Blue ocean startup 101 - Intro
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17-Oct-2014 -
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Transcript of Blue ocean startup 101 - Intro
Blue Ocean Startup:
Gil Rachlinwww.linkedin.com/in/[email protected]://www.skillshare.com/profile/Gil-Rachlin/5240900
Innovation + Execution = Success
Blue Ocean Startup
Lean Startup•RiesEric
Blue Ocean Strategy•MauborgneRenée/W. Chan Kim
Blue Ocean Startup?
Innovate ExecuteLean Startup
•RiesEric
Blue Ocean Strategy•MauborgneRenée/W. Chan Kim
2- Blue Ocean Startup-
Allocate resources asefficiently as possible:
• Develop MVP• Validated Learning• Build Measure Learn
Make the competition irrelevantDIFFERENTIATION and LOW COST =Value innovation
Innovative and strategic Companies
3- Blue Ocean Startup-
What made them Different from other players?
• 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”
Three Characteristics of a good strategy
Focus SplitClear differentiation
from existing trend
CatchySlogan
• 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”
4- Blue Ocean Startup-
How to create innovation?
Innovation Cycle
5
Innovate - Build – Measure – Learn
Ideas/BOS
Innovation
Build /Resources
Learn /Insights
Two Hypothesis:• Value Creation
Hypothesis - BOS• Growth Engine
Hypothesis / Drivers(Growth Engine: Viral,Sticky, Paid)
• Focus on Customer Value• Focus on Conversions, sales and profits• Set your Base Line and Time Frame
6- Blue Ocean Startup-
Product /MVP
Base Line
Measure /Metrics
Data /Reports
From Lean Startup Loop
Two Hypothesis:• Value Creation
Hypothesis - BOS• Growth Engine
Hypothesis / Drivers(Growth Engine: Viral,Sticky, Paid)
• Product Analytics:• Customer Analytics• Marketing Analytics
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 withsomething in common.
7- Blue Ocean Startup-
• 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 withsomething in common.
Cohort Analysis:
Core engagement metric:Time on SiteCohort retention
8- Blue Ocean Startup-
Courtesy of: http://jonathonbalogh.com/2012/03/24/introduction-to-cohort-analysis-for-startups/
• 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?
Engine of Growth Funnel Metrics: AARRR
After ProductOptimization
Initial MVP
PaidViralEngine of Growth
1 7%5%Acquisition: Visit Site /Registration Rate
90%17%Activation: Sign Up 90%17%Activation: Sign Up
5%0.5Retention: Come Back
4%0.3Referral: Invite Friends
11%1%Revenue: Buys Product
$9.99 per month forbackup
One time paymentLifetime Value
Innovate when the barriers go down!
When to Innovate again?
Or else….?!Borders and Barnes &Nobles:Blue Ocean – In Store ServiceNook – Too late?
Amazon –Repeated Blue Ocean:- Online book store to- Online market place to- Mobile book to- Online cloud
Natural Monopoly / Legal Barriers (e.g. Patents) / Sales VolumeConsumer loyalty to Innovative companies etc.
10
Borders and Barnes &Nobles:Blue Ocean – In Store ServiceNook – Too late?
Amazon –Repeated Blue Ocean:- Online book store to- Online market place to- Mobile book to- Online cloud
Blockbuster:Blue Ocean – Rental of movies forfew dollars Instead of high cost ofmovies.Subscription / Streaming – Too late?
Netflix–Repeated Blue Ocean:- Subscription (no late fees)- Online Streaming
- Blue Ocean Startup-
Remember:
• Innovate• Execute• Repeat
Remember:If you get over the hill, you’ll begin to pick up speed!!!
11- Blue Ocean Startup-
Remember:If you get over the hill, you’ll begin to pick up speed!!!
Stay Hungry, Stay Foolish!Steve Jobs.
Thank you!!!!Gil Rachlin.
Contact Info: [email protected]/in/gilrachlin@gilrachlin
Site: www.blueoceanstartup.com
Free Gift: www.scanbizcards.com/promo/gil
Coming Classes:http://www.skillshare.com/profile/Gil-Rachlin/5240900
Question????
Thank you!!!!Gil Rachlin.
Contact Info: [email protected]/in/gilrachlin@gilrachlin
Site: www.blueoceanstartup.com
Free Gift: www.scanbizcards.com/promo/gil
Coming Classes:http://www.skillshare.com/profile/Gil-Rachlin/5240900
12- Blue Ocean Startup-
Value Innovation
13
Overall strategy of all company activities to bring valueto themselves and to customers
- Blue Ocean Startup-
Customers1) Who are our clients?2) Main usage of offering?
Industry1) What is our industry? Players?2) Industry elements? Characteristics?
Eliminate:• Buy Whole CD for one song
Raise:• Best Sound Quality• Control on Usage and
Usage learning• Availability for users (one
place to find all)• UI, Browse, Search
Example: Apple iTunes – ERRC Elements
NewValueCurve
14
Raise:• Best Sound Quality• Control on Usage and
Usage learning• Availability for users (one
place to find all)• UI, Browse, Search
Reduce:• Price per song (+Try Before
you buy)
Create:• Complement with iPod/
Mac• Liberal Licensing to
download digital content
NewValueCurve
- Blue Ocean Startup-
Example: Apple iTunes’ Value Curve Visualization
15
Eliminate Reduce Raise Create
- Blue Ocean Startup-
What is Measured?
• Product Analytics:– Insights to usage patterns, bug paths etc.– Improve product roadmap, customer service
etc.• Customer Analytics
– Customer behavior to optimize services forcustomers and dealers.
• Marketing Analytics– Keyword bidding to improve performance and
reduce costs– Weblog data to offer additional services etc.
KPI – Key Performance Indicators
16- Blue Ocean Startup-
• Product Analytics:– Insights to usage patterns, bug paths etc.– Improve product roadmap, customer service
etc.• Customer Analytics
– Customer behavior to optimize services forcustomers and dealers.
• Marketing Analytics– Keyword bidding to improve performance and
reduce costs– Weblog data to offer additional services etc.
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
17- Blue Ocean Startup-
• 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