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Berkeley-Columbia Executive MBA Program (Steve Blank)

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Slides from guest lecture in Steve Blank's course in the Berkeley-Columbia Executive MBA Program.

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Berkeley-Columbia Executive MBA Program (Steve Blank)

  1. 1. Customer Development<br />Sean Ellis<br />Berkeley-Columbia Executive MBA Program (Steve Blank)<br />October 16, 2009<br />
  2. 2. Startup Risk & Upside = Customers<br />Traction is tough<br />Acquiring at scale even tougher<br />Where do you start?<br />Hundreds of things you “could do”<br />Most early marketing effort wasted<br />2<br />startup-marketing.com<br />
  3. 3. Road to IPOs: What Really Mattered?<br />Apply engineering to marketing<br />Focus on right metrics & optimize<br />Understand users and use cases<br />Early execution is most critical<br />3<br />startup-marketing.com<br />
  4. 4. My Key Focus Now Critical Zone<br />Critical<br />Zone<br />IPOs<br />Growth Stage<br />Then light advising in growth stage<br />4<br />startup-marketing.com<br />
  5. 5. Customer Development Sequence<br />5<br />startup-marketing.com<br />
  6. 6. Growth Starts with Right Product<br />6<br />startup-marketing.com<br />
  7. 7. What is Product/Market Fit?<br />People want/need your product<br />And they represent large enough market<br />Differentiated from alternatives<br />Users will pay for your product<br />Or you are advertising supported<br />7<br />startup-marketing.com<br />
  8. 8. “Life of any startup can be divided into two parts -before P/M fit and after P/M fit”<br />Marc Andreessen<br />Founder Netscape, Opsware, Ning<br />8<br />startup-marketing.com<br />
  9. 9. PayPal’s Quest for P/M Fit<br />$200K seed funding - cryptography<br />“No one really needed it” Max Levchin<br />$4.5M VC funding - PDA payments<br />People preferred web demo (100X users)<br />$1.5B sale to eBay – web payments<br />9<br />startup-marketing.com<br />
  10. 10. Survey Your Product/Market Fit<br />Free template at Survey.io<br />10<br />startup-marketing.com<br />
  11. 11. Key Product/Market Fit Question<br />“How would you feel if you could no longer use Product?”<br />11<br />startup-marketing.com<br />
  12. 12. Transition to Growth<br />12<br />startup-marketing.com<br />
  13. 13. Transition to Growth<br />Track/report right metrics<br />Positioning (based on perceived value)<br />Start recruiting head of marketing<br />Viable economics (business model)<br />Scalable growth strategy<br />13<br />startup-marketing.com<br />
  14. 14. Hiring/Managing VP Marketing<br />Hire marketer with founder DNA<br />CEO & VP Marketing form partnership<br />CEO shouldn’t abdicate startup’s fate<br />Goal = Scalable, profitable channels<br />Insist on perfect execution <br />14<br />startup-marketing.com<br />
  15. 15. Optimize Before Growing<br />Landing pages<br />Funnel (acquisition through transaction)<br />12%<br />13%<br />8%<br />…<br />15<br />startup-marketing.com<br />
  16. 16. Scalable Growth Now Possible<br />17<br />startup-marketing.com<br />
  17. 17. Test from Free to Paid Channels<br />18<br />startup-marketing.com<br />
  18. 18. Driving/Managing Growth<br />Budget to maximize positive ROI spend<br />19<br />startup-marketing.com<br />
  19. 19. Improve Lifetime Value<br />Customer retention is critical<br />Cross/up sell additional products<br />This expands profitable channels<br />20<br />startup-marketing.com<br />
  20. 20. Complete Startup Pyramid<br />Growth<br />Optimize<br />Economics<br />Positioning<br />Product/Market Fit<br />Twitter: @seanellis<br />Blog: startup-marketing.com<br />

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