presentation to masters of entrepreneurship students in lux
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Lux University Masters of Entrepreneurship Presentation
2016
Luxembourg based, growth stage technology company founded in 2011 and now made up of a team of 22 and PIONEERING THE FIELD OF SMALL DATA
Firstly… I am no Startup Queen, Business legend or social Impact God…
Yet…
Rather, I want to use this lecture as a guide on some of the things I wish I had learnt when I was starting out.
Today I will discuss • Starting a startup • The Lean Methodology • Product Market Fit • Testing
Ok… So you want to start something awesome?
You dreaming of how awesome it will be…
After all, you are already planning out your office decor….
Reality can hit hard and fast in the beginning..
Innovation hub, startup HQ
I don’t wanna burst your bubble…
90% of startups fail…
You could stop there, get a job, have financial security, work 9-5 and vacation time…
You could stop there, get a job, have financial security, work 9-5 and vacation time…
and spend the rest of your life regret never trying…
Or you could say to those stats - stick ‘em
But words aren’t actions… So how can you be the startup in the 10%?
Let me introduce you to this guy…
(you may know him, and if you do, great - 10 points)
Eric Ries - God behind the Lean Startup Model
But what is the lean startup and why is this approach so fricken awesome?
The Lean model is methodology that aims to shorten product development cycles by adopting a combination of business-hypothesis-driven experimentation, iterative product releases, and validated learning.
The central hypothesis of the lean startup methodology is that if startup companies invest their time into iteratively building products or services to meet the needs of early customers, they can reduce the market risks and sidestep the need for large amounts of initial project funding and expensive product launches and failures
AKA
LEARN
AKA
LEARN
BUILD AKA
LEARN
BUILD
MEASURE
AKA
LEARN
BUILD
MEASURE
AKA
REPEAT
Before you go thinking that this can only happen once you have built your product, you would be mistaken…
The Lean methodology can be used early on even in the first critical step for any company.
PRODUCT
PRODUCT MARKET
PRODUCT MARKET FIT
Is there a sufficient demand in a clearly defined marketplace for my product that can also ensure scalability?
AKA
Let me take you on a personal journey with the lean approach and product market fit my company
Before we even incorporated we showed our technology to a lot of people… friends, investors, colleagues…
They were all pretty impressed and excited…
BUT
Almost every single person had a different (and supposedly amazing) view on what our technology could be used for… Including…
Global Regulatory Tracking
Sports News Curation
Global Media Source Flow Analytics
Web Data Usage Analytics
The Pinterest of Web Data
Stock Flow Sentiment Detection
App Data Providers
FOR
B2B
B2C
B2G
B2B2C
B2B2B
So we developed this…
What Happened?
5000 users…
5000 users… Seed Investment…
5000 users… Seed Investment… AND - an article in TechCrunch
5000 users… Seed Investment… AND - an article in TechCrunch
Awesome, huh?
Introducing Vanity Metrics
“Vanity metrics make you feel good, but they don’t offer clear guidance for what to do” - Eric Ries
The 5000 users were from multiple different segments, all using the technology in different ways with no clear pattern or insight….
And the article was amazing validation for our technology, not to mention great publicity, but it caused yet another saw in users that caused even more confusion and even more artificial growth…
So what did we do?
We stopped firing a machine gun into a bunch of pigeons and decided we needed to tighten up our product market fit…
We need to break things down into smaller pieces and think like a sniper
We selected on key market, with one key user case and we tested, tested, tested…
When we didn’t see true progress based on real metrics (aka, not vanity metrics) we PIVOTED
A pivot is a "structured course correction designed to test a new fundamental hypothesis about the product, strategy, and engine of growth."
Steve Blank states that it’s about changing the plan, not the execution.
After lot’s and lot’s of testing, we discovered that our technology was too complicated for typical B2C consumers. The learning curve required extensive training and suited the demands of B2B and B2G.
So this is great… but how does it effect you guys?
1. You have a great idea
2. Before building, you test the market
Google Adwords, or Facebook ads are great for this. You can test ads across multiple different profiles before building anything, in order to measure the best results
2. You build an MVP
There needs to be strong emphasis on the “minimum.” There is no point building something people won’t use, even if it has bugs, ship it to early adopters.
2. Measure (the metrics that really matter)
For example, at Tadaweb we found the rate of new users was actually a VANITY METRIC. What really mattered was their return rate and interaction with our SDK
Make sure your metrics measure what is truly valuable to finding your product market fit
2. Build / React
If you are noticing that the key, real metrics are not good…
DON’T
DON’T WAIT
DON’T WAIT TOO
DON’T WAIT TOO LONG!
Another key to the unleashing the power of the lean model is “speed”
It can be easy as the founder to DENY EVERYTHING
But this denial often only puts off the inevitable
So go, find an amazing idea. Before even building, test, test, test the market. Once validation of real metrics (NOT VANITY METRICS) starts to go well, build an MVP and get early adopters on board. Measure, measure, measure. Are they key metrics still performing? Yes? Awesome! No? Maybe you need to pivot? AND FAST
THANKS
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