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Tech Talk: Measuring Innovation
This document discusses measuring innovation and progress for new business models. It argues that traditional metrics like revenue and ROI don't apply in early stages and proposes using "traction" instead. Traction is defined as the rate at which a business model captures monetizable value from customers. Different business model archetypes (direct, multi-sided, marketplace) are discussed and the document explains how traction would be measured for each, such as customer acquisition rate for direct models or transaction rate for marketplaces. Prioritizing reducing waste and achieving breakthrough through experimentation in 30-90 day iterations is recommended to increase traction.
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Tech Talk: Measuring Innovation
- 1. Measuring Innovation Ash Maurya- Founder of LEANSTACK, Author of “Scaling Lean” IET11T CA ACCELERATOR ZONE
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- 3. Anyone up forsome excel magic?
- 5. Traditional metrics likerevenue and ROI all track zero or negative at the earliest stages.
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- 7. Build velocity, validated learning, etc. Executionof an untested plan isn’t any better.
- 8. Things get evenmurkier after launch
- 9. In God wetrust, all others bring data. -W. Edwards Deming
- 10. Drowning in asea of data WTF?
- 11. Build velocity, validated learning, etc. TheDichotomy of the Progress Story Whatever demonstrates growth
- 12. We need adifferent measure of progress.
- 14. 01 Defining Progress OUTLINE 02Prioritizing Waste 03 Achieving Breakthrough
- 15. Whatdo both stakeholders andinnovators want?
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- 17. TRACTION matters aboveeverything else Yay!
- 20. Same data plotteddifferently
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- 22. Traction is theoutput of your business model.
- 23. A business modeldescribes how you create, deliver, and capture value. -Saul Kaplan
- 24. The hockey-stick curve TrackCustomer behavior
- 25. Create Value CaptureValue Cost (Deliver Value)
- 26. Create Value CaptureValue Cost (Deliver Value)>1 VALUE EQUATION
- 27. Create Value CaptureValue Cost (Deliver Value)>1 VALUE EQUATION >=2 MONETIZATION EQUATION
- 28. Create Value CaptureValue Cost (Deliver Value)> >=
- 29. TRACTION The rate atwhich a business model captures monetizable value from its customers.
- 30. Monetizable value isNOT current revenue but a leading indicator of future revenue.
- 31. Saas Freemium Trial E-commerce Ad-based Marketplace Big Data User GeneratedContent Retail Media Community Membership site Platform Open Source Enterprise Non-profit Social
- 32. Saas Freemium Trial E-commerce Ad-based Marketplace Big Data User GeneratedContent Retail Media Community Membership site Platform Open Source Enterprise Non-profit Social 3 business model archetypes
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- 35. Unaware visitors Happycustomers Direct models
- 36. Unaware visitors Happycustomers Direct models
- 37. TRACTION IN ADIRECT MODEL: The rate at which you create customers.
- 38. What customer behaviorslead to traction?
- 39. Unaware visitors Happycustomers Direct models
- 40. Unaware visitors Happycustomers Direct models Time spent in store correlated with money spent
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- 42. Unaware visitors Happyusers Multi-sided models
- 43. Unaware visitors Happyusers Multi-sided models Derivative asset
- 44. Unaware visitors Happyusers Multi-sided models Happy customers Derivative asset
- 45. Unaware visitors Happyusers Multi-sided models Happy customers Derivative asset Advertisers
- 46. TRACTION IN AMULTISIDED MODEL: Derivative asset to revenue exchange rate
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- 51.
- 52.
- 53. Unaware buyers Happybuyer Unaware sellers Happy seller $Transaction Marketplaces
- 55. TRACTION IN AMARKETPLACE MODEL: The rate of transactions.
- 56. 01 Defining Progress OUTLINE 02Prioritizing Waste 03 Achieving Breakthrough
- 57. Before you canprioritize waste, you have to be able to see the factory floor.
- 58. Unaware visitors Happycustomers
- 60. Goal Observe & Orient Leverage ExperimentAnalyze Next ActionLeverage ExperimentAnalyze NextAction Observe & Orient Goal G O L E A N 30-90 day iterations 1-4 week iterations
- 61. ASH MAURYA @ashmaurya ash@leanstack.com Get morecontent here: LeanStack.com