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Metrics for Startup Success and Failure

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A talk I gave at the Customer and Business Development Class at Berkeley taught by Steve Blank and Eric Ries.

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  • This was passed our way by David Crow of StartupNorth after the #leanstartup panel discussion at MaRS on March 10, 2011. Great tips for start-ups!
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Metrics for Startup Success and Failure

  1. Metrics that Matter Defining startup success and failure Hiten Shah Customer and Business Development Class at Berkeley • Mar 9, 2010
  2. The Startup Pyramid The Race to the Top Growth Transition to Growth Product / Market Fit Sean Ellis: Startup-Marketing.com
  3. Product / Market Fit • Low burn, focused on product, no VPs / sales people • Customer Development (Steve Blank, Four Steps) • Minimum Viable Product (Eric Ries, The Lean Startup) • Pivots (Eric Ries, The Lean Startup) “…the life of any startup can be divided into two parts – before product/market fit and after product/market fit.” Marc Andreesen, Founder of Netscape
  4. Customer Development • It’s all about learning and discovery • Outlined by Steve Blank in Four Steps to the Epiphany
  5. Minimum Viable Product • Coined by Eric Ries as part of The Lean Startup • Lean Startups are a series of MVP’s • Each designed to answer a specific question (hypothesis) “ The minimum viable product (MVP) is often an ad on Google. Or a PowerPoint slide. Or a dialog box. Or a landing page. You can often build it in a day or a week.” Nivi, Venture Hacks
  6. “ If Apple can launch a smartphone without Find or Cut-and- Paste, what can you cut out of your product requirements?” Lance Glasser, former CTO KLA-Tencor
  7. “ The first version of Gmail was literally written in a day” Paul Buchheit, Google / Friendfeed / Facebook
  8. Pivot “ The idea that successful startups change directions but stay grounded in what they've learned.” Eric Ries, The Lean Startup • Segment pivot - existing product, different customers • Customer problem pivot - same customers, different problem • Feature pivot - pick a feature and reorient around it
  9. Product / Market Fit Metrics Created by Sean Ellis (12in6) • 40%+ of users say they would be “very disappointed” • Representative of a large enough target market • Use Survey.io to get started Sean Ellis: Startup-Marketing.com
  10. Transition to Growth “ Once you have achieved product/market fit, it’s time to accelerate through the next steps of the pyramid and then begin scaling your business.” Sean Ellis, 12in6 • Positioning - optimize first user experience via messaging • Economics - implement a business model • Optimization - track and report on the right metrics
  11. First Product Iteration Target Customer: Social Application Developers
  12. Pivot 1 Target Customer: Many customer types
  13. Pivot 2 Target Customer: 1 specific customer type
  14. “Metrics are people, too” Eric Ries, The Lean Startup
  15. Test Things for Yourself!
  16. Thank You! “Passionate about helping other entrepreneurs and startup people.” @hnshah hshah@kissmetrics.com

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