Startup Marketing Slides from Lean Startup Circle LA


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These slides explain why network effect startups require a very different go to market approach than "normal" startups.

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  • Value can’t be dictated, it has to be crowd sourcedSomebody loves it - who, why?Fine tune product, messaging around this “must have” use case
  • Landscape of choices quickly changes. Only a “must have” when no good alternatives, then “nice to have”
  • Range and scalability of viable channels dramatically increases
  • Becomes more like regular marketing (but keep metrics driven discipline)
  • Acquisition, Activation, Retention, Referral, Revenue
  • Range and scalability of viable channels dramatically increases
  • Range and scalability of viable channels dramatically increases
  • Startup Marketing Slides from Lean Startup Circle LA

    1. Lean Startup Marketing<br />Driving Sustainable Growth at Normal Vs Network Effect Startups<br />Sean Ellis<br />Lean Startup LA<br />August 10, 2010<br />
    2. Objectives for Today’s Meeting<br />Apply lean startup principles to driving growth<br />Normal startup<br />Network effect startup<br />Refine based on group feedback<br />2<br /><br />
    3. What are the Lean Startup Principles?<br />Nail it then scale it<br />Rapid hypothesis testing about market, pricing, customers (customers & markets unknown)<br />MVP (Minimum viable product)<br />Low burn by design (no scaling until revenue)<br />Metrics, iteration, agile development<br />Learn fast (fail fast)<br />3<br /><br />
    4. “Lean-ish” Mktg = Back-to-Back IPOs<br />First Startup Goals (1996 launch)<br />Lead online game category<br />Get users at cost lower than user value (ARPU)<br />Minimize waste via sophisticated metrics<br />Second Startup Added Goals (2003 launch)<br />Understand user perceptions of value<br />Optimize funnel (reduce friction)<br />4<br /><br />
    5. “Value” in Normal Vs Network Effect<br />Normal <br />Value same with 1 user or 1m users<br />Google<br />LogMeIn<br />Xobni<br />Network effect <br />Value improves with more users<br />Facebook<br />Skype<br />Ebay<br />5<br /><br />
    6. Growing Valuable “Normal” Startup<br />6<br /><br />
    7. Creating Value: Normal Startup<br />Product/market fit = product is “must have” (value)<br />Become a “must have” with customer development<br />Validate “value” assumptions early (who needs/why?)<br />Get users on first release ASAP<br />Find “must have” users/use cases<br />Facts outside building (interviews then surveys)<br />Pivot if necessary to create value<br />7<br /><br />
    8. Key “Value” Question on<br />“How would you feel if you could no longer use Product?”<br />8<br /><br />
    9. Start Transition to Growth<br />9<br /><br />
    10. After P/M fit: Race to Scale<br />“Value” is perishable (“MH” window of opp)<br />Focus on speed rather than short-term burn* <br />Long-term burn will be less with speed<br />Difficult after “low burn” VC praise<br />Requires major shift in culture<br /> Culture shifts from patience to speed<br />* During growth transition<br />10<br /><br />
    11. Key Growth Transition Projects<br />Understand– core value perceived<br />Positioning - based on perceived value<br />Right metrics – to focus resources<br />Optimize conversions - LP & funnel<br />Viable economics - business model<br />Scalable growth strategy - who/intent?<br />11<br /><br />
    12. Optimize Before Growing<br />Landing pages<br />12%<br />13%<br />8%<br />…<br />12<br /><br />
    13. 2. Visualize/Optimize Funnel<br />Home Page<br />200,000<br />100000<br />50%<br />Signup<br />50000<br />100,000<br />12.5&<br />12.5%<br />Path 2<br />Path 1<br />25000<br />X000<br />25000<br />X%<br />Path 1 (step 2)<br />X000<br />X00<br />X%<br />X%<br />X%<br />X%<br />Paid<br />Paid<br />Free<br />Free<br />X000<br />X00<br />X00<br />X000<br />13<br /><br />
    14. Better conversion efficiency and rev per user<br /> Improves range & scalability of viable channels<br />14<br /><br />
    15. Scalable Growth Now Possible<br />15<br /><br />
    16. Test from Free to Paid Channels<br />16<br /><br />
    17. Driving/Managing Growth<br />Spend as many positive ROI dollars as possible<br />17<br /><br />
    18. Normal Startup Easy VS Network Effect<br />18<br /><br />
    19. Network Effect Business<br /> Critical Mass Required for Full Validation<br />(Lean is normally antithesis of “get big fast”)<br />19<br /><br />
    20. Pre Growth Prep for Network Effect<br />Customer Dev critical to validate up front<br />Raise enough money to get past “no man’s land”<br />Define minimum viable critical mass (MVCM)<br />Facebook– Harvard, Twitter - SXSW<br />Within region, demographic, product type (mkt place)…<br />Have strategy for “priming the pump” (or fly wheel)<br />20<br /><br />
    21. Scale & Optimize On the Fly<br />Scale growth to MVCM (minimum viable critical mass)<br />Generate revenue early<br />Engage users to reposition, iterate and optimize on the fly<br />Engage to validate gratification reached<br />Replicate approach for next critical mass after gratification in first MVCM<br />22<br /><br />
    22. Priming the Pump (for Some)*<br />Create network balance<br />Ebay, dating sites, etc.<br />Example short-term strategies<br />Subsidize customer acquisition for dragging 1/2<br />Services or hands on to “fake” balance (Aardvark)<br />*i.e. if buyers and sellers<br />21<br /><br />
    23. Network Effect = P/M Fit After Critical Mass<br />Product/Market Fit<br />(Reposition on Value)<br />Get Efficient Conversions<br />Drive Growth<br />23<br /><br />
    24. But Standard Pyramid for Most<br />24<br /><br />