Transforming users into customers by Blake Armstrong

The information contained in this document is being provided on a confidential basis to the recipient solely for the purpose of evaluating TheFamily (“TheFamily” or the “Company”). The document is intended for the exclusive use of the persons to whom it is given. By accepting a copy of this document, the recipient agrees, for itself and its related bodies corporate, and each of their directors, officers, employees, agents, representatives and advisers, to maintain the confidentiality of this information. Any reproduction or distribution of this document, in whole or in part, or any disclosure of its contents, or use of any information contained herein for any purpose other than to evaluate an investment in the Company, is prohibited. The information contained in this document or subsequently provided to the recipient whether orally or in writing by, or on behalf of the Company, or any of its respective related bodies corporate, or any of their respective partners, owners, officers, employees, agents, representatives and advisers (the “Parties”) is provided to the recipient on the terms and conditions set out in this notice.

TRANSFORMING USERS INTO CUSTOMERS:

3 CASE STUDIES

USERS -> CUSTOMERS =

PAIN POINT -> NEED -> DEMAND PAIN POINT FOR 1 PERSON

NEED IS PAIN POINT SHARED BY MANY PEOPLE

SOME OF WHOM ARE WILLING TO PAY = DEMAND

HOW DO MARKETS FORM?

SHIFTS IN

WHAT IS BEING SOLD

WHO IS BUYING

MARKET DEMAND ANALYSIS HAS MARKET CLEARLY STATED ITS NEED?

HOW MUCH IS MARKET WILLING TO PAY?

INTO THE UNKNOWN ANALYZING MARKETS

0% —————————— 99%

PUSH PULL

“MARKETS THAT DON’T EXIST DON’T CARE HOW SMART YOU ARE.”

- MARC ANDREESSEN

CASE STUDIES: SlackSpotifyIntuit

FEB 2014 ➔ 15,000 DAU

AUG 2014 ➔ 171,000 DAU

NOV 2014 ➔ 285,000 DAU

FEB 2015 ➔ 500,000 DAU

3,233% Y/Y GROWTH

1. DEFINED MARKET BY IDENTIFYING USER PAIN

2. NAILED PRODUCT EXPERIENCE BY DOING FEW THINGS EXCEPTIONALLY WELL

3. FUELED BOTTOM-UP, WORD-OF-MOUTH GROWTH BY USING FREEMIUM MODEL

STUART BUTTERFIELD SLACK CEO

“And then over the course of 3.5 years working on the game, we got up to about 45 people. And every time one of our

internal communication problems got to the point where we just couldn’t stand it anymore we would spend the minimum

number of minutes addressing that and then move on and slowly iterate. So we didn’t know it at the time and it wasn’t

obvious until [like] a year ago, in this very non self conscious, non speculative way we were designing Slack – but based

on the actual needs that we had as a team.

This is the good news and the bad news. After a couple years we had some insight into why it was successful. The bad news

is that it’s a hard thing to replicate – to be able to actually design something while not actively thinking about it – but it’s definitely the best way. Because I think that one of the biggest

problems that software designers, product managers, entrepreneurs have is the temptation to be really

speculative with what some hypothetical person would want as opposed to something that you know you need.


“When we asked the other 70 to 80% what they were using for internal

communication, they said, ‘Nothing.’ But obviously they were using

something. They just weren’t thinking of this as a category of software.”


“We’re selling a reduction in information overload, relief from

stress, and a new ability to extract the enormous value of hitherto useless

corporate archives. We’re selling better organizations, better teams. That’s a

good thing for people to buy and it is a much better thing for us to sell in the long run. We will be successful to the extent that we create better teams.”

1. PROBLEM SOLVED FOR USER > WHAT YOUR PRODUCT DOES

2. YOUR PRODUCT > DEFINED CATEGORIES

3. NO GROWTH STRATEGY = NO GROWTH

SPOTIFY VALUATION > $10 BILLION

> 50 MILLION USERS

12.5 MILLION PAYING CUSTOMERS

DANIEL EK, SPOTIFY FOUNDER & CEO

DEFINITION OF AN ENTREPRENEUR

“SOMEONE WHO IS ANNOYED ENOUGH BY A PROBLEM TO WANT TO SOLVE IT.”

SPOTIFY GROWTH • NAÏVETÉ WAS AN ASSET

• EXECUTION WAS ALL THAT MATTERED

• OPPORTUNITY IS EVERYWHERE

SPOTIFY 1. LASER FOCUS ON PRODUCT MARKET FIT

2. FREEMIUM MODEL = VIRAL EFFECTS

3. EXCLUSIVE DEAL WITH FACEBOOK

SPOTIFY “THINK ABOUT WHAT PROBLEM YOU

WANT TO SOLVE AND BE REALLY CRISP ABOUT THAT, ESPECIALLY IF YOU’RE A

TEAM OF PEOPLE... WHAT’S THE ULTIMATE PRODUCT SOLUTION AND THEN RATCHET IT DOWN AND THINK ABOUT THE SHORTEST WAY FROM

POINT A TO POINT B FOR THE USER.”

DANIEL EK’ GROWTH TIPS

1. SAY “NO” MORE OFTEN

2. STATE COMPANY WIDE METRIC GOALS VERY CLEARLY

3. SURROUND YOURSELF WITH A PLAYERS

4. HIRE FAST AND FIRE FAST

INTUIT & MINT PERSONAL FINANCE SOFTWARE

INTUIT FOUNDED IN 1983 BY SCOTT COOK

MARKET CAP : $24 BILLION

MINT FOUNDED IN 2006 BY AARON PATZER

SOLD TO INTUIT FOR $170 MILLION

INTUIT NOT SELLING “PERSONAL FINANCE SOFTWARE”

FOCUSED ON REDUCING TIME & HASSLE

INTUIT & MINT NEITHER WERE FIRST TO MARKET

BOTH CONQUERED MARKET USING ITERATIVE DESIGN

MINT 2 YEARS AFTER FOUNDING, GREW TO 1.5 MILLION USERS AND WAS

BOUGHT BY INTUIT FOR $170 MILLION

WHY ?

HOW?

MINT VS INTUIT MINT BEAT INTUIT AT ITS OWN GAME

MINT SETUP TIME10 MINUTES VS 1 HOUR FOR QUICKEN

50% OF QUICKEN EXPENSES FELL UNDER “UNCATEGORIZED”

ADVICE IS GENERAL EVERY STARTUP IS UNIQUE

PERSONAL FINANCE MVP

HIGH LEVEL OF TRUST REQUIRED

NO VIRAL EFFECTS BUILT IN - HOW TO GROW?

MINT GO-TO-MARKET FREE PRODUCT

HIGH QUALITY BLOG CONTENT

EMAIL COLLECTION AT END OF EVERY BLOG POST

BLOG FILTER: “WILL THIS GET PEOPLE TALKING & SHARING?”

VIP ACCESS TO USERS WHO POSTED BADGE TO SOCIAL MEDIA

PRESS: 550 INTERVIEWS, 255% INCREASE, 20K SIGNUPS/DAY, CAC < $1

SEO: OPTIMIZED LANDING PAGES FOR PERSONAL FINANCE QUERIES

PAID ADS: TARGETED COMPETITORS’ KEYWORDS

UNDERSTAND YOUR GROWTH CHANNEL 1 X CTR X CONVERSION RATE

CHANNEL 2 X CTR X CONVERSION RATE



CHANNEL 5 X CTR X CONVERSION RATE …

WHAT DID WE LEARN? 1. TALK ABOUT HOW YOUR PRODUCT IMPROVES USERS’ LIVES

2. DON’T LIMIT YOURSELF TO EXISTING MARKETS (BUT NEW = HARD)

3. UNDERSTAND WHAT’S DRIVING YOUR GROWTH

4. PLEASE CUSTOMERS & THEY’LL SAY NICE THINGS ABOUT YOU

5. FOCUS YOUR COMPANY ON GROWING ONE METRIC AT A TIME

6. OBSERVE YOUR CUSTOMERS & ITERATE REGULARLY

THIS IS ALWAYS TRUE, EVEN FOR A $BILLION COMPANY

YOUR STARTUP?

0% ———————— 99%

PUSH PULL

The information contained in this document is being provided on a confidential basis to the recipient solely for the purpose of evaluating TheFamily (“TheFamily” or the “Company”). The document is intended for the exclusive use of the persons to whom it is given. By accepting a copy of this document, the recipient agrees, for itself and its related bodies corporate, and each of their directors, officers, employees, agents, representatives and advisers, to maintain the confidentiality of this information. Any reproduction or distribution of this document, in whole or in part, or any disclosure of its contents, or use of any information contained herein for any purpose other than to evaluate an investment in the Company, is prohibited. The information contained in this document or subsequently provided to the recipient whether orally or in writing by, or on behalf of the Company, or any of its respective related bodies corporate, or any of their respective partners, owners, officers, employees, agents, representatives and advisers (the “Parties”) is provided to the recipient on the terms and conditions set out in this notice.

QUESTIONS?

Transforming users into customers by Blake Armstrong

Small Business & Entrepreneurship