Blue Ocean Startup recognizes that Innovation on its own is not enough, but rather that Innovation + Execution = Success. To achieve that we combined the two best methodologies on each: Blue Ocean Strategy (Innovation Without Competition) and Lean Startup (Execution) to allow companies to accelerate revenues through innovation.

1. Blue Ocean Startup:
Innovation + Execution = Success
Gil Rachlin
www.linkedin.com/in/gilrachlin
@gilrachlin
www.blueoceanstartup.com
http://www.skillshare.com/profile/Gil-Rachlin/5240900

2. Blue Ocean Startup?
Blue Ocean Startup
Innovate Execute
Blue Ocean Strategy Lean Startup
W. Chan Kim / Renée Mauborgne • Eric Ries •
Make the competition irrelevant Allocate resources as
DIFFERENTIATION and LOW COST = efficiently as possible:
Value innovation
• Develop MVP
• Validated Learning
• Build Measure Learn
- Blue Ocean Startup- 2

3. Innovative and strategic Companies
What made them Different from other players?
- Blue Ocean Startup- 3

4. Three Characteristics of a good strategy
Focus Split Catchy
Clear differentiation Slogan
from existing trend
• friendly service, Speed and frequency
• “Speed of a plane at the price of a car anytime
you need it”
• The digital entertainment center of your world
• "Welcome to the digital music revolution." (2004)
• Monthly subscription, No late fee, no due dates
• “Save gas and time. Let Netflix deliver your movies
again”
How to create innovation?
- Blue Ocean Startup- 4

5. Innovation Cycle
5

6. Innovate - Build – Measure – Learn
• Focus on Customer Value
• Focus on Conversions, sales and profits
• Set your Base Line and Time Frame Ideas/
BOS
Innovation
Learn /
Insights Build /
Two Hypothesis: Resources
• Value Creation
Hypothesis - BOS
• Growth Engine
Hypothesis / Drivers
(Growth Engine: Viral,
Sticky, Paid) Product /
Data / MVP
Reports
Base Line
Measure /
• Product Analytics: Metrics
• Customer Analytics
• Marketing Analytics
- Blue Ocean Startup- From Lean Startup Loop 6

7. Measurement Types / Innovation Accounting:
• Vanity Metrics
– e.g. PageViews, Unique Visitors,1 Million Messages per day,
funding
• Actionable Metrics - Cause and Effect (vs. Vanity)
– Help make decisions: a/b testing, pricing, cost per acquisition.
– Focus on Customer Value, Conversions, sales and profits
– Set your Base Line and Time Frame
– E.g. when we shipped feature X, did it affect customer
behavior?
• Cohort Analysis
– Go to the lowest level of analysis on groups of users with
something in common.
- Blue Ocean Startup- 7

8. Cohort Analysis:
Core engagement metric:
Time on Site
Cohort retention
• Did you make product alteration that only Week 3 cohort is exposed to?
• Did you change your advertising that week?
• Does Week 3 correspond with any major holidays or events?
Courtesy of: http://jonathonbalogh.com/2012/03/24/introduction-to-cohort-analysis-for-startups/
- Blue Ocean Startup- 8

9. Engine of Growth Funnel Metrics: AARRR
Initial MVP After Product
Optimization
Engine of Growth Viral Paid
Acquisition: Visit Site / 5% 1 7%
Registration Rate
Activation: Sign Up 17% 90%
Retention: Come Back 0.5 5%
Referral: Invite Friends 0.3 4%
Revenue: Buys Product 1% 11%
Lifetime Value One time payment $9.99 per month for
backup

10. When to Innovate again?
Innovate when the barriers go down!
Natural Monopoly / Legal Barriers (e.g. Patents) / Sales Volume
Consumer loyalty to Innovative companies etc.
Or else….?!
Borders and Barnes &Nobles: Amazon –
Blue Ocean – In Store Service Repeated Blue Ocean:
Nook – Too late? - Online book store to
- Online market place to
- Mobile book to
- Online cloud
Blockbuster: Netflix–
Blue Ocean – Rental of movies for Repeated Blue Ocean:
few dollars Instead of high cost of - Subscription (no late fees)
movies. - Online Streaming
Subscription / Streaming – Too late?
- Blue Ocean Startup- 10

11. Remember:
• Innovate
• Execute
• Repeat
Remember:
If you get over the hill, you’ll begin to pick up speed!!!
Stay Hungry, Stay Foolish!
Steve Jobs.
- Blue Ocean Startup- 11

12. Question????
Thank you!!!!
Gil Rachlin.
Contact Info: 646.580.0058
gil@blueoceanstartup.com
www.linkedin.com/in/gilrachlin
@gilrachlin
Site: www.blueoceanstartup.com
Free Gift: www.scanbizcards.com/promo/gil
Coming Classes:
http://www.skillshare.com/profile/Gil-Rachlin/5240900
- Blue Ocean Startup- 12

13. Value Innovation
Overall strategy of all company activities to bring value
to themselves and to customers
Industry Customers
1) What is our industry? Players? 1) Who are our clients?
2) Industry elements? Characteristics? 2) Main usage of offering?
- Blue Ocean Startup- 13

14. Example: Apple iTunes – ERRC Elements
Eliminate: Raise:
• Buy Whole CD for one song • Best Sound Quality
• Control on Usage and
Usage learning
• Availability for users (one
place to find all)
• UI, Browse, Search
New
Value
Curve
Reduce: Create:
• Price per song (+Try Before • Complement with iPod/
you buy) Mac
• Liberal Licensing to
download digital content
- Blue Ocean Startup- 14

15. Example: Apple iTunes’ Value Curve Visualization
Eliminate Reduce Raise Create
- Blue Ocean Startup- 15

16. What is Measured?
KPI – Key Performance Indicators
• Product Analytics:
– Insights to usage patterns, bug paths etc.
– Improve product roadmap, customer service
etc.
• Customer Analytics
– Customer behavior to optimize services for
customers and dealers.
• Marketing Analytics
– Keyword bidding to improve performance and
reduce costs
– Weblog data to offer additional services etc.
- Blue Ocean Startup- 16

17. Important tips:
• Marketing Goal
- Not reduced cost  acquire customers and maximize your
profits
• Metrics depend on Industry / business type
- Focus on Customer Value
- Focus on Conversions, sales and profits
- Set your Base Line and Time Frame
• Examples:
- Profitability of Each Customer (Life Time Customer Value)
- Cost of Acquiring New Customers
- Repeat Purchase Rate of Existing Customers
- At least 1000 orders/impressions/clicks for 3% margin of error
- Blue Ocean Startup- 17