Lean Startup

is awesome
Who Am I
Joshua Cyr
Developer and Startup Enthusiast
Owner Alpha Loft - Coworking in Portsmouth
focused on tech/creative/s...
What is Lean Startup
Lean Startup is a rigorous process for iterating
from Plan A to a plan that works.
Leap of Faith Hypothesis
Your business model is actually a leap of faith.
Find a way to test your hypothesis as quickly as...
Examples
Will people listen to music privately in public
setting?
Will people pay for music online?
Will people share thei...
Feedback Loop
My MVP
The term ‘Minimum Viable Product’ is best
thought of as “the smallest iteration of work
you can do to validate your...
Minimum Viable Product
How we test our Leap of Faith.
How we know what is working and not.
How we do it quickly.
Minimum Viable Product
Iterate often.
Measure EVERYTHING
Fail quickly and learn from it to improve.
Minimum Viable Product
Short Cycles
Stuffing Envelopes - Efficiency vs Reality
What if something is wrong?
We can perfectly execute what ends up ...
Customer Interviews
The average person isn’t usually very good at
giving feedback on something that doesn’t exist.
That’s ...
Measuring
Innovation Accounting and Measurement
Build into our product and process
such as Split Tests.
Learn from mistake...
Cohort Analysis
Full Month
Sign Up
9700 (100%)
Download
5804 (59%)

Activate/Install
3186 (32%)
Purchase
1147 (12%)
Cohort Analysis
Full Month

Week 1

Week 2

Week 3

Week 4

Sign Up
9700 (100%)

Sign Up
2100 (100%)

Sign Up
2450 (100%)
...
Split Test
Control

Layout A

Layout B

Sign Up
2000 (100%)

Sign Up
2100 (100%)

Sign Up
2450 (100%)

Download
1100 (55%)...
Build Into Your MVP
To properly measure we need it built INTO our
Minimum Viable Product.
Which means it must be part of y...
Vanity Metrics
Millions of downloads vs no activations.
Incredible website growth vs no paying
customers.
20% month over m...
Useful Metrics
Actionable:
Is there a clear cause and effect?
Accessible:
Is the measurement simple to understand and
avai...
Growth Engines
How can we understand our likely growth
engine so that we may know how to measure
and thus improve?
Sticky Engine
Example: Games, Auction Sites
Measuring new customers not enough
information.
Customer retention and Churn r...
Viral Engine
Social Networks, Tupperware
Viral Coefficient is key measurement
1 person in 10 recommends product = 0.1
Not ...
Viral Engine Visual
Viral Engine Example
Hotmail
Sluggish growth at first.
Added "P.S. Get your free email on Hotmail" to
bottom of every emai...
Paid Engine
Measure Lifetime Value of Customer
Must be greater than Customer Acquisition
Cost.
Customer Acquisition includ...
Tuning Feedback Loop Key

8% vs 10%
Tuning Feedback Loop Key
8% vs 10%
Compounding Growth Rate As Of

Company A

Company B

Six Months Ago

0.5%

9.8%

Five M...
Burn Rate
runway = cash on hand / burn rate
# iterations = runway / speed of each iteration
How many iterations do you hav...
Time to Pivot
Is it time to change direction?
Options:
● Zoom In: Focus on one Feature
● Change Vertical Markets
● Focus o...
Pivot Examples
Groupon
Twitter
Draw Something
Instagram
How To Contact
AlphaLoft.com
Seacoast.io
@jcyr
@alpha_loft
jcyr@joshuacyr.com
Lean Startup Business Tactics - Identifying Your Minimal Viable Product
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Lean Startup Business Tactics - Identifying Your Minimal Viable Product

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The minimum viable product (MVP) is that version of a product which allows a team to collect the maximum amount of validating insight about customers' needs with the least amount of product building. It's one of the most important principles of a lean startup.

This deck provides you with insight into the value behind building an MVP, the overall process of achieving the maximum amount of validating learning, why in-depth customer interviews (and not just user testing) are crucial to testing your initial hypotheses about your business or product, and how you might collect or analyze qualitative and quantitative metrics to iterate your MVP.

Josh Cyr, founder of Alpha Loft and web app developer, also shared real lessons learned from one startup while building their MVP.

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Lean Startup Business Tactics - Identifying Your Minimal Viable Product

  1. 1. Lean Startup is awesome
  2. 2. Who Am I Joshua Cyr Developer and Startup Enthusiast Owner Alpha Loft - Coworking in Portsmouth focused on tech/creative/startup Run the Startup Meetup / Web Dev Meetup
  3. 3. What is Lean Startup Lean Startup is a rigorous process for iterating from Plan A to a plan that works.
  4. 4. Leap of Faith Hypothesis Your business model is actually a leap of faith. Find a way to test your hypothesis as quickly as possible.
  5. 5. Examples Will people listen to music privately in public setting? Will people pay for music online? Will people share their personal moments on video in a public portal? Will people share their dating interests publicly?
  6. 6. Feedback Loop
  7. 7. My MVP The term ‘Minimum Viable Product’ is best thought of as “the smallest iteration of work you can do to validate your assumptions”. The product in MVP can be a misnomer as it’s not always a tactile object.
  8. 8. Minimum Viable Product How we test our Leap of Faith. How we know what is working and not. How we do it quickly.
  9. 9. Minimum Viable Product Iterate often. Measure EVERYTHING Fail quickly and learn from it to improve.
  10. 10. Minimum Viable Product
  11. 11. Short Cycles Stuffing Envelopes - Efficiency vs Reality What if something is wrong? We can perfectly execute what ends up being a failed hypothesis.
  12. 12. Customer Interviews The average person isn’t usually very good at giving feedback on something that doesn’t exist. That’s why we create a small product for our customer to play with.
  13. 13. Measuring Innovation Accounting and Measurement Build into our product and process such as Split Tests. Learn from mistakes.
  14. 14. Cohort Analysis Full Month Sign Up 9700 (100%) Download 5804 (59%) Activate/Install 3186 (32%) Purchase 1147 (12%)
  15. 15. Cohort Analysis Full Month Week 1 Week 2 Week 3 Week 4 Sign Up 9700 (100%) Sign Up 2100 (100%) Sign Up 2450 (100%) Sign Up 2550 (100%) Sign Up 2600 (100%) Download 5804 (59%) Download 1218 (58%) Download 1470 (60%) Download 1530 (60%) Download 1586 (61%) Activate/Install 3186 (32%) Activate/Install 630 (30%) Activate/Install 808 (33%) Activate/Install 1020 (40%) Activate/Install 728 (28%) Purchase 1147 (12%) Purchase 210 (11%) Purchase 269 (11%) Purchase 408 (16%) Purchase 260 (10%)
  16. 16. Split Test Control Layout A Layout B Sign Up 2000 (100%) Sign Up 2100 (100%) Sign Up 2450 (100%) Download 1100 (55%) Download 1449 (69%) Download 1470 (60%) Activate/Install 600 (30%) Activate/Install 945 (45%) Activate/Install 808 (33%) Purchase 200 (10%) Purchase 630 (30%) Purchase 269 (11%)
  17. 17. Build Into Your MVP To properly measure we need it built INTO our Minimum Viable Product. Which means it must be part of your MVP, not tacked on after.
  18. 18. Vanity Metrics Millions of downloads vs no activations. Incredible website growth vs no paying customers. 20% month over month customer registrations vs flatline customer return rate.
  19. 19. Useful Metrics Actionable: Is there a clear cause and effect? Accessible: Is the measurement simple to understand and available to all? Internal finger pointing? Auditable: Is the measurement credible to all employees?
  20. 20. Growth Engines How can we understand our likely growth engine so that we may know how to measure and thus improve?
  21. 21. Sticky Engine Example: Games, Auction Sites Measuring new customers not enough information. Customer retention and Churn rate of existing customers key. Customer Acquisition must be > Attrition Reducing Churn is key aim.
  22. 22. Viral Engine Social Networks, Tupperware Viral Coefficient is key measurement 1 person in 10 recommends product = 0.1 Not a sustainable loop. 1.0+ Coefficient = 1 person brings > 1 new person in.
  23. 23. Viral Engine Visual
  24. 24. Viral Engine Example Hotmail Sluggish growth at first. Added "P.S. Get your free email on Hotmail" to bottom of every email. 1 Million in 6 Months 5 Weeks later 2 Million. 18 Months later 12 Million / $400 Million Sale.
  25. 25. Paid Engine Measure Lifetime Value of Customer Must be greater than Customer Acquisition Cost. Customer Acquisition includes Advertising, Outbound Sales, Retail Location, etc.
  26. 26. Tuning Feedback Loop Key 8% vs 10%
  27. 27. Tuning Feedback Loop Key 8% vs 10% Compounding Growth Rate As Of Company A Company B Six Months Ago 0.5% 9.8% Five Months Ago 2.0% 9.6% Four Months Ago 3.2% 9.9% Three Months Ago 4.9% 9.8% Two Months Ago 6.1% 9.7% One Month Ago 8.0% 10.0%
  28. 28. Burn Rate runway = cash on hand / burn rate # iterations = runway / speed of each iteration How many iterations do you have left? How many businesses are exactly the same as when they started off?
  29. 29. Time to Pivot Is it time to change direction? Options: ● Zoom In: Focus on one Feature ● Change Vertical Markets ● Focus on new Customer Segment ● New Product Idea Entirely Goal is to do this before you run out of funds.
  30. 30. Pivot Examples Groupon Twitter Draw Something Instagram
  31. 31. How To Contact AlphaLoft.com Seacoast.io @jcyr @alpha_loft jcyr@joshuacyr.com
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