Condensed description of lean start-up theory, customer development process and a case study on foursquare as presented at First Growth Venture Network session in March 2011.

1. Product – Market Fit First Growth Venture Network Jeff Bussgang (Flybridge Capital), Ari Paparo (Nielsen) March 10, 2011

2. Panel Objectives Explain what people mean when they use the phrase, “Product Market Fit” (PMF), plus: Customer Development Process Lean Start-Up Theory Help you devise your approach to achieving PMF Making sure you don’t waste a lot of money before you find PMF

3. Leading Thinkers Geoffrey Moore: Crossing the Chasm Steve Blank: Customer Development Process Eric Ries: Lean Startups Mark Leslie: Sales Learning Curve Sean Ellis: Lean Startup Marketing

4. Where Are You? After-Product Market Fit Before-Product Market Fit Building a robust, feature-rich product Crossing the chasm Metrics, analytics, funnels Designing for virality & scalability Scaling a sales force Challenges with corporate partnerships Building a brand Scaling the exec team Minimum viable product (MVP) Customer development process Selling to early adopters Lifetime value of customer Pivoting Bootstrapping Small, founding team Product-centric culture Source: HBS Prof. Tom Eisenmann, J.Bussgang

5. Crossing The Chasm

6. 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) Source: Eric Ries, Sean Ellis

7. Customer Developmentvs. Product Development Concept/Bus. Plan Product Dev. Alpha/Beta Test Launch/ 1st Ship Product Development Customer Development CustomerDiscovery Company Building CustomerValidation Customer Creation Source: Steve Blank

8. Foursquare Case Study From inception, best practices in PMF: MVP Product-centric culture and founding team $1.35m Series A Responded to every email, tweet Hunch-driven, not metrics-driven The founders were the target customer Contextual factors Tech trends enabled success: iPhone/apps, LBS/GPS, social media Impact of geography (NYC), launch (SXSW) and VC (Fred Wilson) Game mechanic, playful, entertaining Source: Pikorski, Eisenmann, Bussgang, HBS Case Study: “FourSquare”

9. Foursquare Case Study (2) Post PMF Challenges: Tech founder as scalable CEO $20m Series B - expectations Pressure to be more analytical Competitive response to Facebook, Yelp The founders no longer can do it all Monetization pressures – when to run experiments? Questions: Who is foursquare’s customer – the consumer or the business? What social failure is foursquare solving? When should foursquare focus on monetization vs. consumer scale? Has foursquare crossed the chasm? Source: Pikorski, Eisenmann, Bussgang, HBS Case Study: “FourSquare”

10. “Lessons Learned” Drives Funding Test Hypotheses Concept Business Plan Lessons Learned Series A Do this first instead of fund raising Source: Steve Blank

11. Product – Market Fit First Growth Venture Network Panel Jeff Bussgang (Flybridge Capital), Ari Paparo (Nielsen) March 10, 2011