLIMITDISSATISFIEDRESOLUTIONDISENGAGEDREACTIVATECANCEL CANCELACCOUNT CANCELLED ORBILLING INFO EXPIRESFORMER USERS FORMER CUSTOMERSLong funnelhealthFree userdisengagementPaidConversion TieringUpsellingRateSupportDataReactivatonRateFreemiumChurnTrialAbandonmentRateDisengagementUnpaid Churn Rate Paid Churn RateUser Lifetime Value Customer Lifetime ValueViral coefficientViral rate
    49. 49. ©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-software• Measure engagement• DAU/WAU – What does active mean?• Segment• New Functionality• Does it improve stickiness?• How do we measure that?• Lazy registrationStickiness
    50. 50. ©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwareTalk to the Customers
    51. 51. ©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwareViral CoefficentNumber of Active Users: 1,000Number of Invites Sent: 100Invitation Rate (Invites Sent/Active Users) 10%Acceptance rate (Invites accepted/Invites Sent) If 3invitees sign up,30%Viral Coefficient = Multiply Invitation Rate X AcceptanceRate (.1 X .3 = o.o3)IdeallyViral Coefficient > 1Necessary for B2C, likely not a good metric for B2B
    52. 52. ©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwareVirality InherentCollaborationCommunicationPS: I love you,get your free emailfrom http://hotmail.comIncentivizedEmbeddableSignatureWord of MouthSocial
    53. 53. ©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwareUse Platforms
    54. 54. ©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-software
    55. 55. ©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwareSegmentation
    56. 56. ©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwareVideo
    57. 57. ©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwareUnit Economics
    58. 58. ©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwareBasicsCAC – Customer Acquisition Cost• Marketing cost/# paying customers• Costs you spend on marketing• Include laborLTV – LifeTimeValue• Amount of money you receive while the customer is paying you• LTV = ARPU * (1/Churn Rate)• 1,000 Customers (not free trial users)• $25,000 Revenue• ARPU is $25• 20% Churn Rate (average length of relationship is 5 months)• LTV = $25 * (1 – 0.02) = $125
    59. 59. ©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwareRules ofThumbLTV > 3 * CACCAC needs to be recovered in less than ayear (ideally 3 months)Churn should be 5-7% annually- 0.42-0.58 monthly
    60. 60. ©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-software
    61. 61. ©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwareHow Churn affects LTVLifetime ValueMonthlyChurnSource: David Skok Matrix Partners
    62. 62. ©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwareImpact of Lowering Churn$(400,000)$(200,000)$-$200,000$400,000$600,000$800,000$1,000,000$1,200,000Net ProfitChurn 1.25% Churn 2.5%$(4,000,000)$(3,000,000)$(2,000,000)$(1,000,000)$-$1,000,000$2,000,000$3,000,000$4,000,000$5,000,000$6,000,000$7,000,000Month1Month3Month5Month7Month9Month11Month13Month15Month17Month19Month21Month23Month25Month27Month29Month31Month33Month35Cumulative Net ProfitChurn 1.25% Churn 2.5%• Impact of lowering the churn rate is felt more heavily in the later years, as expected• It has a significant impact on the long term profitability of the businessSource: David Skok Matrix Partners
    63. 63. ©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwareAWell Balanced Business ModelMonetization(LTV)Cost toAcquire aCustomer(CAC)Source: David Skok Matrix Partners
    64. 64. ©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwareThe Balancing ActMonetization(LifeTime Value LTV)Cost to Acquire a Customer(CAC)• Viral effects• Inbound Marketing• Free or Freemium• Open Source• Free Trials• Touchless conversion• Inside Sales• Channels• Strategic partnerships• Scalable Pricing• Cross Sell/Upsell• Product line expansion• Lead Gen for 3rd partiesSource: David Skok Matrix Partners
    65. 65. ©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwareThe Balancing ActMonetization(LifeTime Value LTV)Cost to Acquire a Customer(CAC)• Viral effects• Inbound Marketing• Free or Freemium• Open Source• Free Trials• Touchless conversion• Inside Sales• Channels• Strategic partnerships• Field Sales• OutboundMarketing• Scalable Pricing• Cross Sell/Upsell• Product line expansion• Lead Gen for 3rd parties• High Churn Rates• Low customersatisfactionSource: David Skok Matrix Partners
    66. 66. ©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwareQuestions
    67. 67. ©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwareGet Hacking!
    68. 68. ©2013 Pathfinder Softwarewww.PathfinderSoftware.com888-986-2914@PathSoftpathfinder-softwareNeed help with the design, development, and launch of your Healthcareor Medical software application? We leverage our experience with FDAand HIPAA compliance to rapidly align your product with governmentregulations. We increase the rate of success of our clients’ productsleveraging Lean Startup + UX + Agile. Call Us Today - 888-986-2914
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