The document discusses applying lean startup principles to foster growth in both normal and network effect startups. It emphasizes rapid hypothesis testing, customer development, and optimizing conversion rates while ensuring product/market fit before scaling. Key strategies include validating value assumptions early, managing growth efficiently, and transitioning from a low burn to a growth-focused culture.

1. Lean Startup MarketingDriving Sustainable Growth at Normal Vs Network Effect StartupsSean EllisLean Startup LAAugust 10, 2010

2. Objectives for Today’s MeetingApply lean startup principles to driving growthNormal startupNetwork effect startupRefine based on group feedback2startup-marketing.com

3. What are the Lean Startup Principles?Nail it then scale itRapid hypothesis testing about market, pricing, customers (customers & markets unknown)MVP (Minimum viable product)Low burn by design (no scaling until revenue)Metrics, iteration, agile developmentLearn fast (fail fast)3startup-marketing.com

4. “Lean-ish” Mktg = Back-to-Back IPOsFirst Startup Goals (1996 launch)Lead online game categoryGet users at cost lower than user value (ARPU)Minimize waste via sophisticated metricsSecond Startup Added Goals (2003 launch)Understand user perceptions of valueOptimize funnel (reduce friction)4startup-marketing.com

5. “Value” in Normal Vs Network EffectNormal Value same with 1 user or 1m usersGoogleLogMeInXobniNetwork effect Value improves with more usersFacebookSkypeEbay5startup-marketing.com

6. Growing Valuable “Normal” Startup6startup-marketing.com

7. Creating Value: Normal StartupProduct/market fit = product is “must have” (value)Become a “must have” with customer developmentValidate “value” assumptions early (who needs/why?)Get users on first release ASAPFind “must have” users/use casesFacts outside building (interviews then surveys)Pivot if necessary to create value7startup-marketing.com

8. Key “Value” Question on Survey.io“How would you feel if you could no longer use Product?”8startup-marketing.com

9. Start Transition to Growth9startup-marketing.com

10. After P/M fit: Race to Scale“Value” is perishable (“MH” window of opp)Focus on speed rather than short-term burn* Long-term burn will be less with speedDifficult after “low burn” VC praiseRequires major shift in culture Culture shifts from patience to speed* During growth transition10startup-marketing.com

11. Key Growth Transition ProjectsUnderstand– core value perceivedPositioning - based on perceived valueRight metrics – to focus resourcesOptimize conversions - LP & funnelViable economics - business modelScalable growth strategy - who/intent?11startup-marketing.com

12. Optimize Before GrowingLanding pages12%13%8%…12startup-marketing.com

13. 2. Visualize/Optimize FunnelHome Page200,00010000050%Signup50000100,00012.5&12.5%Path 2Path 125000X00025000X%Path 1 (step 2)X000X00X%X%X%X%PaidPaidFreeFreeX000X00X00X00013startup-marketing.com

14. Better conversion efficiency and rev per user Improves range & scalability of viable channels14startup-marketing.com

15. Scalable Growth Now Possible15startup-marketing.com

16. Test from Free to Paid Channels16startup-marketing.com

17. Driving/Managing GrowthSpend as many positive ROI dollars as possible17startup-marketing.com

18. Normal Startup Easy VS Network Effect18startup-marketing.com

19. Network Effect Business Critical Mass Required for Full Validation(Lean is normally antithesis of “get big fast”)19startup-marketing.com

20. Pre Growth Prep for Network EffectCustomer Dev critical to validate up frontRaise enough money to get past “no man’s land”Define minimum viable critical mass (MVCM)Facebook– Harvard, Twitter - SXSWWithin region, demographic, product type (mkt place)…Have strategy for “priming the pump” (or fly wheel)20startup-marketing.com

21. Scale & Optimize On the FlyScale growth to MVCM (minimum viable critical mass)Generate revenue earlyEngage users to reposition, iterate and optimize on the flyEngage to validate gratification reachedReplicate approach for next critical mass after gratification in first MVCM22startup-marketing.com

22. Priming the Pump (for Some)*Create network balanceEbay, dating sites, etc.Example short-term strategiesSubsidize customer acquisition for dragging 1/2Services or hands on to “fake” balance (Aardvark)*i.e. if buyers and sellers21startup-marketing.com

23. Network Effect = P/M Fit After Critical MassProduct/Market Fit(Reposition on Value)Get Efficient ConversionsDrive Growth23startup-marketing.com

24. But Standard Pyramid for Most24startup-marketing.com