BUILT TO LEARN This is the core feedback loop that powers startups. Their goal is not to optimize the time it takes to do any one of these steps. There are many specific practices that can power lean startups, and we’ll cover a few in this presentation. But more important than any specific practice is this core idea: startups should be built to learn.
Silicon Valley 2.0: The Lean VCPresentation Transcript
Silicon Valley 2.0 The Lean VC Dave McClure http://500startups.com ( @DaveMcClure ) Chicago – July 2011 http://slideshare.net/dmc500hats Re-Inventing Venture Capital through Innovation, Incubation, & Iteration
Changes in Tech & VC
Platforms = Distribution + Monetization ( not Technology)
Search (Google)
Social (Facebook, Twitter, LinkedIn, YouTube)
Mobile (Apple, Android)
Venture Capital = Fewer, Smaller Funds (<$100M)
Decline of Large Funds (> $250m), except for HUGE ONES (>$1B).
Birth of “Super Angel” / “Micro-VC” seed funds (<$100M)
Market Changes: a Few Big IPOs (>$1B), Lots of Small Acquisitions (<$250M)
Incubators, Metrics = Many Small Experiments (most FAIL )
Y-Combinator, TechStars, 500 Startups
The “Lean Startup”, Design/UX, Distribution
Lots of Little Bets; Incremental Investment
Read Geoffrey Miller Sex + Evolution + Consumer Mktg = Awesome
A cquisition: users come to site from various channels
A ctivation: users enjoy 1 st visit: " happy ” experience
R etention: users come back , visit site multiple times
R eferral: users like product enough to refer others
R evenue: users conduct some monetization behavior
(note: If you’re in a hurry, Google “Startup Metrics” & watch 5m video) AARRR !
AARRR! : 5-Step Startup Metrics Model Website.com R evenue $$$ Biz Dev Ads, Lead Gen, Subscriptions, ECommerce A CQUISITION SEO SEM Apps & Widgets Affiliates Email PR Biz Dev Campaigns, Contests Direct, Tel, TV Social Networks Blogs Domains R etention Emails & Alerts System Events & Time-based Features Blogs, RSS, News Feeds
One Step at a Time.
Make a Good Product : Activation & Retention
Market the Product : Acquisition & Referral
Make Money : Revenue & Profitability
The “Lean” VC: Lots of Little Bets, Incremental Investment
Method : Invest in lots of startups using incremental investment, iterative development. Start with many small experiments, filter out failures, and expand investment in successes… ( Rinse & Repeat) .
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