Startup Marketing Slides from Lean Startup Circle LA
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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.

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 Startup Marketing Slides from Lean Startup Circle LA Presentation Transcript

  • Lean Startup Marketing
    Driving Sustainable Growth at Normal Vs Network Effect Startups
    Sean Ellis
    Lean Startup LA
    August 10, 2010
  • Objectives for Today’s Meeting
    Apply lean startup principles to driving growth
    Normal startup
    Network effect startup
    Refine based on group feedback
    2
    startup-marketing.com
  • What are the Lean Startup Principles?
    Nail it then scale it
    Rapid hypothesis testing about market, pricing, customers (customers & markets unknown)
    MVP (Minimum viable product)
    Low burn by design (no scaling until revenue)
    Metrics, iteration, agile development
    Learn fast (fail fast)
    3
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  • “Lean-ish” Mktg = Back-to-Back IPOs
    First Startup Goals (1996 launch)
    Lead online game category
    Get users at cost lower than user value (ARPU)
    Minimize waste via sophisticated metrics
    Second Startup Added Goals (2003 launch)
    Understand user perceptions of value
    Optimize funnel (reduce friction)
    4
    startup-marketing.com
  • “Value” in Normal Vs Network Effect
    Normal
    Value same with 1 user or 1m users
    Google
    LogMeIn
    Xobni
    Network effect
    Value improves with more users
    Facebook
    Skype
    Ebay
    5
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  • Growing Valuable “Normal” Startup
    6
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  • Creating Value: Normal Startup
    Product/market fit = product is “must have” (value)
    Become a “must have” with customer development
    Validate “value” assumptions early (who needs/why?)
    Get users on first release ASAP
    Find “must have” users/use cases
    Facts outside building (interviews then surveys)
    Pivot if necessary to create value
    7
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  • Key “Value” Question on Survey.io
    “How would you feel if you could no longer use Product?”
    8
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  • Start Transition to Growth
    9
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  • 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 speed
    Difficult after “low burn” VC praise
    Requires major shift in culture
    Culture shifts from patience to speed
    * During growth transition
    10
    startup-marketing.com
  • Key Growth Transition Projects
    Understand– core value perceived
    Positioning - based on perceived value
    Right metrics – to focus resources
    Optimize conversions - LP & funnel
    Viable economics - business model
    Scalable growth strategy - who/intent?
    11
    startup-marketing.com
  • Optimize Before Growing
    Landing pages
    12%
    13%
    8%

    12
    startup-marketing.com
  • 2. Visualize/Optimize Funnel
    Home Page
    200,000
    100000
    50%
    Signup
    50000
    100,000
    12.5&
    12.5%
    Path 2
    Path 1
    25000
    X000
    25000
    X%
    Path 1 (step 2)
    X000
    X00
    X%
    X%
    X%
    X%
    Paid
    Paid
    Free
    Free
    X000
    X00
    X00
    X000
    13
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  • Better conversion efficiency and rev per user
    Improves range & scalability of viable channels
    14
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  • Scalable Growth Now Possible
    15
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  • Test from Free to Paid Channels
    16
    startup-marketing.com
  • Driving/Managing Growth
    Spend as many positive ROI dollars as possible
    17
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  • Normal Startup Easy VS Network Effect
    18
    startup-marketing.com
  • Network Effect Business
    Critical Mass Required for Full Validation
    (Lean is normally antithesis of “get big fast”)
    19
    startup-marketing.com
  • Pre Growth Prep for Network Effect
    Customer Dev critical to validate up front
    Raise enough money to get past “no man’s land”
    Define minimum viable critical mass (MVCM)
    Facebook– Harvard, Twitter - SXSW
    Within region, demographic, product type (mkt place)…
    Have strategy for “priming the pump” (or fly wheel)
    20
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  • Scale & Optimize On the Fly
    Scale growth to MVCM (minimum viable critical mass)
    Generate revenue early
    Engage users to reposition, iterate and optimize on the fly
    Engage to validate gratification reached
    Replicate approach for next critical mass after gratification in first MVCM
    22
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  • Priming the Pump (for Some)*
    Create network balance
    Ebay, dating sites, etc.
    Example short-term strategies
    Subsidize customer acquisition for dragging 1/2
    Services or hands on to “fake” balance (Aardvark)
    *i.e. if buyers and sellers
    21
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  • Network Effect = P/M Fit After Critical Mass
    Product/Market Fit
    (Reposition on Value)
    Get Efficient Conversions
    Drive Growth
    23
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  • But Standard Pyramid for Most
    24
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