Metrics for Startup Success and Failure
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17-Oct-2014 -
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Transcript of Metrics for Startup Success and Failure
Metrics that MatterDefining startup success and failure
Hiten ShahCustomer and Business Development Class at Berkeley • Mar 9, 2010
The Startup PyramidThe Race to the Top
Product / Market Fit
Transition to Growth
Growth
Sean Ellis: Startup-Marketing.com
• Low burn, focused on product, no VPs / sales people
• Customer Development (Steve Blank, Four Steps)
• Minimum Viable Product (Eric Ries, The Lean Startup)
• Pivots (Eric Ries, The Lean Startup)
Product / Market Fit
…the life of any startup can be divided into two parts – before product/market fit and after product/market fit.”Marc Andreesen, Founder of Netscape
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• It’s all about learning and discovery
• Outlined by Steve Blank in Four Steps to the Epiphany
Customer Development
• Coined by Eric Ries as part of The Lean Startup
• Lean Startups are a series of MVP’s
• Each designed to answer a specific question (hypothesis)
Minimum Viable Product
The minimum viable product (MVP) is often an ad on Google. Or a PowerPoint slide. Or a dialog box. Or a landing page. You can often build it in a day or a week.”Nivi, Venture Hacks
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If Apple can launch a smartphone without Find or Cut-and-Paste, what can you cut out of your product requirements?”Lance Glasser, former CTO KLA-Tencor
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The first version of Gmail was literally written in a day”Paul Buchheit, Google / Friendfeed / Facebook
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• Segment pivot - existing product, different customers
• Customer problem pivot - same customers, different problem
• Feature pivot - pick a feature and reorient around it
Pivot
The idea that successful startups change directions but stay grounded in what they've learned.”Eric Ries, The Lean Startup
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• 40%+ of users say they would be “very disappointed”
• Representative of a large enough target market
• Use Survey.io to get started
Product / Market Fit MetricsCreated by Sean Ellis (12in6)
Sean Ellis: Startup-Marketing.com
• Positioning - optimize first user experience via messaging
• Economics - implement a business model
• Optimization - track and report on the right metrics
Transition to Growth
Once you have achieved product/market fit, it’s time to accelerate through the next steps of the pyramid and then begin scaling your business.”Sean Ellis, 12in6
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First Product IterationTarget Customer: Social Application Developers
Pivot 1Target Customer: Many customer types
Pivot 2Target Customer: 1 specific customer type
“Metrics are people, too”Eric Ries, The Lean Startup
Test Things for Yourself!
Passionate about helping other entrepreneurs and startup people.”
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Thank You!