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Innovation accounting at BackupAgent

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This presentation was held by Robbert van Geldrop (@rvangeldrop) at Dutch Lean Startup Circle meetup on May 11th. It shows how BackupAgent puts Lean Startup and Innovation Accounting to practice.

This presentation was held by Robbert van Geldrop (@rvangeldrop) at Dutch Lean Startup Circle meetup on May 11th. It shows how BackupAgent puts Lean Startup and Innovation Accounting to practice.

Published in: Business, Technology

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  • 1. Innovation Accounting at BackupAgentLean startup principles put to practiceRobbert van Geldrop| Founder and CTODelft| 11 may 2012 1
  • 2. Agenda About BackupAgent Our traditional accounting Build, measure, learn for BackupAgent Examples of actionable metrics The future 2
  • 3. About BackupAgent Vendor of Cloud Backup Software • Founded in 2005, Funded in 2007 by Solid Ventures • HQ in Delft, The Netherlands No direct sales; exclusive through: • (Hosting) Service Providers • Telcos • Cloud Service Brokers • OEM agreement Where are we • Profitable business • 400+ partners in 50+ countries 3
  • 4. Our Business model BackupAgent currently sells monthly software licenses to partners: • Base and platform fees • Usage fees (per subscriber and stored GB) Optimize LTV per partner: • Provide marketing and product support to partners’ SMB High availability customers • Leverage usage fees by Multi-tenant developing additional features Private label 4
  • 5. Our traditional accounting We built a very powerful Rolling Forecast tool: • Excel sheet that anybody can use and understand • Integrates directly into our administration • Gives is absolute insight in cash flow at any time in any scenario We think every startup should use this, but: • It only captures the financial side of startup ‘progress’ • It’s actionable on cost-side but not on revenue side This tool is great for reporting to the outside world and keeping track of cash-flow. It does not provide break-through insights 5
  • 6. Build We build Cloud Backup Software Our desktop software has an unattended automatic update feature We apply Scrum and KanbanThe key question is always what to build or improve next 6
  • 7. Measure We have a lot to measure: • Which features are customers using? • On which platform are they installing it? • Which features can our partners sell best and why? Business model: • How to charge partners? • How much customers are they bringing in? 7
  • 8. Measure We measure software usage through DeskMetrics: • Features • OSes • Demographics We keep track of our install base through license reporting: • Increase of users • Increase of TBs 8
  • 9. Measure – qualitative data BackupAgent ALWAYS enriches data with in-depth interviews: • You need to know about cause and reason that hides behind data • These reasons and causes make the data actionableCustomer development is the best methodology for this 9
  • 10. Measure – Cohorts!‘A cohort is a group of people who share a common characteristic within adefined period’Cohorts can teach us about potential to scale and sustainability:The hard part is how to choose your cohortDo it yourself: http://www.alivelearn.net/?p=1240 10
  • 11. Learn Learning is not a system: • BackupAgent is only starting to embed the learning part • It’s the softest side of Lean Startup Active learning can be captured by the Business Model Canvas It’s the process that goes behind making and updating the canvas that really matters Not all learning takes places at a time you plan for it, ideally anyone could instantiate his/her own little iteration 11
  • 12. Learn – BackupAgent’s Canvas 12
  • 13. Real-life examples 13
  • 14. BackupAgent’s cohorts Cohort analysis shows partnerships are very sustainable over time: We wanted to validate the sustainability of our partner model: • Recruiting new partners is expensive • Not all of our partners are selling our services successfully This includes churn, so successful partners outgrow churning A sustainable partner network partners consistently. Invoiced usage fees per cohort of activated partners per Q validates further investment: • Increase marketing Metrics validate scaling of marketing effort: • Average Lifetime Value (LTV) = ±12,000 EUR • Develop new features faster • Cost of Acquisition (COCA) = ±5,500 EUR • 100% recurring revenues 14
  • 15. Validation of features and improvementsWe wanted to know if further improvement of our Exchange 2007plugin would be a good idea:Remember: we interviewed our partners about this too and theyconfirmed this finding 15
  • 16. New features – surveys and interviews Partners Mailbox level backup restore is an improvement for60% Exchange plugin50%40% ‘I consider BackupAgent incomplete without this feature’30% P20% ‘I am looking for alternatives for this.’10%0% Mailbox Level Restore Support for System State Support for Sharepoint Support for VMWare and/or Client for iPhone/Android (to Exchange 2010 backup on Windows Server 2007/2010. Hyper-V host-based backups. be able to restore data). 2008 R2 / SBS 2011. 16
  • 17. The future – closing the loopThe build-measure-learn iterations must become a repetitive process: 17
  • 18. Questions?Thank you for listening Follow us Robbert van Geldrop @BackupAgent robbert@backupagent.com facebook.com/BackupAgent @rvangeldrop youtube.com/user/backupagent linkedin.com/company/backupagent-bv