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.
Startup 2.0: a Silicon Valley StoryPresentation Transcript
Startup 2.0: A Silicon Valley Story Engineering Better Startups with Incubators, Metrics & Iterative Development Dave McClure ( @DaveMcClure ) Founders Fund / 500 Hats Echelon May 2010 (Singapore)
Topics
Venture Capital 1.0 = * Broken Model* (for Internet Startups)
M&A Trends : More & Smaller Acquisitions (Very Few IPOs)
Incubators : Many Experiments (most FAIL , a few winners)
Startup Incubators Lots of Hot, Cool, Web 2.0! (+ lots of FAIL, too.)
Startup 2.0: “Lean Investor” Model
Method : Invest in many startups using incremental investment, iterative development. Start with lots of small experiments, filter out failure, and expand investment upon success… ( Rinse & Repeat) .
Minimize TOTAL time through the loop LEARN BUILD MEASURE IDEAS CODE DATA Source: Eric Ries, The Lean Startup
The Startup Pyramid (Sean Ellis, Startup-Marketing.com) [email_address] Blog: startup-marketing.com
Startup Metrics for Pirates
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
Q: What’s My Business Model?
Can be one of the following:
2. Get Users (= Acquisition, Referral)
Drive Usage (= Activation, Retention)
3. Make Money (= Revenue*)
* ideally profitable revenue
(note: eventually need to turn Users / Usage -> Money )
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