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What’s a startup?A startup is
ﬁrst of all an experiment, it is a humaninstitution designed to deliver a new product orservice under conditions of extreme uncertaintyAt its heart, a startup is a catalyst that transformsideas into product. (From Lessons Learned blog By Eric Ries)
Multivariate Testing at Google “Yes,
it’s true that a team at Google couldn’t decide between two blues, so they’re testing 41 shades between each blue to see whic oneperforms better. I has a recent debate over whetera border should be 3, 4 or 5 pixels wide, and was asked to prove my case. I can’t operate in an environment like that.” (by Doug Bowman on Design at Google)
AARRR - Different orders (example)
1. Activation, Retention (happiness) 2. Revenue (sustainability) 3. Acquisition, Referral (virality) (this is the Ash Maurya or 37signals order: “Charge from day one”)
Activation at Facebook (i) which
data points predict whether a user will stay?(ii) if they stay, which data points predict how active they’ll be after three months?
Activation at Facebook (i) which
data points predict whether a user will stay? having more than one session as a new user and entering basic proﬁle information.(ii) if they stay, which data points predict how active they’ll be after three months?how often a user was reached out by others, frequency of third party application use, and how available a user was on the site.
Activation at Facebook “At the
time, I heard many people criticize Facebook’s early investors, claiming that Facebook had ‘no business model’ and only modest revenues relative to the valuation offered by its investors...”“...Facebook was different, because it employed a different Engine of Growth. It paid nothing for customer acquisition, and its high engagement meant that it was accumulating massive amount of customer attention every day.” (Eric Ries - The Lean Startup)
Making Money Key for any
business is to ﬁnd out how much proﬁt they make for every customer and scaling the number of customers
Lifetime Customer Value How much
money you make for every customer you acquire For some this a single transaction For subscription businesses it depends on retention
Cancellation Rate Cancellation rate =
is the percentage number of customers who cancel in any given month compared to total (paying) customers [Cancellation rate] = [product utility] + [service quality] + [acceptable price]
Lifetime Customer Value (LTV) r
= short-term cancellation rate (e.g. 0,15) p = long-term cancellation rate (e.g. 0.03) s = number of months in the “short-term” age group (e.g. 3) (1-r)^s x (s + 1/p) = expected months
Innovation Accounting “To improve entrepreneurial
outcomes, and tohold entrepreneurs accountable, we need to focus on the boring stuff: how to measure progress, how to setup milestones, how to prioritize work. This requires a new kind of accounting, speciﬁc to startups” (Eric Ries - The Lean Startup)
(Lean) Product Management Well, trying
to connect the dots: what we learnt so far is how the Product Owner can deﬁne and prioritize stories at every Sprint in a Startup that wants to be called, you know, Lean! :)
Learning Boards - Lean Stack
We will talk about the Lean Stack of Ash Maurya or other possible “lean mapping” frameworks in a future presentation
Credits Stuart Eccles - Lean
Startup Metrics Joshua Porter - Metrics-Driven Design David Cancel - Data-Driven Marketing Lean Startup Machine - How to measure the metrics that determine real progress(and the others speciﬁed directly in the slides when picking some parts of books or blogs)