10 steps to product/market fit

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A systematic approach for going from idea to product/market fit.

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10 steps to product/market fit

  1. 1. Hashtag: #leanstartup ASH MAURYA @ashmaurya spark59.com PracticeTrumpsTheory.com 10 STEPS TO PRODUCT/MARKET FIT
  2. 2. 9/10startups fail products
  3. 3. 66%drastically change their original plans
  4. 4. Not a better Plan A but a path to a plan that works before running out of resources.
  5. 5. A plan that works = Product/Market Fit
  6. 6. What is Product/Market Fit?
  7. 7. “... customers are buying the product just as fast as you can make it - or usage is growing just as fast as you can add servers ...” -Marc Andreessen, The Pmarca Guide to startups
  8. 8. “If you have to ask whether you have Product/Market Fit, the answer is simple: you don’t.” -Eric Ries, The Lean Startup
  9. 9. Getting to Product/Market Fit can be done systematically.
  10. 10. 01 Problem/Solution Fit AGENDA 02 Early Traction 03 Product/Market Fit
  11. 11. 01 Problem/Solution Fit AGENDA 02 Early Traction 03 Product/Market Fit
  12. 12. 01 Problem/Solution Fit AGENDA 02 Early Traction 03 Product/Market Fit Do I have a problem worth solving?
  13. 13. 01 Document your Plan A.
  14. 14. Reasonably smart people can rationalize anything but entrepreneurs are especially gifted at this.
  15. 15. Business Model versus Business Plan
  16. 16. Business Model versus Business Plan A document investors make you write that they don’t read
  17. 17. Business Model versus Business Plan A single diagram of your business
  18. 18. Problem Top 3 problems Solution Top 3 features Unique Value Proposition Single, clear, compelling message that states why you are different and worth paying attention Unique Value Proposition Single, clear, compelling message that states why you are different and worth paying attention Unfair Advantage Can’t be easily copied or bought Customer Segments Target customers Problem Top 3 problems Key Metrics Key activities you measure Unique Value Proposition Single, clear, compelling message that states why you are different and worth paying attention Unique Value Proposition Single, clear, compelling message that states why you are different and worth paying attention Channels Path to customers Customer Segments Target customers Cost Structure Customer Acquisition Costs Distribution Costs Hosting People, etc. Cost Structure Customer Acquisition Costs Distribution Costs Hosting People, etc. Cost Structure Customer Acquisition Costs Distribution Costs Hosting People, etc. Revenue Streams Revenue Model Life Time Value Revenue Gross Margin Revenue Streams Revenue Model Life Time Value Revenue Gross Margin Revenue Streams Revenue Model Life Time Value Revenue Gross Margin Lean Canvas is adapted from The Business Model Canvas (http://www.businessmodelgeneration.com) and is licensed under the Creative Commons Attribution-Share Alike 3.0 Un-ported License. PRODUCT MARKET
  19. 19. Problem Solution Unfair Advantage Key Metrics http://runlean.ly/why-lean-canvas
  20. 20. 02 Formulate an implementation strategy.
  21. 21. Facebook won on strategy not vision.
  22. 22. 03 Hone in on early adopters first.
  23. 23. Problem Solution Unique Value Proposition Unique Value Proposition Unfair Advantage Customer Segments Problem Key Metrics Unique Value Proposition Unique Value Proposition Channels Customer Segments Cost StructureCost StructureCost Structure Revenue StreamsRevenue StreamsRevenue Streams Your early adopters define the business model
  24. 24. Build an MVP (Minimum Viable Product).
  25. 25. An MVP is the smallest solution that delivers customer value. (BONUS: And captures customer value.)
  26. 26. 01 Problem/Solution Fit AGENDA 02 Early Traction 03 Product/Market Fit
  27. 27. 01 Problem/Solution Fit AGENDA 02 Early Traction 03 Product/Market Fit Have I built something people want?
  28. 28. In God we trust, all others bring data. -W. Edwards Deming
  29. 29. Startups don’t starve, they drown. -Shawn Carolan, Menlo Ventures
  30. 30. What you wanted WTF The reality
  31. 31. 04 Establish a standard measure of progress.
  32. 32. Financial accounting Innovation Accounting
  33. 33. ACQUISITION ACTIVATION RETENTION REVENUE REFERRAL How do users find you? Do users have a great first experience? Do users come back? How do you make money? Do users tell others? Dave McClure’s Pirate Metrics
  34. 34. 05 Deliver value before growth.
  35. 35. ACQUISITION ACTIVATION RETENTION REVENUE REFERRAL How do users find you? Do users have a great first experience? Do users come back? How do you make money? Do users tell others? Value Metrics
  36. 36. 06 The terrain before Product/Market Fit is riddled with qualitative learning.
  37. 37. You don’t need lots of users to learn. Just a few good customers.
  38. 38. 01 Problem/Solution Fit AGENDA 02 Early Traction 03 Product/Market Fit
  39. 39. 01 Problem/Solution Fit AGENDA 02 Early Traction 03 Product/Market Fit How do I scale?
  40. 40. 07 Identify your engine of growth.
  41. 41. ACQUISITION ACTIVATION RETENTION REVENUE REFERRAL How do users find you? Do users have a great first experience? Do users come back? How do you make money? Do users tell others? PAID STICKY VIRAL Growth Metrics
  42. 42. A startup can focus on only one metric. So you have to decide what that is and ignore the rest. -Noah Kagan
  43. 43. What’s stopping your business from growing 10X? -David Skok
  44. 44. 08 Measure everything as a cohort.
  45. 45. You cannot step in the same river twice. -Heraclitus
  46. 46. Signups Activation Paid Conversion
  47. 47. Signups Activation Paid Conversion
  48. 48. 09 Build a continuous feedback loop with customers for rapid hypothesis generation.
  49. 49. 10 Breakthrough insights are usually hidden within failed experiments.
  50. 50. A pivot not grounded in learning is a disguised “see what sticks” strategy.
  51. 51. “There is no such thing as a failed experiment- only unexpected outcomes. ” - Buckminster Fuller
  52. 52. THANKS! Available now in bookstores Get more content like this: http://runlean.ly/InnovationAccounting Ash Maurya | Author, Running Lean | Founder, Spark59 | @ashmaurya Life is too short to build something nobody wants

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