Thinking lean presentation

Thinking Lean – For Startups And Investors

Chu Tzu Ming

www.impersuasion.com

Note: Applicable for software/ web type companies only coz I know nothing much about anything else

Why I am Here• I became moderately good at Excel after 10

years in the venture capital industry.

• I have scars and tattoos to share with you.

• I had to unlearn what I learned.

• We share so we can learn from mistakes.

• Movement – is the next cornerstone in corporate culture

“You don’t get extra points for learning things the hard way “ – Mr. Kawasaki

Textbook Model (Kilang Model)Write Bplan (30

pages and forecasts)

Form Team

Get Funding

Build Product

Marketing

Sell/Hire Sales guy

What’s wrong with this?Nothing. It just doesn’t

work very often, it’s wasteful and it gets

people into debt

RIP

Oh, that’s the risk inherent in early stage companies, too bad…

The ones that succeed –know who to sell to

somehow and end up doing what they did b4.

How Things Get Screwy• Founders:

– They don’t know what problem they’re solving, feature driven instead.

– They confuse a feature with a ‘product’.– They’re not subject matter experts – yet.– Lack a clear/repeatable path to the customer– They don’t know if customer thinks they add value. (The “I

think so” syndrome)– They don’t know who’s going to buy immediately– They always say I need the money first to start. Many end

up getting old.– ‘Corporate Drama’ – investors, fellow founders are

lazy/greedy/ team problem/ husband and wife/bf/gf

This Lean Startup* Thing…

Write 2 page Bplan/Problem Form Team

Small Funding/Bootstrap/MSI

Build Prototype/

MVP

Test Marketing

Sell/Hire Sales guy

Refining Sales Methodology

Repeat Orders/ Feedback

Scale

VC Round: Optional

Note*: Eric Ries, Steve Blank’s Four Steps to the Epiphany

Evaluate Team/Equity contribution

Customer Discovery

Product/market fit/Validation

Lean Startup Steps/Activities

Customer Development

“So What’s Different?”

– It’s Actionable Data To Validate Learnings

- ‘Calculated’ Risks

-80/20 principle

- Lean Not Waste

- Small Wins

- Agile/Pivot

- Accountability

“You Scale Only When You Have RECURRING Customers And Revenue”

The FunnelAcquisition – FB, SEO, Paid Traffic

Activation – Attention Confirmed. Clicks, Likes, sign ups, comments, downloads

Retention – Returning visits, usage, comments Referral–

Invites, Backlinks, shares, mentions, retweets

Revenue, Goal - $$$, sign ups, Invites

Your Goals May Be One Any Of The Metrics Themselves

Virality – Mechanics

Invites SentNo of People Infected Who

Invite

No of People Who accept

Invitation

Y (Activation Rate)= 100 or 100/10,000=1%

X (Volume)= 100,000 Z (Invite Rate)= 1or 1/100 =1%

Viral Coefficient=xyz > 1=10,000* 1% * 1%=1

•Think how Movies Work, Malaysiakini, Gmail

•Network Marketing

Metrics

• AARRR

• Costs Of Customer Acquisition

• Virality/Word of Mouth (lowers Avg Cost Per Cust Acquistion)

• A/B testing (offline/online) on Conversions

• Sales Conversions

• Customer Lifetime Value

How Does This Fit Again?

Acquisition Activation Referral Retention Revenue/Goal

X Invites

Y Accept Invites

Z Reinvites

1. DEFINE AARRR OBJECT PURPOSE2. DEFINE XYZ Elements3. DEFINE ACTIONS

Tools & Leverage

Build Prototype

Test Marketing

Refining Sales Methodology

Minimum Viable Product (MVP)LAMP/RORAmazon AWS, herokuWordpress, Uservoiceprogrammableweb, GOOG, FB, Odesk

PPCSurvey monkey/Poll daddyGoogle Analytics/Crazy eggWebsite optimizer/Tracking Urls

Robert Cialdini, InfluenceDirect response MarketingLinkedinDan Kennedy/Joe PolishNegotiation Skills

Viral Loop (Tell a friend), FBAutomated Email marketing/sequencesSEO/Online PR/Online PR

Traffic, bootstrapFB groups, pages, emails

Scaling

“What About Investors?

-LS Enables Intelligent Risk Assessment For Early Stage Companies”

Deal Assessment• Metrics – Clearer Risk Profile To Early Stage

Projects– Market Definition And Size (ground up), Keyword

Research– AARRR– Analytics, funnels, conversions, time on site– ROE (Return On Effort)– Leverage Metrics: How much faster, better, cheaper?– Invest less, less onerous terms (to the

entrepreneur), close more deals.

• Talk to customers or to-be customers.– Is this problem something they would pay to solve– Would they buy it today if it was ready?

Caveats

• Don’t measure for the sake of measuring

• Make ‘Lean Startup’ a habit when you have no money/limited budget. It’s hard to do it when you have loads of cash.

Resources

• Eric Ries, Steve Blank’s blogs• Ash Maurya’s blog• Quicksprout.com• Viral Loop- Adam Penenberg• Founders at work - Livingston• Books on dealing with difficult people• Praying• Tenacity through exercise• Dave McClure’s prez on Slideshare• Rework – Jason Fried/David Hansson• 80/20 Principle – Richard Koch• www.impersuasion.com

Contact

• Email: [email protected]

or

Email: [email protected]