2. I can’t tell you how to succeed
(If I could, I’d be starting your company instead of standing here.)
3. I can tell you how to avoid failure
(At least, some forms of it.)
4. Percent of businesses that fail
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
71%69%66%63%60%55%50%44%36%25%
http://www.statisticbrain.com/startup-failure-by-industry/
5. Still operating after 4 years
Finance Insurance and Real Estate
Education and Health
Agriculture
Services
Wholesale
Mining
Manufacturing
Construction
Retail
Transportation Communication and Utilities
Information 37%
45%
47%
47%
49%
51%
54%
55%
56%
56%
58%
http://www.statisticbrain.com/startup-failure-by-industry/
6. Why firms die
http://www.statisticbrain.com/startup-failure-by-industry/
Neglect,
fraud,
disaster
1%
Lack of industry
experience
13%
Lack of managerial
experience
34%
Incompetence
52%
Emotional Pricing
Living too high for the business
Nonpayment of taxes
No knowledge of pricing
Lack of planning
No knowledge of financing
No experience in record-keeping
Poor credit granting
practices
Expansion too rapid
Inadequate borrowing
practices
Carry inadequate inventory
No knowledge of suppliers
Wasted advertising budget
19. Everyone’s idea is
the best right?
People love
this part!
(but that’s not always
a good thing)
This is where
things fall apart.
No data, no
learning.
20. Most startups don’t know what they’ll
be when they grow up.
Hotmail
was a
database
company
Flickr
was going to
be an MMO
Twitter
was a
podcasting
company
Autodesk
made
desktop
automation
Paypal
first built for
Palmpilots
Freshbooks
was invoicing
for a web
design firm
Wikipedia
was to be
written by
experts only
Mitel
was a
lawnmower
company
22. First calculator
(stepped reckoner)
One of the first
to recognize the
importance of
binary.
“I thought again
about my early plan
of a new language or
writing-system of
reason, which could
serve as a
communication tool
for all different
nations..”
23. The best of all possible
worlds is the one in
which the fewest
starting conditions
produce the greatest
variety of outcomes.
37. A good metric is:
Understandable
If you’re busy
explaining the
data, you won’t
be busy acting
on it.
Comparative
Comparison is
context.
A ratio or rate
The only way to
measure
change and roll
up the tension
between two
metrics (MPH)
Behavior
changing
What will you
do differently
based on the
results you
collect?
39. Metrics help you know yourself.
Acquisition
Hybrid
Loyalty
70%
of retailers
20%
of retailers
10%
of retailers
You are
just like
Customers that
buy >1x in 90d
Once
2-2.5
per year
>2.5
per year
Your customers
will buy from you
Then you are
in this mode
1-15%
15-30%
>30%
Low acquisition
cost, high checkout
Increasing return
rates, market share
Loyalty, selection,
inventory size
Focus on
(Thanks to Kevin Hillstrom for this.)
40. Qualitative
Unstructured, anecdotal,
revealing, hard to
aggregate, often too
positive & reassuring.
Warm and fuzzy.
Quantitative
Numbers and stats.
Hard facts, less insight,
easier to analyze; often
sour and disappointing.
Cold and hard.
41. Exploratory
Speculative. Tries to find
unexpected or
interesting insights.
Source of unfair
advantages.
Cool.
Reporting
Predictable. Keeps you
abreast of the normal,
day-to-day operations.
Can be managed by
exception.
Necessary.
42. Rumsfeld on Analytics
(Or rather, Avinash Kaushik channeling Rumsfeld)
Things we
know
don’t
know
we know Are facts which may be wrong and
should be checked against data.
we don’t
know
Are questions we can answer by
reporting, which we should baseline
& automate.
we know
Are intuition which we should
quantify and teach to improve
effectiveness, efficiency.
we don’t
know
Are exploration which is where
unfair advantage and interesting
epiphanies live.
43. MayAprMarFeb
Slicing and dicing data
Jan
0
5,000
Activeusers
Cohort:
Comparison of
similar groups
along a timeline.
(this is the April cohort)
A/B test:
Changing one thing
(i.e. color) and
measuring the
result (i.e. revenue.)
Multivariate
analysis
Changing several
things at once to
see which correlates
with a result.
☀
☁
☀
☁
Segment:
Cross-sectional
comparison of all
people divided by
some attribute (age,
gender, etc.)
☀
☁
45. January February March April May
Rev/customer $5.00 $4.50 $4.33 $4.25 $4.50
Is this company
growing or stagnating?
Cohort 1 2 3 4 5
January $5 $3 $2 $1 $0.5
February $6 $4 $2 $1
March $7 $6 $5
April $8 $7
May $9
How about
this one?
46. Cohort 1 2 3 4 5
January $5 $3 $2 $1 $0.5
February $6 $4 $2 $1
March $7 $6 $5
April $8 $7
May $9
Averages $7 $5 $3 $1 $0.5
Look at the
same data
in cohorts
47. Lagging
Historical. Shows you
how you’re doing;
reports the news.
Example: sales.
Explaining the
past.
Leading
Forward-looking.
Number today that
predicts tomorrow;
reports the news.
Example: pipeline.
Predicting the
future.
50. Correlated
Two variables that are
related (but may be
dependent on
something else.)
Ice cream &
drowning.
Causal
An independent variable
that directly impacts a
dependent one.
Summertime &
drowning.
51. A leading, causal metric
is a superpower.
h"p://www.flickr.com/photos/bloke_with_camera/401812833/sizes/o/in/photostream/
52. Is social action a leading
indicator of donation?
http://blog.justgiving.com/nine-reasons-why-social-and-mobile-are-the-future-of-fundraising/
55. A Facebook user reaching 7 friends within 10 days of signing up
(Chamath Palihapitiya)
If someone comes back to Zynga a day after signing up for a game,
they’ll probably become an engaged, paying user (Nabeel Hyatt)
A Dropbox user who puts at least one file in one folder on one device
(ChenLi Wang)
Twitter user following a certain number of people, and a certain
percentage of those people following the user back (Josh Elman)
A LinkedIn user getting to X connections in Y days (Elliot Schmukler)
Some examples
(From the 2012 Growth Hacking conference. http://growthhackersconference.com/)
62. Aunshul Rege of Rutgers University, USA in 2009
Experienced scammers expect a “strike rate” of 1 or 2 replies per 1,000 messages
emailed; they expect to land 2 or 3 “Mugu” (fools) each week.
One scammer boasted “When you get a reply it’s 70% sure you’ll get the money”
“By sending an email that repels all but the most gullible,” says [Microsoft Researcher
Corman] Herley, “the scammer gets the most promising marks to self-select, and tilts
the true to false positive ratio in his favor.”
1000 emails
1-2 responses
1 fool and their money, parted.
Bad language (0.1% conversion)
Gullible (70% conversion)
1000 emails
100 responses
1 fool and their money, parted.
Good language (10% conversion)
Not-gullible (.07% conversion)
This would be horribly
inefficient since
humans are involved.
63. Turns out the word “Nigeria” is the best
way to identify promising prospects.
66. “It can scarcely be denied
that the supreme goal of all theory is
to make the irreducible basic elements
as simple and as few as possible without
having to surrender the adequate
representation of a single datum of
experience.”
http://media.photobucket.com/image/einstein/derekabril/einstein_010.png
67. “As simple as possible,
but no simpler.”
*(FYI, this is irony.)
69. Eric’s three engines of growth
Virality
Make people
invite friends.
How many they
tell, how fast they
tell them.
Price
Spend money to
get customers.
Customers are
worth more than
they cost.
Stickiness
Keep people
coming back.
Approach
Get customers
faster than you
lose them.
Math that
matters
70. Dave’s Pirate Metrics
AARRR
Acquisition
How do your users become aware of you?
SEO, SEM, widgets, email, PR, campaigns, blogs ...
Activation
Do drive-by visitors subscribe, use, etc?
Features, design, tone, compensation, affirmation ...
Retention
Does a one-time user become engaged?
Notifications, alerts, reminders, emails, updates...
Revenue
Do you make money from user activity?
Transactions, clicks, subscriptions, DLC, analytics...
Referral
Do users promote your product?
Email, widgets, campaigns, likes, RTs, affiliates...
71. Stage
EMPATHY
I’ve found a real, poorly-met need that a
reachable market faces.
STICKINESS
I’ve figured out how to solve the problem in a
way they will keep using and pay for.
VIRALITY
I’ve found ways to get them to tell their friends,
either intrinsically or through incentives.
REVENUE
The users and features fuel growth organically
and artificially.
SCALE
I’ve found a sustainable, scalable business with
the right margins in a healthy ecosystem.
Gate
Thefivestages
80. Put this all together
Metric/Assumption Value
Population of Canada 34.88M
Mobile phone percentage 80%
Mobile phones in Canada 27,904M
IOS percentage 15.5%
IOS phones in Canada 4.32M
IOS devices per account 3.1*
IOS accounts we can sell to in Canada
(this is our Total Addressable Market)
1.39M
* I made this up. Don’t believe everything you read.
81. How much is the TAM worth?
Metric/Assumption Value
TAM 1.39M
Percent we will claim 5%
Number of users 69,500
User lifetime 40 months
Revenue per month $5 per month
CLV $200
Expected total revenues $13.9M
* I made this up. Don’t believe everything you read.
83. Bottoms-up
Metric/Assumption Value
Impressions (acquisition) 9,266,667
Percent that install 10%
Installs (activation) 926,667
Percent still using after 30 days 25%
Become regular users (retention) 231,667
Percent that buy 30%
Buy premium version (revenue) 69,500
Percent that churn each month 2.5%
Customer lifespan 40
Revenue per month 5
Customer lifetime value 200
TAM value $13,900,000
84. Reality check
Bottoms-up (TAM) Value
Impressions (acquisition) 9.3 M impressions
Top-down (TAM) Value
IOS accounts we can sell to in Canada
(this is our Total Addressable Market) 1.39 M users in Canada
You Shall Not Pass.
85. Six business model archetypes.
E-commerce SaaS Media
Mobile
app
User-gen
content
2-sided
market
The business you’re in
86. Can you move enough
customers through this
cycle to make more money
than you spend?
Make them
refer others
Retain them
Get revenue from them
Acquire
customers
Activate them
http://www.slideshare.net/dmc500hats/startup-metrics-for-pirates-long-version
87. (Which means eye
charts like these.)
Customer Acquisition Cost
paid direct search wom
inherent
virality
VISITOR
Freemium/trial offer
Enrollment
User
Disengaged User
Cancel
Freemium
churn
Engaged User
Free user
disengagement
Reactivate
Cancel
Trial abandonment
rate
Invite Others
Paying Customer
Reactivation
rate
Paid
conversion
FORMER USERS
User Lifetime Value
Reactivate
FORMER CUSTOMERS
Customer Lifetime Value
Viral coefficient
Viral rate
Resolution
Support data
Account Cancelled Billing Info Exp.
Paid Churn Rate
Tiering
Capacity Limit
Upselling
rate Upselling
Disengaged DissatisfiedTrial Over
88. Model + Stage = One Metric That Matters.
One Metric
That Matters.
The business you’re in
E-Com SaaS Mobile 2-Sided Media UCG
Empathy
Stickiness
Virality
Revenue
Scale
Thestageyou’reat
94. Moz cuts down on metrics
SaaS-based SEO toolkit in the scale stage. Focused on net adds.
Was a marketing campaign successful?
Were customer complaints lowered?
Was a product upgrade valuable?
Net adds up:
Can we acquire more valuable customers?
What product features can increase engagement?
Can we improve customer support?
Net adds flat:
Are the new customers not the right segment?
Did a marketing campaign fail?
Did a product upgrade fail somehow?
Is customer support falling apart?
Net adds down:
95. Metrics are like squeeze toys.
http://www.flickr.com/photos/connortarter/4791605202/
96. Empathy
Stickiness
Virality
Revenue
Scale
E-
commerce
SaaS Media
Mobile
app
User-gen
content
2-sided
market
Interviews; qualitative results; quantitative scoring; surveys
Loyalty,
conversion
CAC, shares,
reactivation
Transaction,
CLV
Affiliates,
white-label
Engagement,
churn
Inherent
virality, CAC
Upselling,
CAC, CLV
API, magic #,
mktplace
Content,
spam
Invites,
sharing
Ads,
donations
Analytics,
user data
Inventory,
listings
SEM, sharing
Transactions,
commission
Other
verticals
(Money from transactions)
Downloads,
churn, virality
WoM, app
ratings, CAC
CLV,
ARPDAU
Spinoffs,
publishers
(Money from active users)
Traffic, visits,
returns
Content
virality, SEM
CPE, affiliate
%, eyeballs
Syndication,
licenses
(Money from ad clicks)
101. Baseline:
5-7% growth a week
“A good growth rate during YC
is 5-7% a week,” he says. “If
you can hit 10% a week you're
doing exceptionally well. If you
can only manage 1%, it's a sign
you haven't yet figured out
what you're doing.” At revenue
stage, measure growth in
revenue. Before that, measure
growth in active users.
Paul Graham, Y Combinator
• Are there enough people who really care
enough to sustain a 5% growth rate?
• Don’t strive for a 5% growth at the expense
of really understanding your customers
and building a meaningful solution
• Once you’re a pre-revenue startup at or
near product/market fit, you should have
5% growth of active users each week
• Once you’re generating revenues, they
should grow at 5% a week
102. It’s oxygen
You need customers to keep learning
It’s a substitute for solvency
PhotobyPaulMilleronFlickr.https://www.flickr.com/photos/94674772@N03/8788576498
103. Baseline:
10% visitor engagement/day
Fred Wilson’s social ratios
30% of users/month use web or mobile app
10% of users/day use web or mobile app
1% of users/day use it concurrently
104. Baseline:
2-5% monthly churn
• The best SaaS get 1.5% - 3% a month. They have multiple Ph.D’s
on the job.
• Get below a 5% monthly churn rate before you know you’ve got a
business that’s ready to grow (Mark MacLeod) and around 2%
before you really step on the gas (David Skok)
• Last-ditch appeals and reactivation can have a big impact.
Facebook’s “don’t leave” reduces attrition by 7%.
105. Baseline:
Calculating customer lifetime
25%
monthly churn
100/25=4
The average
customer lasts
4 months
5%
monthly churn
100/5=20
The average
customer lasts
20 months
2%
monthly churn
100/2=50
The average
customer lasts
50 months
106. Baseline:
CAC under 1/3 of CLV
• CLV is wrong. CAC Is probably wrong, too.
• Time kills all plans: It’ll take a long time to find
out whether your churn and revenue projections
are right
• Cashflow: You’re basically “loaning” the
customer money between acquisition and CLV.
• It keeps you honest: Limiting yourself to a
CAC of only a third of your CLV will forces you
to verify costs sooner.
Lifetime of 20 mo.
$30/mo. per
customer
$600 CLV
$200 CAC
Now segment
those users!
1/3 spend
107. Who is worth more?
Today
A
Lifetime:
$200
Roberto Medri, Etsy
B
Lifetime:
$200
Visits
109. Draw a new line
Pivot or
give up
Try again
Success!
Did we move the
needle?
Measure
the results
Make changes
in production
Design a test
Hypothesis
With data:
find a
commonality
Without data:
make a good
guess
Find a potential
improvement
Draw a linePick a KPI
110. The minimum needed to
test the core idea
Survey owner adds recipient to group
Survey owner asks question
Recipient reads survey question
Recipient responds to question
Recipient sees survey results
(Later, if needed…)
Recipient visits site; no password!
Recipient does password recovery
One-time link sent to email
Recipient creates password
Recipient can edit profile, etc.
Survey owner adds recipient to group
Survey owner asks question
Recipient gets invite
Recipient reads survey question
Recipient responds to question
Recipient installs mobile app
Recipient creates account, profile
Recipient sees survey results
Recipient can edit profile, etc.
10-25%RESPONSERATE
70-90%RESPONSERATE
111. Do AirBnB hosts
get more business
if their property is
professionally
photographed?
112. Gut instinct (hypothesis)
Professional photography helps AirBnB’s business
Candidate solution (MVP)
20 field photographers posing as employees
Measure the results
Compare photographed listings to a control group
Make a decision
Launch photography as a new feature for all hosts
116. Draw a new line
Pivot or
give up
Try again
Success!
Did we move the
needle?
Measure
the results
Make changes
in production
Design a test
Hypothesis
With data:
find a
commonality
Without data:
make a good
guess
Find a potential
improvement
Draw a linePick a KPI
117. “Gee, those
houses that do
well look really
nice.”
Maybe it’s the
camera.
“Computer: What
do all the
highly rented
houses have in
common?”
Camera model.
With data:
find a commonality
Without data: make a
good guess
118. Circle of Moms: Not enough engagement
• Too few people were
actually using the
product
• Less than 20% of any
circles had any activity
after their initial creation
• A few million monthly
uniques from 10M
registered users, but no
sustained traction
• They found moms were far more engaged
• Their messages to one another were on average 50% longer
• They were 115% more likely to attach a picture to a post they wrote
• They were 110% more likely to engage in a threaded (i.e. deep)
conversation
• Circle owners’ friends were 50% more likely to engage with the circle
• They were 75% more likely to click on Facebook notifications
• They were 180% more likely to click on Facebook news feed items
• They were 60% more likely to accept invitations to the app
• Pivoted to the new market, including a name change
• By late 2009, 4.5M users and strong engagement
• Sold to Sugar, inc. in early 2012
119. Landing page design A/B testing
Cohort analysis General analytics
URL shortening
Funnel analytics
Influencer Marketing
Publisher analytics
SaaS analytics
Gaming analytics
User interaction Customer satisfaction KPI dashboardsUser segmentation
User analytics Spying on users
123. mikemace.com
The slow
death of
a market
leader.
Revenue over time
This is what most
managers track.
Note that sales keep
rising (making you
feel safe) until you
run off the edge of
the cliff.
“Let’s cut
prices to
accelerate
our growth.”
“Time to enter
the mainstream.
Cut prices.”
“We may miss the quarter.
Let’s do a price promotion.”
“That wasn’t
supposed to
happen. We’ll
have to lay
some people
off.
Gross margin
percent
Declining profit
per unit (gross
margin) is actually
your best signal of
trouble.
The adoption curve
Here’s where you
actually are, but you
don’t know it
because you can’t
draw the curve until
after the market
saturates.
Early
adopters
Late
adopters
124. In other words, if your job is change you
have your work cut out for you.
126. Clay Christensen, The Innovator’s Dilemma
CostperMB
$1000
$100
$10
$1
Time
14”
M
ainfram
e
8”
M
inicom
puter
5.25”
Desktop
3.5”
N
otebook
127. Technologies
outstrip what
the market
needs, driven
by feedback
from the
“best”
current
customer.
Clay Christensen, The Innovator’s Dilemma
$1000
$100
$10
$1
Time
8” 5.25”
High end
customer
Low end
customer
128. The new
market has
different criteria
for success,
which are
uninteresting to
incumbents.
Clay Christensen, The Innovator’s Dilemma
$1000
$100
$10
$1
Time
Storage
capacity
Portability
132. Times a song in “heavy
rotation” is played daily
2007 2012
266
133. This alone explains the collapse of
modern print media.
Circulation, annually Clicks, instantaneously
Letters to the editor, weekly Hashtags, always
134. Why now?
Second: It’s no longer about whether
you can build it—it’s about whether
anyone will care.
135. The Attention Economy
“What information consumes
is rather obvious: it consumes
the attention of its recipients.
Hence a wealth of information
creates a poverty of attention, and a
need to allocate that attention efficiently
among the overabundance of
information sources that might
consume it.”
(Computers, Communications and the Public Interest, pages 40-41,
Martin Greenberger, ed., The Johns Hopkins Press, 1971.)Herbert Simon
141. An economic order quantity
of one.
Crafted
Mass-
produced
Automated Digital
Quantity Few Many Some One
Cost High Low Medium Free
Lead time Small Large Medium None
Self-service Medium None Some Lots
Customization High None Some Lots
• Cloud computing
• Social media
• 3D printing
• Per-customer
analysis
• Mobile tracking
• Etc...
This is why
software is
eating the
world.
142. Sustainable competitive advantage allows for
inertia and power to build up along the lines of
an existing business model, which will soon die.
Instead, seek transient competitive
advantage.
Rita Gunther McGrath, The End of Competitive Advantage
143. Scale is now a liability. Compete on
cycle time.
154. The problem was framing:
Blockbuster thought it was in the video
store management business. Netflix
realized it was in the entertainment
delivery business.
168. When you’re a startup
your goal is to find a sustainable,
repeatable business model.
When you’re a big company
your goal is to perpetuate one.
169. Intrapreneur:
Someone working to produce
disruptive change in an organization
that has already found a sustainable,
repeatable business model.
170. Business model vs.
company stage
Company size/age
Early stage Big/incumbent
B2B
Target
market
B2C
LessWoM
Moreformaldecisions
Slower cycle time
More legacy constraints
It is way too easy to
mix these up.
Intrapreneurs
171. In a startup, the purpose of analytics is
to iterate to product/market fit
before the money runs out.
172. In a big company,
analytics replaces opinion with fact.
173. Companies that use data-driven
analytics instead of intuition have
5%-6% higher productivity and
profits than competitors.
Brynjolfsson, Erik, Lorin Hitt, and Heekyung Kim. "Strength in Numbers: How Does Data-Driven
Decisionmaking Affect Firm Performance?." Available at SSRN 1819486 (2011).
2011 MIT study of 179 large publicly traded firms
174. The fundamental shift from Big Data
Ask
question
Define
schema
Collect
data
Answer
question
Refine
problem
Collect
data
Ask
question
Emergent
schema
Explore
data
Answer
question
“Collect first; ask questions later.”
175. Three kinds of innovation
Sustain/core
(optimizing for more of the same)
Innovate/adjacent
(introduce nearby product,
market, or method)
Disrupt/transformative
(Fundamentally changing
the business model)
Improve along
current metrics...
...or alter
the rate of
improvement
Switch to a new
value model
Change the business
model entirely
176. Many models for enterprise innovation
Core Adjacent Transformative
Do the same
thing better.
Nearby product,
market, or method.
Start something
entirely new.
Regional
optimizations.
Innovation, go-to-
market strategies.
Reinvent the
business model.
• Get there faster
• Smaller batches
• Solution, then testing
• Increased accountability
• Customer development
• Test similar cases
• Parallel deployment
• Analytics & cycle time
• Fail fast
• Skunkworks/R&D
• Focus on the search
• Ignore the current
model & margins
177. Another way to look at it
Core Adjacent Transformative
Know the problem
(customers tell you it)
Know the solution
(customers/regulations/
norms dictate it.)
Know the problem
(market analysis)
Don’t know the solution
(non-obvious innovation
confers competitive
advantage.)
Don’t know the problem
(just an emerging need/
change)
Don’t know the solution.
Waterfall:
Execution
matters
Agile/scrum:
Iteration
matters
Lean Startup:
Discovery
matters
182. “Efficiency is tied to
analytics. We’ll still look
for new materials, or for
the physics of devices,
but the analytics ... is
what’s really untapped.”
184. Improvement Adjacency Remodeling
Do the same,
only better.
Explore what’s
nearby quickly
Try out new
business models
Lean approaches apply, but the metrics vary widely.
Sustain/
core
Innovate/
adjacent
Disrupt/
transformative
186. Sustaining
innovation
is about
more of
the same.
(says Sergio Zyman)
More things
To more people
For more money
More often
More efficiently
Supply chain optimization
Per-transaction cost reduction
Loyal customer base that returns
Demand prediction, notification
Maximum shopping cart
Price skimming/tiering
Highly viral offering
Low incremental order costs
Inventory increase
Gifting, wish lists
187. Blizzard extends the
lifespan of WOW
Early
adopters
Rapid
growth
Market
saturation
The infamous S-curve
(Product lifecycle, Bass diffusion curve, etc.)
189. Blizzard extends the
lifespan of WOW
Fixing this: sustaining growth with novelty
Product & market innovation
(“New & improved!”)
190. Blizzard extends the
lifespan of WOW
WOW
Burning
Crusade
Wrath of
the Lich King
Mists of
PandariaCataclysm
Warlords of
Draenor
191. Most of your
innovation will
be adjacent or
sustaining.
Question marks!
(low market share,
high growth rate)
May be the next big thing.
Consumes investment, but
will require money to
increase market share.
Stars!
(high growth rate,
high market share)
What everyone wants. As
market invariably stops
growing, should become
cash cows.
Dogs!
(low market share,
low growth rate)
Barely breaks even, may
be a distraction from better
opportunities. Sell off or
shut down.
Cash cows!
(high market share,
low growth rate)
Boring sources of cash, to
be milked but not worth
additional investment.
Growthrate
Market share
Pivot to
increase
market
share
through
virality,
attention
Pivot to
increase growth
rate through
disruption
Pivot to
redefine problem/
solution through
empathy
Milk with
revenue
optimization as
growth slows
If you don’t like
this, go launch
a startup.
192. Software, experimentation, and
iterative cycles of learning help you
get to the local maximum better and
faster. That’s a good thing.
But it’s not the only thing.
193. Adjacent innovation is about changing
one part of the model in a way that
alters the value network.
194. Amazon Web Services and the
server value network
Server computing
• Density
• Heat
• GHz
• MIPS
Cloud computing
• Instances
• Objects
• Spinup time
• Scaleout
Capex, financing,
TCO, ROI
Opex, demand, time
to result
CIO, enterprise IT CTO, coder, app owner,
line of business, startup
Value
criteria
Money
Buyer
196. Selling the same product to an
adjacent market in the same
way.
Of P&G’s 38 brands, only 19 were sold in Asia as of 2011
Market expansion is seldom selling the same thing to new people. In
Asia, P&G needed to
Align pricing with novelty (prestige, mass-tige, over-the-counter)
Change consumer expectations (moving from dilutes to
concentrates)
Adjust positioning and ingredients such as white fungus, ginseng,
and the parasitic cordyceps
197. Selling the same product to the same
market in a new way.
The biggest innovation in
logistics of the 20th century.
http://www.flickr.com/photos/photohome_uk/1494590209
198. Changing the method of
C2C classifieds
A blend of who, what, how
Classified C2C sales (same
“what”)
Strictly for Japanese women
(targeted “how”)
New how (phone is capture,
display, payment, transaction)
Did 100 interviews w/target
users before launch
Key insight: Japanese women
sell their entire wardrobe
twice in their lives
5,000 and 10,000 sales in first
month
10% commission fee
Average price of items is
pretty low, at around 2,000 to
3,000 yen (or $22 to $34)
Not an auction: seller decides
price
Mobile-only model
Phone is payment, storefront,
and even a way for sellers to
build their catalog
http://www.sffashtech.com/2012/10/10/a-free-market-fashion-app-exclusively-for-women-japan/
205. Significant market
850K full-time law enforcement officers in the
US; 700K state/local; 525K patrol officers
130M incident reports/y. 70M new incidents;
200K involve use of force
Only 31% of local police agencies keep
computer files on use-of-force incidents
Strong product benefits
Exonerates the officer 96% of the time.
47% percent increase in charges and
summons (2007)
Patrol officers spend 15-25% of their time
writing incident reports, recorded evidence
reduces this by 22%, meaning 50m more on
patrol
Challenges
New business model
Pricing unclear
SaaS offering
Compliance and governance
Unions, regulation, chain of evidence
Changing the current model (radio is
everything)
Transformative incubation:
Taser evidence.com
206. Part four:
What works for large companies
(A bagful of tricks from agitators in companies of all sizes.)
207. The job of an intrapreneur is to
identify an adjacent market, product,
or method that conforms to
organizational filters.
It is not to improve the current
product, market, or method.
208. Also: a pariah.
Successful innovators share certain attributes.
Bad listener: Wilfully ignore feedback from your best customers.
Cannibal: If successful, destroying existing revenue streams.
Job killer: Automation & lower margins are your favorite tools.
Security risk: Advocate of transparency, open data, communities.
Narcissist: Worry constantly about how you’ll get attention.
Slum lord: Sell to those with less money, deviants, and weirdos.
209. Know what
kind of
innovation
you’re
after.
New
Current
Current New
Market
Product
Penetrate:
Increase revenues,
market share, product
quality, brand
differentiation.
Marketing.
Market development:
Sell existing products
to new markets,
segments, uses.
Export & license.
Product
development:
Invent new products
for your market. R&D,
enhancements.
Acquisition.
Startup:
New products for new
markets. New rules,
business units,
organizational
structure. Innovation.
Based on H. Igor Ansoff’s matrix
Increased
risk
of political fallout (and
great success!)
210. Innovation portfolios at big companies
Core Adjacent Transformative
70% 20% 10%
Investment
70%20%10%
Return
211. Use outliers and missed searches to
hunt for good ideas & adjacencies
(Multi-billion-dollar hygiene product company)
1/8 men have an incontinence issue. 1/3
women do.
When search results show a significant
number of men searching, this suggests the
adjacent (male) market is underserved.
212. Frame it like a study
Product creation is almost
accidental.
Unlike a VC or startup, when
the initiative fails the
organization still learns.
http://www.flickr.com/photos/creative_tools/8544475139
213. When in doubt, collect data
From tackling the FTA rate to
visualizing the criminal justice
supply chain.
214. Use data to create a taste for
data
Sitting on Billions of rows of
transactional data
David Boyle ran 1M online surveys
Once the value was obvious to
management, got license to dig.
215. 4” e-ink display with
name and specialty.
Badge scans barcode and
gets specs; checks
inventory; enters data on a
touch screen.
Smart Badge
Today: Workers see their own
productivity.
Coming soon: comparing
yourself to 400,000 other
employees.
Ultimately: Learning what
(and who) works well.
Data Exhaust
Tesco connects
its workforce
222. Run it as a consulting business first.
(Just don’t get addicted to it. Your goal is to
learn and overcome integration challenges and
find the 20% of features that 80% of the market
will pay for.)
223. Convince your boss she asked for this
Draw a new line
Pivot or
give up
Try again
Success!
Did we move
the needle?
Measure
the results
Make changes
in production
Design a test
Hypothesis
With data:
find a
commonality
Without
data: make a
good guess
Find a
potential
improvement
Draw a line
in the sand
Pick a KPI
224. Focus on the desired behavior, not just
the information.
http://www.psychologytoday.com/blog/yes/
200808/changing-minds-and-changing-towels
26% increase in towel
re-use with an appeal
to social norms; 33%
increase when tied to
the specific room.
Energy Conservation “Nudges” and Environmentalist
Ideology: Evidence from a Randomized Residential Electricity
Field Experiment - Costa & Kahn 2011
The effectiveness of energy
conservation “nudges” depends on
an individual’s political ideology ...
Conservatives who learn that their
consumption is less than their
neighbors’ “boomerang” whereas
liberals reduce their consumption.
228. Twitter’s 140-character
limit isn’t arbitrary. It’s
constrained by the size
of SMS (160
characters) and
username (20
characters.)
http://i.i.cbsi.com/cnwk.1d/i/tim/2011/11/18/
sms_screen_twitter_activity_stream_270x405.png
229. Figure out how to translate it back to a
simple model that fits the company’s
existing value model.
If your company dies, this is why.
230. Software
Platform
Merchandising
User-generated content
Marketplace
Media/content
Service
Oracle’s accounting suite
Amazon’s EC2 cloud
Thinkgeek’s retail store
Facebook’s status update
AirBnB’s list of house rentals
CNN’s news page
A hairstylist
Product
type
What the startup does in
return. May be a product
or service; may be
hardware or software;
may be a mixture.
One-time transaction
Recurring subscription
Consumption charges
Advertising clicks
Re-sale of user data
Donation
Single purchase from Fab
Monthly charge from Freshbooks
Compute cycles from Rackspace
PPC revenue on CNET.com
Twitter’s firehose license
Wikipedia’s annual campaign
Revenue
model
How the startup extracts
money from its visitors,
users, or customers.
Paid advertising
Search Engine Mgmt.
Social media outreach
Inherent virality
Artificial virality
Affiliate marketing
Public relations
App/ecosystem mkt.
Banner on Informationweek.com
High pagerank for ELC in kid’s toys
Active on Twitter i.e. Kissmetrics
Inviting team member to Asana
Rewarding Dropbox user for others’ signups
Sharing a % of sales with a referring blogger
Speaker submission to SXSW
Placement in the Android market
Acquisition
channel
How the visitor,
customer, or user finds
out about the startup.
Hosted service
Digital delivery
Physical delivery
Salesforce.com’s CRM
Valve purchase of desktop game
Knife shipped from Sur La Table
Delivery
model
How the product gets to
the customer.
Simple purchase
Discounts & incentives
Free trial
Freemium
Pay for privacy
Free-to-play
Buying a PC on Dell.com
Black Friday discount, loss leader, free ship
Time-limited trial such as fitbit Premium
Free tier, relying on upgrades, like Evernote
Free account content is public, like Slideshare
Monetize in-app purchases, like Airmech
Selling
tactic
What the startup does to
convince the visitor or
user to become a paying
customer.
232. Use the right proxies for B2B products
Stage Startup metrics Intrapreneur metrics
Empathy
Customers interviewed (needs &
solutions), assumptions quantified, TAM,
monetization possibility
Non-customers interviewed; assumptions
quantified, constraints identified, TAM,
disruption potential
Stickiness Churn, engagement
Support tickets, integration time, call
center data, delays
Virality Viral coefficient, viral cycle time
Net Promoter Score, referrals, case study
willingness
Revenue Attention, engagement
Billable activity; signed LOIs; pilot
programs; after-development profitability
Scale Automation Contribution, training costs, licensing
233. Tomorrow’s company: Running parallel businesses
Innovation Sustaining/core Adjacent
Transformative/
disruptive
Core action
Optimizing/
improving
Experimenting
Searching/
inventing
Focus on Known metrics Risk removal
Assumption
validation
Which will live
Within current
business unit
Incubated, then
integrated
As new/separate
entities
Problem is Known Known Unknown
Solution is Known Unknown Unknown
235. I need a carA.
I should buy
a car
B.
It should be
a hybridC.
I should buy
a Honda CivicD.
Everyone in the world
236. People who want to drive
Prospective car buyers
People looking for a hybrid
Honda Civic Hybrid owners
I need a carA.
I should buy
a car
B.
It should be
a hybridC.
I should buy
a Honda CivicD.
Everyone in the world
237. “Isn’t it time you got out of the
city?” campaign showing how cars
make nature accessible & ridiculing
urban hipsters.
Ads showing how cars are needed
any time (pregnancy, errands, urgent
business) and how a car is a
“personal assistant.”
Urgency (“every time you drive a
non-hybrid car you kill the planet a
little”) and testimonials from buyers
who’ve saved money.
Honda branding ads and model-
specific promotions.
Follow-up satisfaction campaign to
encourage buyers to tell their friends
People who want to drive
“I need a vehicle to get
around, be productive, and
enjoy my life.”
Prospective car buyers
“I want to own a car because it’s
convenient; it’s a personal
relationship; I don’t trust others.”
People looking for a hybrid
“I want to save money and fuel. I
also care about the environment
and want to be seen as ‘green’.”
Honda Civic Hybrid owners
I need a carA.
I should buy
a car
B.
It should be
a hybridC.
I should buy
a Honda CivicD.
Everyone in the world
238. People who want to drive
“I need a vehicle to get
around, be productive, and
enjoy my life.”
Prospective car buyers
“I want to own a car because it’s
convenient; it’s a personal
relationship; I don’t trust others.”
People looking for a hybrid
“I want to save money and fuel. I
also care about the environment
and want to be seen as ‘green’.”
Honda Civic Hybrid owners
Those who don’t need cars
• I’m too young to drive
• I’m too old to drive
• I can walk or take public
transit
Car users who won’t buy
• It’s too expensive for me
• I will use a shared car service
• It’ll get stolen
Those who won’t buy hybrids
• Hybrids are gutless
• Batteries are toxic & explosive
• In the end it costs more than
it saves
I will buy another brand
• I buy domestic
• I’ve always driven a VW
• Toyotas are reliable
• I want something prestigious
I need a carA.
I should buy
a car
B.
It should be
a hybridC.
I should buy
a Honda CivicD.
Everyone in the world
239. People who want to drive
“I need a vehicle to get
around, be productive, and
enjoy my life.”
Prospective car buyers
“I want to own a car because it’s
convenient; it’s a personal
relationship; I don’t trust others.”
People looking for a hybrid
“I want to save money and fuel. I
also care about the environment
and want to be seen as ‘green’.”
Honda Civic Hybrid owners
Those who don’t need cars
• I’m too young to drive
• I’m too old to drive
• I can walk or take public
transit
Car users who won’t buy
• It’s too expensive for me
• I will use a shared car service
• It’ll get stolen
Those who won’t buy hybrids
• Hybrids are gutless
• Batteries are toxic & explosive
• In the end it costs more than
it saves
I will buy another brand
• I buy domestic
• I’ve always driven a VW
• Toyotas are reliable
• I want something prestigious
Sponsor a driving school
“Give the gift of driving”
campaign for grandparents.
Financing, cashback
Sell to carshares;
underscore their limitations
PR on dangers of commuting,
pedestrian deaths
Theft warranty, tracking
services, high-end locks
Independent tests,
standard metrics (0-60 in X)
Lab research, studies
ROI calculator;
replacement programs
Prove Honda hires US workers
“Time to leave Germany” ads
Spontaneous accel. stories
Premium brand (Acura)
I need a carA.
I should buy
a car
B.
It should be
a hybridC.
I should buy
a Honda CivicD.
Everyone in the world
240. “Isn’t it time you got out of the
city?” campaign showing how cars
make nature accessible & ridiculing
urban hipsters.
Ads showing how cars are needed
any time (pregnancy, errands, urgent
business) and how a car is a
“personal assistant.”
Urgency (“every time you drive a
non-hybrid car you kill the planet a
little”) and testimonials from buyers
who’ve saved money.
Honda branding ads and model-
specific promotions.
Follow-up satisfaction campaign to
encourage buyers to tell their friends
People who want to drive
“I need a vehicle to get
around, be productive, and
enjoy my life.”
Prospective car buyers
“I want to own a car because it’s
convenient; it’s a personal
relationship; I don’t trust others.”
People looking for a hybrid
“I want to save money and fuel. I
also care about the environment
and want to be seen as ‘green’.”
Honda Civic Hybrid owners
Those who don’t need cars
• I’m too young to drive
• I’m too old to drive
• I can walk or take public
transit
Car users who won’t buy
• It’s too expensive for me
• I will use a shared car service
• It’ll get stolen
Those who won’t buy hybrids
• Hybrids are gutless
• Batteries are toxic & explosive
• In the end it costs more than
it saves
I will buy another brand
• I buy domestic
• I’ve always driven a VW
• Toyotas are reliable
• I want something prestigious
Sponsor a driving school
“Give the gift of driving”
campaign for grandparents.
Financing, cashback
Sell to carshares;
underscore their limitations
PR on dangers of commuting,
pedestrian deaths
Theft warranty, tracking
services, high-end locks
Independent tests,
standard metrics (0-60 in X)
Lab research, studies
ROI calculator;
replacement programs
Prove Honda hires US workers
“Time to leave Germany” ads
Spontaneous accel. stories
Premium brand (Acura)
I need a carA.
I should buy
a car
B.
It should be
a hybridC.
I should buy
a Honda CivicD.
Everyone in the world
241. Hits
A metric from the early, foolish days of the Web.
Count people instead.
Page views
Marginally better than hits. Unless you’re displaying
ad inventory, count people.
Visits
Is this one person visiting a hundred times, or are a
hundred people visiting once? Fail.
Unique visitors
This tells you nothing about what they did, why they
stuck around, or if they left.
Followers/friends/
likes
Count actions instead. Find out how many followers
will do your bidding.
Time on site, or
pages/visit
Poor version of engagement. Lots of time spent on
support pages is actually a bad sign.
Emails collected
How many recipients will act on what’s in them?
Number of
downloads
Outside app stores, downloads alone don’t lead to
lifetime value. Measure activations/active accounts.
242. Example: a restaurant
• Empathy: Before opening, the owner first learns about the diners in its area, their
desires, what foods aren’t available, and trends in eating.
• Stickiness: Then he develops a menu and tests it out with consumers, making
frequent adjustments until tables are full and patrons return regularly. He’s giving
things away, testing things, asking diners what they think. Costs are high because
of variance and uncertain inventory.
• Virality: He starts loyalty programs to bring frequent diners back, or to encourage
people to share with their friends. He engages on Yelp and Foursquare.
• Revenue: With virality kicked off, he works on margins—fewer free meals, tighter
controls on costs, more standardization.
• Scale: Finally, knowing he can run a profitable business, he pours some of the
revenues into marketing and promotion. He reaches out to food reviewers, travel
magazines, and radio stations. He launches a second restaurant, or a franchise
based on the initial one.
243. Example: a software company
• Empathy: The founder finds an unmet need, often because she has a background in a particular
industry or has worked with existing solutions that are being disrupted.
• Stickiness: She meets with an initial group of prospects, and signs contracts that look more like
consulting agreements, which she uses to build an initial product. She’s careful not to commit to
exclusivity, and tries to steer customers towards standardized solutions, charging heavily for
custom features. She supports the customers directly from the engineering team until the product
is stable and usable.
• Virality: Product in hand, she asks for references from satisfied customers, and uses them as
testimonials. She starts direct sales, and grows the customer base. She launches a user group,
and starts to automate support. She releases an API, encouraging third-party development and
scaling potential market size without direct development.
• Revenue: She focuses on growing the pipeline, sales margins, and revenues while controlling
costs. Tasks are automated, outsourced, or offshored. Feature enhancements are scored based on
anticipated payoff and development cost. Recurring license and support revenue becomes an
increasingly large component of overall revenues.
• Scale: She signs deals with large distributors, and works with global consulting firms to have them
deploy and integrate her tool. She attends trade shows to collect leads, carefully measuring cost of
acquisition against close rate and lead value.
245. How to avoid leading the witness
Don’t tip your hand
Avoid biased wording, preconceptions,
or a giveaway appearance. Word your
surveys carefully to be neutral.
Make the question real
Get them to purchase. Ask them to pay. Demand real introductions. Or ask them “how
many of your friends would say X” to avoid self-effacement
Keep digging
Ask “why” several times. Leave lingering, uncomfortable pauses in the conversation and let
them fill them.
Look for other clues
Have a colleague make notes of when they react, or of their body language.
246. Mobile app model:
Localmind hacks Twitter
• Stage: Empathy
• Model: UGC/mobile
• Real-time question and answer platform tied to locations.
• Needed to find out if a core behavior—answering questions about a place—
happened enough to make the business real
247. Localmind hacks Twitter
• Before writing a line of code, Localmind was concerned that people would never
answer questions.
• This was their biggest risk: if questions went unanswered users would have a
terrible experience and stop using Localmind.
• Ran an experiment on Twitter
• Tracked geolocated tweets in Times Square
• Sent @ messages to people who had just tweeted, asking questions about the
area: how busy is it; is the subway running on time; is something open; etc.
• The response rate to their tweeted questions was very high.
• Good enough proxy to de-risk the solution, and convince the team and
investors that it was worth building Localmind.
248. Creating an answers-at-scale campaign
• Know why you’re doing a survey in the first place
Ask what existing
brands come to
mind in an industry
Market alongside
them? Address
competitors?
Choose partners?
Ask how customers
try to find a product
or service
Help you plan
marketing
campaigns and
choice of media
Ask what kind of
money people
spend on a problem
Shape your pricing
strategy
Test which tagline or
unique value
proposition
resonates best with
customers
Choose the
winning one, or just
take that as advice
249. Creating an answers-at-scale campaign
• Know why you’re doing a survey in the first place
• Design the survey Demographic
segmentation
questions
Quantifiable
answers to your
research problem
Qualitative, open-
ended feedback
250. Creating an answers-at-scale campaign
• Know why you’re doing a survey in the first place
• Design the survey
• Test it (you’ll always have mistakes)
251. • Know why you’re doing a survey in the first place
• Design the survey
• Test it (you’ll always have mistakes)
• Send it out
Audience plea
Creating an answers-at-scale campaign
Via your NW To a paid list As an ad campaign
Beware of
respondent bias,
misrepresentation of
the larger market
Beware of
spamminess, low
open rates
Name the problem
Give the solution or
unique value
“Are you a single
mom? Take this brief
survey and help us
address a big
challenge.”
“Can’t sleep? We’re
trying to fix that, and
want your input.”)
“Our accounting
software automatically
finds tax breaks. Help
us plan the product
roadmap.”
252. Creating an answers-at-scale campaign
• Know why you’re doing a survey in the first place
• Design the survey
• Test it (you’ll always have mistakes)
• Send it out
• Collect the results
• Analyze the data
Were you able to capture the attention of the
market? Did they click on your ads and links?
Which ones worked best?
Are you on the right track? What decisions can
you now make with the data you’ve collected?
Will people try out your solution/product? How
many of your respondents were willing to be
contacted? How many agreed to join a forum or
a beta? How many asked for access in their
open-ended responses?
By
segment!
253. When it’s time to move on
• Have you conducted enough quality customer interviews to feel confident that
I’ve found a problem worth solving?
• Do you understand your customer well enough?
• Do you believe your solution will meet the needs of customers?
256. Days since last visit
1200
1000
800
600
400
200
0
1 2 3 4 5 6 7 8 9
Days since last engagement
January February
Disengaged
(>10 days)
25000
20000
15000
10000
5000
0
Numberofusers
257. When it’s time to move on
• Are people using the product as expected?
• Define an active user. What percentage of your users/customers is active?
Write this down. Could this be higher? What can you do to improve engagement?
• Evaluate your feature roadmap against the 7 questions to ask before building
more features. Does this change the priorities of feature development?
• Evaluate the complaints you’re getting from users. How does this impact
feature development going forward?
263. How to calculate it
• First calculate the invitation rate, which is the number of invites sent divided by the
number of users you have.
• Then calculate the acceptance rate, which is the number of signups or
enrollments divided by the number of invites.
• Then multiply the two together.
• Consider, for example
• Your 2,000 customers have sent out 5,000 invitations during their lifetime on
your site.
• Your invitation rate is 2.5.
• For every ten invitations received, one gets clicked.
• Your acceptance rate is 0.1.
• Multiply the two, and you have your viral coefficient: 0.25. Every customer you
add will add an addition 25% of a customer.
264. Virality stage:
Timehop’s content sharing
• Stage: Virality
• Model: Mobile app
• Social network around the past
• Focused on virality (but not necessarily the coefficient!)
265. The one metric that matters: content
sharing
• Focused on percent of daily active users that share their content
• Aiming for 20-30% of DAU sharing
“All that matters now is virality.
Everything else—be it press, publicity
stunts or something else—is like
pushing a rock up a mountain: it will
never scale. But being viral will.”
- Jonathan Wegener, co-founder
266. 3 kinds of virality
• Inherent virality is built into the product, and happens as a function of use.
• Artificial virality is forced, and often built into a reward system.
• Word of mouth virality is simply conversations generated by satisfied users.
267. Laid, paid, made, afraid
Who is your
audience?
Drive-by visitors vs. serious evaluators; loyal users vs.
one-time buyers; lurkers vs. contributors. Have one
audience.
What do you want
them to do?
Tell five friends; sign up for a year’s subscription; write
a blog post on your behalf; invest some money. Just
be clear.
Why should they do
it?
Drive-by visitors versus serious evaluators; loyal
returning users versus one-time buyers; lurkers
versus contributors
Power or respect
among their peers;
appeal to reputation.
Money, or alternate
currency rewards; an
appeal to greed or
compensation.
Sex, attractiveness;
an appeal to desire.
Fear of missing out,
risk, loss, etc.; an
appeal to safety.
Made Paid Laid Afraid
Humans have four big motivators:
268. When it’s time to move on
• Are you using one of the three types of virality (inherent, artificial, word of mouth)
for your startup? Describe how. If virality is a weak aspect of your startup, write
down 3-5 ideas for how you could build more virality into your product.
• What’s your viral coefficient? Even if it’s below 1 (which it likely is), do you feel like
the virality that exists is good enough to help sustain growth and lower customer
acquisition costs?
• What’s your viral cycle time? How could you speed it up?
270. What’s a fitbit customer worth?
• The user can record their steps with a device in their pocket
• They can use it and sync data to the hosted application
• They can visit the portal to see their statistics
• They can manually enter sleep and food data
• They can buy the premium Fitbit offering
• Each of these is a different tier of engagement, and Fitbit could segment users
across these five segments when analyzing the effectiveness of a marketing
campaign or the volume of support e-mails.
271. When it’s time to move on
You’re making money
You’re sustainable
You’re tracking growth metrics
272. Revenue stage:
Backupify’s customer
lifecycle
• Stage: Revenue
• Model: SaaS
• Leading backup provider for cloud based data.
• The company was founded in 2008 by Robert May and Vik Chadha
• Has gone on to raise $19.5M in several rounds of financing.
273. You need a business model
Start with a systems diagram
What’s the core job to be done?
276. What job are you doing?
Personal
dimension
Social
dimension
Functional
aspects
Emotional
aspects
Related jobs to
be done
Functional
aspects
Emotional
aspects
Personal
dimension
Social
dimension
Main job to be
done
http://innovatorstoolkit.com/content/technique-1-jobs-be-done
277. Changes create new JTBD answers
Photo by Andrew Dyer on Flickr - https://www.flickr.com/photos/andrewdyer/350938953
+ = ?
285. “The most important figures that one
needs for management are unknown
or unknowable, but successful
management must nevertheless take
account of them.”
Lloyd S. Nelson
286. Pic by Twodolla on Flickr. http://www.flickr.com/photos/twodolla/3168857844
293. Maybe they don’t love you
like they said they do.
N
Your offering doesn’t make them want to
brag or their contact isn’t really a friend
N
Advocates can’t learn & convey
your message easily
N
They don’t trust you entirely
N
Woohoo! Scalable, viral,
explainable product!
Y
Get a meeting
Y
Grab the phone
Y
They pitch it
Y
Call them now?
Y
Intro to a friend?
Interview
294. B2B and the 80/20 rule
How to tell if you have a sustainable, repeatable B2B idea.
295. Target customer
Reachable, referenceable.
Find 10 prospects*
Target customer
Reachable, referenceable.
Target customer
Reachable, referenceable.
Target customer
Reachable, referenceable.
Target customer
Reachable, referenceable.
Target customer
Reachable, referenceable.
Target customer
Reachable, referenceable.
Target customer
Reachable, referenceable.
Target customer
Reachable, referenceable.
Target customer
Reachable, referenceable.
* 10 is an aribtrary
number. Just be sure
there are enough out
there to grow sustainably
from their actions.
300. The whole point of digital is personal
Segment 1
User segment
(who)
Segment 2
Segment 3
Goal
(what)
Goal 1
Goal 2
Goal 3
Motivation
(why)
Goal 1
Goal 2
Goal 3
305. Bounces Non-
creators
Non-
payers
Churn
Improve stickiness; call-to-action optimization;
A/B page testing; picking better traffic sources
Notifications; updates; reactivating users;
segmenting those who are engaged.
Usage caps, natural upselling;
premium features
Better support; credit card renewal;
naturally sustained features
306. Let them ask for an out
Detecting SaaS churn early without hurting cashflow
307. The tradeoff
Charge a monthly fee Charge annual fee up front
Find out if they hate it sooner, when
they cancel on first billing cycle.
No need to pay back CAC; cash you
can use right away.
Takes months to recoup the money
you spent acquiring them.
May be a zombie user who vanishes
when the year is up.
308. They’re happy, you keep your
money, goodwill for offering.
They’re unsatisfied, you made it
right, they tell you why, you learn.
The solution—because the goal is to
learn, not to trap customers.
Annual fee, with an out
1. Offer an annual, discounted fee.
2. After a couple of weeks, ask if
they’d like a refund.
317. What job are you doing?
Personal
dimension
Social
dimension
Functional
aspects
Emotional
aspects
Related jobs to
be done
Functional
aspects
Emotional
aspects
Personal
dimension
Social
dimension
Main job to be
done
http://innovatorstoolkit.com/content/technique-1-jobs-be-done
318. Changes create new JTBD answers
Photo by Andrew Dyer on Flickr - https://www.flickr.com/photos/andrewdyer/350938953
+ = ?