Sean EllisLean Startup CircleMarch 24, 2010

Lean Startup Marketing

Channeling Resources to Create a Fast Growing Startup

Cross startup learning… for betterment of all startups

Led by entrepreneurs

- Steve Blank- Dave McClure- Eric Ries- Everyone here

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My Lean Experience

• Collective experience outweighs mine• Steve Blank recommended “lean” preso• Then couple Eric Ries posts/presentations• Limited time to participate in lean

revolution• But 15 years of “lean-ish” principles

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Objectives for Today’s Meeting

1. Share insights for growing a valuable startup

2. Fresh look at my approach growing startups using lean startup principles

3. Work together to evolve our understanding of startup growth

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What are the Lean Startup Principles?

• Low burn by design (no scaling until revenue)• Learn fast (fail fast)• Rapid hypothesis testing about market,

pricing, customers (customers & markets unknown)

• Metrics, iteration… • Agile development• What else?

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“Lean-ish” Marketing = Back-to-Back IPOs

First Startup (1996 launch)– Lead online game category– Get users at cost lower than user value

(ARPU)– Minimize waste via sophisticated metrics

Second Startup (2003 launch)– Added qualitative research and funnel

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Goal: Build Sustainable Valuable Company

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Low value startups: Scaling or cost-effective marketing

Valuable startups: Scaling cost-effective marketing

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Valuable Company Starts with Value

• Product/market fit = product is “must have” (value)• Become a “must have” with customer

development– Validate “value” assumptions early (who needs/why?)– Get users on first release ASAP– Find “must have” users/use cases (facts outside building)– Pivot if necessary to create value

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Getting to Scalable Cost-Effective Marketing

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Scale

Get EfficientConversion

Product/Market Fit (Value)

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Pyramid through Lean Startup Lens

• Waste – Eliminate wasted time, money, effort…

• Focus – Channel resources to create value• Speed - Get to next level as quickly as

possible• Learn – Hypothesize, test, refine

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Survey User Perceived Value

• Free template at Survey.io

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Key “Value” Question

“Very Disappointed” My Recommendation

0% – 25% Keep burn low, engage, iterate

26% – 39% Try repositioning, retargeting

40% – 100% Proceed up pyramid

“How would you feel if you could no longer use Product?”

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Start Transition to Growth

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Scale

Get Efficient Conversion

Product/Market Fit

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Better conversion efficiency Improves range & scalability of viable

channels

Race to Scale – Key Projects

1. Positioning - based on perceived value2. Right metrics - to channel resources3. Optimize conversions - LP & funnel4. Viable economics – monetize user value5. Scalable growth strategy - who/intent?6. What else?

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Optimize Landing Pages & Full Funnel

Signup

Home Page

Path 1

200,000

100,000

100000

50000

X000PaidX00

PaidX00

FreeX000

X00025000

50%

12.5& 12.5%

X% X% X% X%

Path 1 (step 2)

Path 225000

X000

X%

X00

Free

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Scalable Growth Now Possible

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Scale

Get Efficient Conversion

Product/Market Fit (Value)

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Test from Free to Paid Channels

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Channel Cost/user Scalability Viral/referral Free High Email (internal) Free Organic Blog Free Organic SEO Free or Paid Organic Widget Free or Paid Organic Biz Dev/Partners Free or Paid High Domains Paid (low) Low PR Paid (low) High Email (external) Paid (TBD) High SEM Paid (TBD) Can be High Contest Paid (TBD) Organic Affiliate/lead gen Paid (TBD) High Radio Paid (TBD) High TV Paid (TBD) High

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Driving/Managing Growth

Monitor Conversions

• Anything broken?

• AARRR

Manage Campaigns

•Optimize and scale campaigns on ROI

Develop New Campaigns

• Test new sources

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Budget to maximize positive ROI spend

Valuable Company

• Some loss of control is good

• Understand via triangulation– Origin tracking– Trend correlation – Surveys

• Feed the beast

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Channel Your Resources to Climb the Pyramid

Twitter: @seanellisBlog: startup-marketing.com

Scale

Optimize

Economics

Positioning

Product/Market Fit (Value)