The document discusses the Lean Startup methodology, emphasizing the importance of quickly testing business hypotheses through Minimum Viable Products (MVPs) and iterative feedback loops. It highlights various metrics and tools for measuring innovation, customer behavior, and growth engines, underscoring the need for actionable and credible data. The document also touches on the concept of pivoting when necessary and provides contact information for further inquiries.

1. Lean Startup
is awesome

2. Who Am I
Joshua Cyr
Developer and Startup Enthusiast
Owner Alpha Loft - Coworking in Portsmouth
focused on tech/creative/startup
Run the Startup Meetup / Web Dev Meetup

3. What is Lean Startup
Lean Startup is a rigorous process for iterating
from Plan A to a plan that works.

4. Leap of Faith Hypothesis
Your business model is actually a leap of faith.
Find a way to test your hypothesis as quickly as
possible.

5. Examples
Will people listen to music privately in public
setting?
Will people pay for music online?
Will people share their personal moments on
video in a public portal?
Will people share their dating interests publicly?

6. Feedback Loop

7. My MVP
The term ‘Minimum Viable Product’ is best
thought of as “the smallest iteration of work
you can do to validate your assumptions”.
The product in MVP can be a misnomer as it’s
not always a tactile object.

8. Minimum Viable Product
How we test our Leap of Faith.
How we know what is working and not.
How we do it quickly.

9. Minimum Viable Product
Iterate often.
Measure EVERYTHING
Fail quickly and learn from it to improve.

10. Minimum Viable Product

11. Short Cycles
Stuffing Envelopes - Efficiency vs Reality
What if something is wrong?
We can perfectly execute what ends up being a
failed hypothesis.

12. Customer Interviews
The average person isn’t usually very good at
giving feedback on something that doesn’t exist.
That’s why we create a small product for our
customer to play with.

14. Measuring
Innovation Accounting and Measurement
Build into our product and process
such as Split Tests.
Learn from mistakes.

15. Cohort Analysis
Full Month
Sign Up
9700 (100%)
Download
5804 (59%)
Activate/Install
3186 (32%)
Purchase
1147 (12%)

16. Cohort Analysis
Full Month
Week 1
Week 2
Week 3
Week 4
Sign Up
9700 (100%)
Sign Up
2100 (100%)
Sign Up
2450 (100%)
Sign Up
2550 (100%)
Sign Up
2600 (100%)
Download
5804 (59%)
Download
1218 (58%)
Download
1470 (60%)
Download
1530 (60%)
Download
1586 (61%)
Activate/Install
3186 (32%)
Activate/Install
630 (30%)
Activate/Install
808 (33%)
Activate/Install
1020 (40%)
Activate/Install
728 (28%)
Purchase
1147 (12%)
Purchase
210 (11%)
Purchase
269 (11%)
Purchase
408 (16%)
Purchase
260 (10%)

17. Split Test
Control
Layout A
Layout B
Sign Up
2000 (100%)
Sign Up
2100 (100%)
Sign Up
2450 (100%)
Download
1100 (55%)
Download
1449 (69%)
Download
1470 (60%)
Activate/Install
600 (30%)
Activate/Install
945 (45%)
Activate/Install
808 (33%)
Purchase
200 (10%)
Purchase
630 (30%)
Purchase
269 (11%)

18. Build Into Your MVP
To properly measure we need it built INTO our
Minimum Viable Product.
Which means it must be part of your MVP, not
tacked on after.

19. Vanity Metrics
Millions of downloads vs no activations.
Incredible website growth vs no paying
customers.
20% month over month customer registrations
vs flatline customer return rate.

20. Useful Metrics
Actionable:
Is there a clear cause and effect?
Accessible:
Is the measurement simple to understand and
available to all? Internal finger pointing?
Auditable:
Is the measurement credible to all employees?

21. Growth Engines
How can we understand our likely growth
engine so that we may know how to measure
and thus improve?

22. Sticky Engine
Example: Games, Auction Sites
Measuring new customers not enough
information.
Customer retention and Churn rate of existing
customers key.
Customer Acquisition must be > Attrition
Reducing Churn is key aim.

23. Viral Engine
Social Networks, Tupperware
Viral Coefficient is key measurement
1 person in 10 recommends product = 0.1
Not a sustainable loop.
1.0+ Coefficient = 1 person brings > 1 new
person in.

24. Viral Engine Visual

25. Viral Engine Example
Hotmail
Sluggish growth at first.
Added "P.S. Get your free email on Hotmail" to
bottom of every email.
1 Million in 6 Months
5 Weeks later 2 Million.
18 Months later 12 Million / $400 Million Sale.

26. Paid Engine
Measure Lifetime Value of Customer
Must be greater than Customer Acquisition
Cost.
Customer Acquisition includes
Advertising, Outbound Sales, Retail Location,
etc.

27. Tuning Feedback Loop Key
8% vs 10%

28. Tuning Feedback Loop Key
8% vs 10%
Compounding Growth Rate As Of
Company A
Company B
Six Months Ago
0.5%
9.8%
Five Months Ago
2.0%
9.6%
Four Months Ago
3.2%
9.9%
Three Months Ago
4.9%
9.8%
Two Months Ago
6.1%
9.7%
One Month Ago
8.0%
10.0%

29. Burn Rate
runway = cash on hand / burn rate
# iterations = runway / speed of each iteration
How many iterations do you have left?
How many businesses are exactly the same as
when they started off?

30. Time to Pivot
Is it time to change direction?
Options:
● Zoom In: Focus on one Feature
● Change Vertical Markets
● Focus on new Customer Segment
● New Product Idea Entirely
Goal is to do this before you run out of funds.

31. Pivot Examples
Groupon
Twitter
Draw Something
Instagram

32. How To Contact
AlphaLoft.com
Seacoast.io
@jcyr
@alpha_loft
jcyr@joshuacyr.com