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Lean startup marketing



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  • 1. Sean Ellis Lean Startup Circle March 24, 2010 Lean Startup Marketing Channeling Resources to Create a Fast Growing Startup
  • 2. Cross startup learning… for betterment of all startups Led by entrepreneurs - Steve Blank - Dave McClure - Eric Ries - Everyone here
  • 3. My Lean Experience • Collective experience outweighs mine • Steve Blank recommended “lean” preso • Then couple Eric Ries posts/presentations • Limited time to participate in lean revolution • But 15 years of “lean-ish” principles
  • 4. Objectives for Today’s Meeting 1. Share insights for growing a valuable startup 2. Fresh look at my approach growing startups using lean startup principles 3. Work together to evolve our understanding of startup growth
  • 5. What are the Lean Startup Principles? • Low burn by design (no scaling until revenue) • Learn fast (fail fast) • Rapid hypothesis testing about market, pricing, customers (customers & markets unknown) • Metrics, iteration… • Agile development • What else? 5
  • 6. “Lean-ish” Marketing = Back-to-Back IPOs First Startup (1996 launch) – Lead online game category – Get users at cost lower than user value (ARPU) – Minimize waste via sophisticated metrics Second Startup (2003 launch) – Added qualitative research and funnel optimization
  • 7. Goal: Build Sustainable Valuable Company 7
  • 8. Low value startups: Scaling or cost-effective marketing Valuable startups: Scaling cost-effective marketing
  • 9. Valuable Company Starts with Value • Product/market fit = product is “must have” (value) • Become a “must have” with customer development – Validate “value” assumptions early (who needs/why?) – Get users on first release ASAP – Find “must have” users/use cases (facts outside building) – Pivot if necessary to create value 9
  • 10. Getting to Scalable Cost-Effective Marketing Scale Get Efficient Conversion Product/Market Fit (Value) 10
  • 11. Pyramid through Lean Startup Lens • Waste – Eliminate wasted time, money, effort… • Focus – Channel resources to create value • Speed - Get to next level as quickly as possible • Learn – Hypothesize, test, refine 11
  • 12. Survey User Perceived Value • Free template at 12
  • 13. Key “Value” Question “Very Disappointed” My Recommendation 0% – 25% Keep burn low, engage, iterate 26% – 39% Try repositioning, retargeting 40% – 100% Proceed up pyramid “How would you feel if you could no longer use Product?” 13
  • 14. Start Transition to Growth Scale Get Efficient Conversion Product/Market Fit 14
  • 15. 15 Better conversion efficiency Improves range & scalability of viable channels
  • 16. Race to Scale – Key Projects 1. Positioning - based on perceived value 2. Right metrics - to channel resources 3. Optimize conversions - LP & funnel 4. Viable economics – monetize user value 5. Scalable growth strategy - who/intent? 6. What else? 16
  • 17. Optimize Landing Pages & Full Funnel Signup Home Page Path 1 200,000 100,000 100000 50000 X000 Paid X00 Paid X00 Free X000 X00025000 50% 12.5& 12.5% X% X% X% X% Path 1 (step 2) Path 2 25000 X000 X% X00 Free 17
  • 18. Scalable Growth Now Possible Scale Get Efficient Conversion Product/Market Fit (Value) 18
  • 19. Test from Free to Paid Channels Channel Cost/user Scalability Viral/referral Free High Email (internal) Free Organic Blog Free Organic SEO Free or Paid Organic Widget Free or Paid Organic Biz Dev/Partners Free or Paid High Domains Paid (low) Low PR Paid (low) High Email (external) Paid (TBD) High SEM Paid (TBD) Can be High Contest Paid (TBD) Organic Affiliate/lead gen Paid (TBD) High Radio Paid (TBD) High TV Paid (TBD) High 19
  • 20. Driving/Managing Growth Monitor Conversions • Anything broken? • AARRR Manage Campaigns •Optimize and scale campaigns on ROI Develop New Campaigns • Test new sources 20 Budget to maximize positive ROI spend
  • 21. Valuable Company • Some loss of control is good • Understand via triangulation – Origin tracking – Trend correlation – Surveys • Feed the beast 21
  • 22. Channel Your Resources to Climb the Pyramid Twitter: @seanellis Blog: Scale Optimize Economics Positioning Product/Market Fit (Value)