The Software Entrepreneurship Process 2013

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The Software Entrepreneurship Process 2013

  1. 1. 2 — Process From Code to Product gidgreen.com/course
  2. 2. From Code to Product Lecture 2 — Process — Slide 2 gidgreen.com/course
  3. 3. Lecture 2 !  Product development for startups !  Or… Customer development !  Or… How to avoid making an ice cream glove !  Or… How to discover the ice cream glove is actually a great idea From Code to Product Lecture 2 — Process — Slide 3 gidgreen.com/course
  4. 4. Lecture 2 •  Companies vs startups •  Product—Market fit •  The idea •  The first version •  Collecting data •  Iteration and pivots •  Are we there yet? From Code to Product Lecture 2 — Process — Slide 4 gidgreen.com/course
  5. 5. “Normal” companies •  Existing product •  Known market •  Established path to market •  Brand recognition •  Paying customers •  Revenue > Costs (usually) •  Incremental development From Code to Product Lecture 2 — Process — Slide 5 gidgreen.com/course
  6. 6. Startup companies •  Existing product No product •  Known market Uncertain market •  Established path to market •  Brand recognition Totally unknown •  Paying customers No customers •  Revenue > Costs Zero revenue •  Incremental development Clean slate From Code to Product Lecture 2 — Process — Slide 6 gidgreen.com/course
  7. 7. A company’s priorities •  Increase profit •  More customers •  More $ per customer •  Improve product •  New products •  New business area •  Acquire others From Code to Product Lecture 2 — Process — Slide 7 gidgreen.com/course
  8. 8. A startup’s priorities •  Increase profit Don’t die •  More customers Find some users •  More $ per customer Get $ from users •  Improve product Create a product •  New products •  New business area Find business area •  Acquire others Get acquired From Code to Product Lecture 2 — Process — Slide 8 gidgreen.com/course
  9. 9. Development by Waterfall From Code to Product Lecture 2 — Process — Slide 9 gidgreen.com/course Requirements Design Implementation Verification Maintenance
  10. 10. Development for startups From Code to Product Lecture 2 — Process — Slide 10 gidgreen.com/course Requirements Design Implementation Maintenance Ideas VerificationCollect Data 1 month or less…
  11. 11. Why do companies fail? From Code to Product Lecture 2 — Process — Slide 11 gidgreen.com/course Superceded UndercutSurpassed Attrition
  12. 12. Why do startups fail? •  Running out of… – Money – Ideas – Energy – Faith •  Before reaching… – Break even – A (lucky) exit From Code to Product Lecture 2 — Process — Slide 12 gidgreen.com/course
  13. 13. A startup is… “…a human institution designed to deliver a new product or service under conditions of extreme uncertainty.”— Eric Ries “…an organization formed to search for a repeatable and scalable business model” — Steve Blank From Code to Product Lecture 2 — Process — Slide 13 gidgreen.com/course
  14. 14. Lecture 2 •  Companies vs startups •  Product—Market fit •  The idea •  The first version •  Collecting data •  Iteration and pivots •  Are we there yet? From Code to Product Lecture 2 — Process — Slide 14 gidgreen.com/course
  15. 15. Product—Market Fit From Code to Product Lecture 2 — Process — Slide 15 gidgreen.com/course Time That incredible moment when you realize that many people truly need (or want) your product and you can make real money from it Ideas Implementation Collect Data
  16. 16. Startup stages From Code to Product Lecture 2 — Process — Slide 16 gidgreen.com/course Time Idea Version 1 Product Efficiency Product Market Fit
  17. 17. Lecture 2 •  Companies vs startups •  Product—Market fit •  The idea •  The first version •  Collecting data •  Iteration and pivots •  Are we there yet? From Code to Product Lecture 2 — Process — Slide 17 gidgreen.com/course
  18. 18. Sources of inspiration From Code to Product Lecture 2 — Process — Slide 18 gidgreen.com/course Own needs Business experience Current events Others’ success Wouldn’t it be cool? Everyone’s doing it!
  19. 19. Immediate questions •  Is it feasible? •  Why now? •  Why you? •  Who would want it? •  How will it grow? •  Could it make money? •  Is it defensible? •  Define success or failure From Code to Product Lecture 2 — Process — Slide 19 gidgreen.com/course
  20. 20. Why now? From Code to Product Lecture 2 — Process — Slide 20 gidgreen.com/course Critical mass New platform Troubled incumbent Bandwidth No one thought of it! Macro shifts
  21. 21. Some trends •  Cloud computing •  Big data •  Smartphones •  HTML5 •  QR codes •  3D printing From Code to Product Lecture 2 — Process — Slide 21 gidgreen.com/course •  Ageing in West •  Consultants •  Financial crisis •  BRIC countries •  Mobiles in Africa •  Outsourcing Technology Society Be a trend spotter, not a trend setter
  22. 22. Can it be done? •  Break into layers •  Find the hardest part – Algorithm – Performance – Compatibility – Scaling •  Find equivalents •  Do you know how? From Code to Product Lecture 2 — Process — Slide 22 gidgreen.com/course
  23. 23. Who would want it? •  Talk to your ideal customer – Use connections – Cold calls / emails – (Surveys) •  Search for competition •  Check search volumes •  Vaporware/prototypes •  Ask friends and family From Code to Product Lecture 2 — Process — Slide 23 gidgreen.com/course
  24. 24. How will it grow? From Code to Product Lecture 2 — Process — Slide 24 gidgreen.com/course Pure virality Self promoting Word of mouth Search engines Paid advertising Direct sales
  25. 25. Could it make money? •  What’s the model? – Is there enough pain? •  Is the market… – Large enough? – Long term? – Growing? •  Is there competition? •  Are there per-customer costs? From Code to Product Lecture 2 — Process — Slide 25 gidgreen.com/course
  26. 26. Is it defensible? From Code to Product Lecture 2 — Process — Slide 26 gidgreen.com/course Economy of scale Technology Accumulation Lock-in
  27. 27. Is it defensible? From Code to Product Lecture 2 — Process — Slide 27 gidgreen.com/course Network effects Brand awareness First mover advantage Outspending on advertising
  28. 28. Lecture 2 •  Companies vs startups •  Product—Market fit •  The idea •  The first version •  Collecting data •  Iteration and pivots •  Are we there yet? From Code to Product Lecture 2 — Process — Slide 28 gidgreen.com/course
  29. 29. The first version •  “Minimum viable product” •  Identify early adopters •  Build quickly •  Design for learning •  No barriers to use •  Aim to fail fast From Code to Product Lecture 2 — Process — Slide 29 gidgreen.com/course
  30. 30. What’s in? •  Simple interface •  Some explanation •  Metrics •  Feedback form •  Final product name •  Rapid deployment From Code to Product Lecture 2 — Process — Slide 30 gidgreen.com/course
  31. 31. What’s out? •  Beautiful interface •  Peripheral features •  Lots of options •  Scalable infrastructure •  Business model •  Bugs and glitches From Code to Product Lecture 2 — Process — Slide 31 gidgreen.com/course
  32. 32. Early Google From Code to Product Lecture 2 — Process — Slide 32 gidgreen.com/course
  33. 33. Early Amazon From Code to Product Lecture 2 — Process — Slide 33 gidgreen.com/course
  34. 34. Early Facebook From Code to Product Lecture 2 — Process — Slide 34 gidgreen.com/course
  35. 35. Version 1.0 “If you’re not embarrassed when you ship your first version you waited too long… You can never fully anticipate how an audience is going to react to something you’ve created until it’s out there.” — Matt Mullenweg, WordPress From Code to Product Lecture 2 — Process — Slide 35 gidgreen.com/course
  36. 36. Lecture 2 •  Companies vs startups •  Product—Market fit •  The idea •  The first version •  Collecting data •  Iteration and pivots •  Are we there yet? From Code to Product Lecture 2 — Process — Slide 36 gidgreen.com/course
  37. 37. Collecting data •  Change hats •  Observation – Direct – Remote •  Feedback emails •  Metrics •  Brand monitoring From Code to Product Lecture 2 — Process — Slide 37 gidgreen.com/course
  38. 38. Direct observation •  Find subjects – Advertise – Public places – Acquaintances •  Start from blank •  Don’t interfere – Questions allowed •  Discuss at end From Code to Product Lecture 2 — Process — Slide 38 gidgreen.com/course
  39. 39. Power of the few From Code to Product Lecture 2 — Process — Slide 39 gidgreen.com/course 0 5 10 15 20 25 0%  20%  40%  60%  80%  100%  ObservationsRequired Problem Likelihood  90% certainty
  40. 40. Remote observation From Code to Product Lecture 2 — Process — Slide 40 gidgreen.com/course
  41. 41. Feedback emails •  Read by product team •  Answer them •  Feedback = pre-sales •  Keep a tally •  Metadata •  Watch for jewels From Code to Product Lecture 2 — Process — Slide 41 gidgreen.com/course
  42. 42. Feedback tools From Code to Product Lecture 2 — Process — Slide 42 gidgreen.com/course
  43. 43. Real metrics •  Unique visits per … •  Registrations per … •  Downloads per … •  Searches for product name per … •  Engagement per user •  Retention per user •  Revenue per … From Code to Product Lecture 2 — Process — Slide 43 gidgreen.com/course
  44. 44. Vanity metrics •  Total … •  “Hits” •  Traffic from: –  Bots –  Script kiddies •  Publicity •  Purchased users •  One-time revenue From Code to Product Lecture 2 — Process — Slide 44 gidgreen.com/course
  45. 45. Brand monitoring From Code to Product Lecture 2 — Process — Slide 45 gidgreen.com/course
  46. 46. The building “In a startup no facts exist inside the building, only opinions… Get the hell outside the building.” — Steve Blank From Code to Product Lecture 2 — Process — Slide 46 gidgreen.com/course
  47. 47. Lecture 2 •  Companies vs startups •  Product—Market fit •  The idea •  The first version •  Collecting data •  Iteration and pivots •  Are we there yet? From Code to Product Lecture 2 — Process — Slide 47 gidgreen.com/course
  48. 48. Iterate to increase… •  For customer – Features – Usability – Marketing •  For you – Engagement – Growth rate – Revenue From Code to Product Lecture 2 — Process — Slide 48 gidgreen.com/course
  49. 49. Iteration priorities •  Bugs first! •  Show stoppers •  Popular requests – But maintain your vision •  Easy improvements •  Jewels = market openers •  Avoid specials From Code to Product Lecture 2 — Process — Slide 49 gidgreen.com/course
  50. 50. Serve, don’t obey “If I had asked people what they wanted, they would have said faster horses.” — attributed to Henry Ford “A lot of times people don't know what they want until you show it to them.” — Steve Jobs From Code to Product Lecture 2 — Process — Slide 50 gidgreen.com/course
  51. 51. Don’t be scared! From Code to Product Lecture 2 — Process — Slide 51 gidgreen.com/course 0 200000 400000 600000 800000 1000000 0 2 4 6 8 10 Users Years From 1,000 to 1,000,000 users at 10% per month
  52. 52. Persevere or Pivot? •  Metrics improving? •  Still learning? •  Stuck serving the few? •  Frustrated? •  Is failure defined? •  Be brave, be swift From Code to Product Lecture 2 — Process — Slide 52 gidgreen.com/course
  53. 53. Product Pivots •  Zoom in •  Zoom out •  Platform ↔ Application •  Technology •  Application of technology •  Reuse accumulated data From Code to Product Lecture 2 — Process — Slide 53 gidgreen.com/course
  54. 54. Other Pivots •  Business model •  Target customers •  High margin ↔ High volume •  Sales channel •  Clean slate From Code to Product Lecture 2 — Process — Slide 54 gidgreen.com/course
  55. 55. Famous Pivots From Code to Product Lecture 2 — Process — Slide 55 gidgreen.com/course
  56. 56. Lecture 2 •  Companies vs startups •  Product—Market fit •  The idea •  The first version •  Collecting data •  Iteration and pivots •  Are we there yet? From Code to Product Lecture 2 — Process — Slide 56 gidgreen.com/course
  57. 57. Are we there yet? “Startups occasionally ask me… whether they have achieved product/market fit… if you are asking, you’re not there yet.” — Eric Ries “In a great market — a market with lots of real potential customers — the market pulls product out of the startup.” — Marc Andreesen From Code to Product Lecture 2 — Process — Slide 57 gidgreen.com/course
  58. 58. Painting a picture “You can always feel when product/market fit isn't happening. The customers aren't quite getting value out of the product, word of mouth isn't spreading, usage isn't growing that fast, press reviews are kind of "blah", the sales cycle takes too long, and lots of deals never close. And you can always feel product/market fit when it's happening. The customers are buying the product just as fast as you can make it... Money from customers is piling up in your company checking account. You're hiring sales and customer support staff as fast as you can. Reporters are calling because they've heard about your hot new…” — Marc Andreesen From Code to Product Lecture 2 — Process — Slide 58 gidgreen.com/course
  59. 59. A rule of thumb “In my experience, achieving product/ market fit requires at least 40% of users saying they would be ‘very disappointed’ without your product.” — Sean Ellis From Code to Product Lecture 2 — Process — Slide 59 gidgreen.com/course
  60. 60. Sustainable growth •  Old business → New business •  User driven – Virality – Self promotion – Word of mouth •  Sales driven – Lifetime value > Acquisition cost – (beware competition) From Code to Product Lecture 2 — Process — Slide 60 gidgreen.com/course
  61. 61. Books From Code to Product Lecture 2 — Process — Slide 61 gidgreen.com/course gettingreal.37signals.com
  62. 62. A story… From Code to Product Lecture 2 — Process — Slide 62 gidgreen.com/course

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