#SGStartups

Lean  Startups  in  the  Real  World  

Hugo  Stevens  Startup  Factory  

The  Applica;on  

Personalized  urban  

alert  system  

Personalized  intelligent  

alert  system  for  urban  

areas,  based  on  mobile  

devices  to  aggregate  

aBen;on  from  a  large  

number  of  poten;al  

users.  

 

How  it  started  

First  version  

Current  App  

User  growth  

Growth  in  Pageviews  

How  to  get  there:  Reference  Models  

•  Market:  –  Who  is  the  customer?  What’s  their  pain?  How  much  would  they  pay?  

•  Solu6on:  –  What  features  to  build?  Are  features  feasible  to  build/offer?  

•  Go-­‐to-­‐market:  –  Which  Channels?  What’s  the  cost  per  channel?  Scalable?  

•  Business  Model:  –  Sources  of  revenue?  Costs?  Plan  vs.  Real?  Profitable?  

Keep  it  Simple:  Key  ques;ons  in  the  real  world  

The  Process:  Find  the  right  combina;on  

•  Customer  interviews  –  Problem  interview  –  Solu;on  interview  

•  Product  Prototyping  –  Open  source  plaQorms  (Wordpress,  etc.)  –  Amazon  Web  Services,  web  providers  (SMS)  

•  Metrics  &  Analy6cs  –  Google  Analy;cs  –  Offline  sta;s;cs  

•  Financial  modeling  –  Predicted  model  @  Excel  –  Updates  based  on  real  metrics  

Tools  

The  process:  Step  by  Step  

Build  +  Measure  +  Learn  1.  Unbounce  +  Google  AdWords  2.  Keynotopia  3.  Weebly  +  dummy  content  +  basic  Google  Analy;cs  4.  Wordpress  +  themes  +  real  content  +  conversions  @  Google  

Analy;cs  5.  AdWords  +  FB  ads  +  LinkedIn  Ads  +  social  distribu;on  6.  Version  1.0  +  advanced  Google  Analy;cs  7.  Version  2.0  +  usage  metrics  (mix  panel)  

Key:  The  Not  To  Do  List  

Don’t:  1.  Speak  to  the  press  on  day  one  2.  Build  a  complete  product  from  the  ground  up  3.  Think  about  your  idea  for  6  months  4.  Build  an  architecture  for  1,000,000,000  users  5.  Try  to  change  users’  behavior  6.  Add  1,000  features  7.  Start  with  a  big  team  

The  Process:  how  to  know  if  you’re  right?  

AARRR  1.  Acquisi;on  2.  Ac;va;on  3.  Reten;on  4.  Referral  5.  Revenue  

Which  metrics  go  where?  (and  in  what  order)  

Metrics  vs.  element  to  validate  1.  Market  metrics:  Acquisi;on  &  Ac;va;on  

•  Search  volume,  CTR  2.  Product  metrics:  Ac;va;on  &  Reten;on  

•  Conversion  %,  A/B  tests  for  features,  reten;on      3.  Distribu;on  metrics:  Acquisi;on  &  Referrals  

•  Cost  per  channel,  volume  per  channel,  viral  coefficient  4.  Business  Model  metrics:  Revenue  +  all  others  

•  Revenue  per  user,  LTV  

Metrics  per  unit  (i.e.  %’s)!  (vs.  vanity  metrics)  

Real  World  Metrics  

•  Key  metrics:  –  Users  looking  for  traffic  informa;on  (market  pain):  

–  CTR:  15%  for  main  keywords,  3%  overall  –  Interviews  with  customers  confirming  need  for  personalized  alerts  

Real  World  Metrics  

•  Key  metrics:  –  Users  finding  the  product  interes;ng  (product  features):  

–  Conversion:  12%  overall  (80%  complete  registra;on  process)  –  Started  lower;  ini;ally  about  50%  dropped  during  registra;on  

process.  Improved  design,  overhauled  registra;on  process  –  Customer  Acquisi;on  Cost:  made  adjustments  that  cut  it  in  half  –  Aner  registra;on,  between  40%-­‐50%  of  users  clicked  on  links  for  

smartphone  versions  of  the  applica;on  (1.  BB  2.  iPhone  3.  Android)  –  Distribu;on  of  mobile  apps  at  Appstores  doubled  user  base  in  4  

weeks  –  without  promo;onal  ac;vi;es  

Real  World  Metrics  

•  Other  hypotheses:  –  Imperfect/incomplete  product  s;ll  beBer  than  alterna;ves  –  Sharing  FB/personal  info  is  ok  for  users  (also  faster/simpler)  –  Simplicity  in  interface  is  key  (vs.  compe;;on)  –  Confirm  CTR  @  different  mediums  (cell  phones  vs.  smartphones,  display  

ads  vs.  clickable  ads,  personalized  coupons,  etc.)  –  Confirm  CPC  and  who  pays  (agencies  vs.  marke;ng  departments)  

Lessons  Learned  

Lessons  &  recommenda6ons  1.  Pick  a  large  poten;al  market  to  begin  with  2.  Focus  on  what  users  are  already  trying  to  do  3.  At  the  beginning,  it’s  Pass/Fail,  not  A/B  4.  Mobile  first  (and  it’s  very  different  from  desktop)  5.  Don’t  push  features  –  test  your  roadmap  6.  Do  quick  experiments  –  start  with  the  expected  results  7.  It’s  not  about  money  -­‐  tes;ng  a  whole  concept  can  cost  as  liBle  as  

$500  USD  8.  Almost  anything  can  be  tested:  physical  products,  physical  

distribu;on,  etc.  9.  Distribu;on  is  king  –  consider  all  channels  (online  &  offline)  and  

mul;ple  plaQorms  10.  React  quickly  –  the  market  doesn’t  wait  

Summary  of  results  

Key  numbers:  1.  User  growth:  ~3.5X    2.  Pageviews  growth:  ~10X  3.  Pages/vist  growth:  ~2.5x  4.  User  acquisi;on  reduc;on:  ~10X    

Next  Steps  

To  infinity  and  beyond  (but  only  the  paranoid  survive)    

Tools  

Learn  to  use  all  of  these:  1.  In-­‐person  interviews  2.  Unbounce  3.  Wordpress  +  themes  4.  Google  Analy;cs  5.  AdWords/FB  ads/AdMob/LinkedIn  ads  6.  Social  media  tools  7.  Keynotopia  8.  Paypal  9.  MixPanel  10.  Lean  Launch  Lab  11.  Phone  calls  12.  Stands  @  physical  stores/flyers/etc  

Contact  

Hugo  Stevens  www.StartupFactory.com.mx  

Disruptors.mx  @hugostevens