7 Myths of Lean and How Analytics Can Help

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A recent presentation Ben did about the myths of Lean Startup and how analytics can help create a common language between investors and entrepreneurs.

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7 Myths of Lean and How Analytics Can Help

  1. 1. 7 MYTHS OF LEAN AND HOW ANALYTICS CAN HELP Ben Yoskovitzhttp://www.flickr.com/photos/kxlly/349894433/ @byosko
  2. 2. HOW DO WE BRING INVESTORS AND ENTREPRENEURS TOGETHER? http://farm4.staticflickr.com/3489/3922495716_bea9de1bed_z.jpg?zz=1
  3. 3. More wins than losses GoInstant 1st startup Year One Labs Started blogging Standout Jobs Big pivot 1996 1998 2001 2006 2007 2010 2011 The “I got too comfy” years Failed $0http://www.flickr.com/photos/atbaker/3745556550/
  4. 4. Pre-order today! (please) http://leananalyticsbook.com
  5. 5. Basics of Lean Startup Eric Ries http://theleanstartup.com
  6. 6. MYTH #1: LEAN = CHEAP
  7. 7. KNOW WHEN TO HACKAND WHEN TO SCALE
  8. 8. MYTH #2: LEAN = SMALL http://www.flickr.com/photos/cobalt/7824157082/sizes/c/in/photostream/
  9. 9. HAVE YOU EVER HAD AHARD TIME HIRING TOP TALENT?
  10. 10. ALL THE HARD WORK IS IN THE ...http://www.flickr.com/photos/kiki/36895053/
  11. 11. WHAT ARE THE RISKS WITHACCELERATORS?
  12. 12. MYTH #3: LEAN = CRAPPY http://www.flickr.com/photos/privatenobby/79831409/sizes/l/in/photostream/
  13. 13. AN MVP IS FOR LEARNING AND MUST PROVIDETHE CORE VALUE YOU PROMISED
  14. 14. MYTH #4: PIVOT IS BAD WORD http://www.flickr.com/photos/kaitlinmarie/6006759537/sizes/l/in/photostream/
  15. 15. A SHIFT IN ONE ASPECT OF YOUR STARTUP’S FOCUS BASED ONVALIDATED LEARNING
  16. 16. BEWARE THELAZY PIVOT
  17. 17. SOME PIVOTS WORK (BIG TIME!) from b2c to b2b. from friends to moms.
  18. 18. IF THEFUNDAMENTALS AREN’T THERE YOU CAN’T SCALE
  19. 19. MYTH #5: LEAN = CONSUMER STARTUPShttp://www.flickr.com/photos/travlr/with/3005170442/
  20. 20. If you want to:• Compete• Reduce waste• Innovate• Succeed
  21. 21. MYTH #6: LEAN = EASY http://www.flickr.com/photos/jeffk/59597637/
  22. 22. MYTH #7: LEAN = AUTO WIN http://www.flickr.com/photos/8136496@N05/2327243497/sizes/l/in/photostream/
  23. 23. THINGS TAKE TIME EVEN IF STARTUPSSHOULD BE GOING FASTER
  24. 24. EXTERNALPRESSURE IS ADANGEROUS THING
  25. 25. SO HOW CAN LEAN ANALYTICS HELP?http://www.flickr.com/photos/skidder/37675092/sizes/l/in/photostream/
  26. 26. Analytics is the measurement ofmovement towards yourbusiness goals.
  27. 27. In a startup, the purpose ofanalytics is to iterate toproduct/market fit before themoney runs out.
  28. 28. VANITY METRICS ARE BAD A metric from the early, foolish days of the Web. Hits Count people instead. Marginally better than hits. Unless you’re displaying Page views ad inventory, count people. Is this one person visiting a hundred times, or are a Visits hundred people visiting once? Fail. This tells you nothing about what they did, why they Unique visitors stuck around, or if they left.Followers/friends Count actions instead. Find out how many followers /likes will do your bidding.
  29. 29. http://www.flickr.com/photos/circasassy/78581 55676/ it’s abad If it won’t change how you behave,metric.
  30. 30. LEADING LAGGINGNumber today that Historical metric shows metric that shows howtomorrow-makes you’re doing- the news reports the news http://www.flickr.com/photos/vegaseddie/3310041214/sizes/l/in/photostream/
  31. 31. What mode of e-commerce are you?How many of your customers buy a Then you are in this Your customers will You are just Focus onsecond time in 90 mode buy from you like days? Low CAC, 1-15% Acquisition Once 70% high of retailers checkout 15-30% Hybrid 2-2.5 20% Increasing per year of retailers returns Loyalty, >30% Loyalty >2.5 10% inventory per year of retailers expansion (Thanks to Kevin Hilstrom for this.)
  32. 32. SO WHAT METRICSSHOULD YOU TRACK?
  33. 33. YOUR BASIC THE STAGE OF BUSINESS YOUR MODEL STARTUP How you make $$ Lifecycle• E-commerce • Empathy• SaaS • Stickiness• Free mobile app • Virality• Media site • Revenue• Collaborative content site • Scale• Two-sided marketplace
  34. 34. CORRESPONDING FUNDING Accelerator ($25-$50k) Seed ($500k) Series A ($1-3M) Series B+ ($5-10M)
  35. 35. Case study: Buffer goes fromStickiness to Scale (through Revenue) • Stage: Scale • Model: SaaS (consumer) • Popular social sharing application. • Focused primarily on customer acquisition • Charged from day one
  36. 36. Buffer charges early to prove peoplewant the problem solved of visitors create an account 20% (acquisition / Empathy) of sign-ups become active 64% (start of Stickiness) of sign-ups return in the 1st month 60% (engagement / Stickiness) of sign-ups are active after 6 months 20% (engagement / Stickiness) convert from free to paid 2% (Revenue)
  37. 37. SKIP STEPSAT YOUROWN RISK
  38. 38. Case study: ClearFit • Stage: Scale • Model: SaaS • Recruitment marketing and assessment software • Switched business models from monthly subscription to pay per job posting
  39. 39. ClearFit: Lots of money!10x revenue increase off of 3x in sales volume “People don’t do subscriptions for haircuts, hamburgers, and hiring. You have to understand your customer, who they are, how and why they buy, and how they value your product or service.” - Ben Baldwin, co-founder
  40. 40. DON’T JUSTFOLLOW THE LEADER http://www.flickr.com/photos/86791111@N00/3126955746/
  41. 41. How it all comes together The business you’re in E- 2-sided Mobile User-gen SaaS Media commerce market app content EmpathyThe stage you’re One Metric Stickiness at Virality Revenue That Matters. Scale
  42. 42. CHOOSE ONLY ONE METRIC ANDDRAW A LINEIN THE SAND
  43. 43. Case study: Timehop aims forvirality through content sharing • Stage: Virality • Model: Mobile app • Social network around the past • Focused on virality (but not the viral coefficient)
  44. 44. The One Metric That Matters:Content sharing • Focused on % of daily active users that share content • Aiming for 20-30% of daily active users to share content “All that matters now is virality. Everything else—be it press, publicity stunts or something else—is like pushing a rock up a mountain: it will never scale. But being viral will.” - Jonathan Wegener, co-founder
  45. 45. METRICS ARELIKE SQUEEZE TOYS
  46. 46. Once, a leader convinced othersin the absence of data.
  47. 47. Now, a leader knows whatquestions to ask.
  48. 48. Thank you. follow me. email me. @byosko byosko@gmail.cominstigatorblog.com subscribe. pre-order! leananalyticsbook.com

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