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Startup Marketing Slides from Lean Startup Circle LA

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Sean Ellis
Sean Ellis

These slides explain why network effect startups require a very different go to market approach than "normal" startups.

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Lean Startup MarketingDriving Sustainable Growth at Normal Vs Network Effect StartupsSean EllisLean Startup LAAugust 10, 2010
Objectives for Today’s MeetingApply lean startup principles to driving growthNormal startupNetwork effect startupRefine based on group feedback2startup-marketing.com
What are the Lean Startup Principles?Nail it then scale itRapid hypothesis testing about market, pricing, customers (customers & markets unknown)MVP (Minimum viable product)Low burn by design (no scaling until revenue)Metrics, iteration, agile developmentLearn fast (fail fast)3startup-marketing.com
“Lean-ish” Mktg = Back-to-Back IPOsFirst Startup Goals (1996 launch)Lead online game categoryGet users at cost lower than user value (ARPU)Minimize waste via sophisticated metricsSecond Startup Added Goals (2003 launch)Understand user perceptions of valueOptimize funnel (reduce friction)4startup-marketing.com
“Value” in Normal Vs Network EffectNormal Value same with 1 user or 1m usersGoogleLogMeInXobniNetwork effect Value improves with more usersFacebookSkypeEbay5startup-marketing.com
Growing Valuable “Normal” Startup6startup-marketing.com
Creating Value: Normal StartupProduct/market fit = product is “must have” (value)Become a “must have” with customer developmentValidate “value” assumptions early (who needs/why?)Get users on first release ASAPFind “must have” users/use casesFacts outside building (interviews then surveys)Pivot if necessary to create value7startup-marketing.com
Key “Value” Question on Survey.io“How would you feel if you could no longer use Product?”8startup-marketing.com
Start Transition to Growth9startup-marketing.com
After P/M fit: Race to Scale“Value” is perishable (“MH” window of opp)Focus on speed rather than short-term burn* Long-term burn will be less with speedDifficult after “low burn” VC praiseRequires major shift in culture Culture shifts from patience to speed* During growth transition10startup-marketing.com
Key Growth Transition ProjectsUnderstand– core value perceivedPositioning - based on perceived valueRight metrics – to focus resourcesOptimize conversions - LP & funnelViable economics - business modelScalable growth strategy - who/intent?11startup-marketing.com
Optimize Before GrowingLanding pages12%13%8%…12startup-marketing.com
2. Visualize/Optimize FunnelHome Page200,00010000050%Signup50000100,00012.5&12.5%Path 2Path 125000X00025000X%Path 1 (step 2)X000X00X%X%X%X%PaidPaidFreeFreeX000X00X00X00013startup-marketing.com
Better conversion efficiency and rev per user Improves range & scalability of viable channels14startup-marketing.com
Scalable Growth Now Possible15startup-marketing.com
Test from Free to Paid Channels16startup-marketing.com
Driving/Managing GrowthSpend as many positive ROI dollars as possible17startup-marketing.com
Normal Startup Easy VS Network Effect18startup-marketing.com
Network Effect Business Critical Mass Required for Full Validation(Lean is normally antithesis of “get big fast”)19startup-marketing.com
Pre Growth Prep for Network EffectCustomer Dev critical to validate up frontRaise enough money to get past “no man’s land”Define minimum viable critical mass (MVCM)Facebook– Harvard, Twitter - SXSWWithin region, demographic, product type (mkt place)…Have strategy for “priming the pump” (or fly wheel)20startup-marketing.com
Scale & Optimize On the FlyScale growth to MVCM (minimum viable critical mass)Generate revenue earlyEngage users to reposition, iterate and optimize on the flyEngage to validate gratification reachedReplicate approach for next critical mass after gratification in first MVCM22startup-marketing.com
Priming the Pump (for Some)*Create network balanceEbay, dating sites, etc.Example short-term strategiesSubsidize customer acquisition for dragging 1/2Services or hands on to “fake” balance (Aardvark)*i.e. if buyers and sellers21startup-marketing.com
Network Effect = P/M Fit After Critical MassProduct/Market Fit(Reposition on Value)Get Efficient ConversionsDrive Growth23startup-marketing.com
But Standard Pyramid for Most24startup-marketing.com

More Related Content

Startup Marketing Slides from Lean Startup Circle LA

  • 1. Lean Startup MarketingDriving Sustainable Growth at Normal Vs Network Effect StartupsSean EllisLean Startup LAAugust 10, 2010
  • 2. Objectives for Today’s MeetingApply lean startup principles to driving growthNormal startupNetwork effect startupRefine based on group feedback2startup-marketing.com
  • 3. What are the Lean Startup Principles?Nail it then scale itRapid hypothesis testing about market, pricing, customers (customers & markets unknown)MVP (Minimum viable product)Low burn by design (no scaling until revenue)Metrics, iteration, agile developmentLearn fast (fail fast)3startup-marketing.com
  • 4. “Lean-ish” Mktg = Back-to-Back IPOsFirst Startup Goals (1996 launch)Lead online game categoryGet users at cost lower than user value (ARPU)Minimize waste via sophisticated metricsSecond Startup Added Goals (2003 launch)Understand user perceptions of valueOptimize funnel (reduce friction)4startup-marketing.com
  • 5. “Value” in Normal Vs Network EffectNormal Value same with 1 user or 1m usersGoogleLogMeInXobniNetwork effect Value improves with more usersFacebookSkypeEbay5startup-marketing.com
  • 6. Growing Valuable “Normal” Startup6startup-marketing.com
  • 7. Creating Value: Normal StartupProduct/market fit = product is “must have” (value)Become a “must have” with customer developmentValidate “value” assumptions early (who needs/why?)Get users on first release ASAPFind “must have” users/use casesFacts outside building (interviews then surveys)Pivot if necessary to create value7startup-marketing.com
  • 8. Key “Value” Question on Survey.io“How would you feel if you could no longer use Product?”8startup-marketing.com
  • 9. Start Transition to Growth9startup-marketing.com
  • 10. After P/M fit: Race to Scale“Value” is perishable (“MH” window of opp)Focus on speed rather than short-term burn* Long-term burn will be less with speedDifficult after “low burn” VC praiseRequires major shift in culture Culture shifts from patience to speed* During growth transition10startup-marketing.com
  • 11. Key Growth Transition ProjectsUnderstand– core value perceivedPositioning - based on perceived valueRight metrics – to focus resourcesOptimize conversions - LP & funnelViable economics - business modelScalable growth strategy - who/intent?11startup-marketing.com
  • 12. Optimize Before GrowingLanding pages12%13%8%…12startup-marketing.com
  • 13. 2. Visualize/Optimize FunnelHome Page200,00010000050%Signup50000100,00012.5&12.5%Path 2Path 125000X00025000X%Path 1 (step 2)X000X00X%X%X%X%PaidPaidFreeFreeX000X00X00X00013startup-marketing.com
  • 14. Better conversion efficiency and rev per user Improves range & scalability of viable channels14startup-marketing.com
  • 15. Scalable Growth Now Possible15startup-marketing.com
  • 16. Test from Free to Paid Channels16startup-marketing.com
  • 17. Driving/Managing GrowthSpend as many positive ROI dollars as possible17startup-marketing.com
  • 18. Normal Startup Easy VS Network Effect18startup-marketing.com
  • 19. Network Effect Business Critical Mass Required for Full Validation(Lean is normally antithesis of “get big fast”)19startup-marketing.com
  • 20. Pre Growth Prep for Network EffectCustomer Dev critical to validate up frontRaise enough money to get past “no man’s land”Define minimum viable critical mass (MVCM)Facebook– Harvard, Twitter - SXSWWithin region, demographic, product type (mkt place)…Have strategy for “priming the pump” (or fly wheel)20startup-marketing.com
  • 21. Scale & Optimize On the FlyScale growth to MVCM (minimum viable critical mass)Generate revenue earlyEngage users to reposition, iterate and optimize on the flyEngage to validate gratification reachedReplicate approach for next critical mass after gratification in first MVCM22startup-marketing.com
  • 22. Priming the Pump (for Some)*Create network balanceEbay, dating sites, etc.Example short-term strategiesSubsidize customer acquisition for dragging 1/2Services or hands on to “fake” balance (Aardvark)*i.e. if buyers and sellers21startup-marketing.com
  • 23. Network Effect = P/M Fit After Critical MassProduct/Market Fit(Reposition on Value)Get Efficient ConversionsDrive Growth23startup-marketing.com
  • 24. But Standard Pyramid for Most24startup-marketing.com

Editor's Notes

  1. Value can’t be dictated, it has to be crowd sourcedSomebody loves it - who, why?Fine tune product, messaging around this “must have” use case
  2. Landscape of choices quickly changes. Only a “must have” when no good alternatives, then “nice to have”
  3. Range and scalability of viable channels dramatically increases
  4. Becomes more like regular marketing (but keep metrics driven discipline)
  5. Acquisition, Activation, Retention, Referral, Revenue
  6. Range and scalability of viable channels dramatically increases
  7. Range and scalability of viable channels dramatically increases