Hackathon Idea validation
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Transcript of Hackathon Idea validation
Validating Hackathon Ideas
Raj RajamaniVP Product Management
MBA from Berkeley’s Haas School of Business VP Products at Cylance (Unicorn > $1B valuation) Product Management positions at
Marketo (went public in 2013) Arcot (acquired by CA Technologies) McAfee (acquired by Intel) Solidcore (acquired by McAfee)
ABOUT ME
1. Why us? Why now?
2. Unmet/underserved need
3. Large and Growing Market
4. Sustainable Competitive Advantage
5. Scalable Business Model
VALIDATING IDEAS
1. Cylance – Enterprise AV2. AppDynamics – Performance Monitoring3. Nutanix - Hyperconvergence4. Box – Collaboration5. Slack – Collaboration
B2B (ENTERPRISE) OR B2C (CONSUMER)1. Uber2. AirBnB3. Fitbit4. Spotify5. Blue Apron
More B2C University startups than B2B?
TRUE OR FALSE
Dropbox founder Houston conceived the Dropbox concept (in 2007) after repeatedly forgetting his USB flash drive while he was a student at MIT. He says that existing services at the time "suffered problems with Internet latency, large files, bugs, or just made me think too much.“
CASE STUDY - DROPBOX
Timing Need Market Size Competitive Advantage Business Model
DROPBOX
Timing – With the introduction of iPhones more users with multiple Internet capable devices Need Market Size Competitive Advantage Business Model
DROPBOX
Timing – With the introduction of iPhones more users with multiple Internet capable devices Need – Convenience is a BFD Market Size Competitive Advantage Business Model
DROPBOX
Timing – With the introduction of iPhones more users with multiple Internet capable devices Need – Convenience is a BFD Market Size - ?? Competitive Advantage Business Model
DROPBOX
INTERNET TRENDS BY MARY MEEKER
Timing – With the introduction of iPhones more users with multiple Internet capable devices Need – Convenience is a BFD Market Size – (150M (NA) + 150M (EU) + 300M (AP) ) X $1/month = $6B Competitive Advantage Business Model
DROPBOX
Timing – With the introduction of iPhones more users with multiple Internet capable devices Need – Convenience is a BFD Market Size – (150M (NA) + 150M (EU) + 300M (AP) ) X $1/month = $6B Competitive Advantage – Design + multi-platform support Business Model
DROPBOX
Following slides are Drew Houston’s (not mine)
BUSINESS MODEL
Public launch (Sep 2008): Time to get real
Public launch (Sep 2008): Time to get real
Our Web 2.0 Marketing Plan• Big launch at TechCrunch50• Buy some AdWords• Hire, um, a PR firm, or a VP of Marketing, or something
EXPERIMENT: PAID SEARCH Hired experienced SEM & affiliate marketing guy ($$) Picked out keywords, made landing pages Hid the free account option for people arriving via paid search, replace with free time-limited trial Went live in early 2009
Cost per acquisition: $233-$388
Cost per acquisition: $233-$388
For a $99 product. Fail.
LIFE TIME VALUE OF A CELL PHONE CUSTOMER
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6Revenues $720.00 $720.00 $720.00 $720.00 $720.00 $720.00
Service Cost (marginal cost) $150.00 $150.00 $150.00 $150.00 $150.00 $150.00Incentive Cost $0.00 $0.00 $0.00 $0.00 $0.00 $0.00
Customer Profit $570.00 $570.00 $570.00 $570.00 $570.00 $570.00Probability of being active 65.8% 43.3% 28.5% 18.8% 12.3% 8.1%
Profit expected on average $375.14 $246.90 $162.50 $106.95 $70.39 $46.32Present Value of Expected Profits $341.04 $204.05 $122.09 $73.05 $43.70 $26.15 $810.07
EXPERIMENTS FAILING LEFT AND RIGHT Problem: Most obvious keywords bidded way up
Probably by other venture-backed startups Problem: Long tail had little volume Problem: Hiding free option was shady, confusing, buggy Affiliate program, display ads, etc sucked too Economics totally broken
BUT WE WERE STILL DOING WELL…? Reached 1mm users 7 months after launch Beloved by our community
ADWORDS WASN’T THE PROBLEM Nobody wakes up in the morning wishing they didn’t have to carry a USB drive, email
themselves, etc. Similar things existed, but people weren’t actively looking for what we were making Display ads, landing pages ineffective Search is a way to harvest demand, not create it
TYPICAL DROPBOX USER
Hears about Dropbox from a friend, blog, etc. and tries it
“I didn’t realize I needed this”
“It actually works”
Unexpectedly happy tell friends
NEW STRATEGY: ENCOURAGE WOM, VIRAL
Give users better tools to spread the love Referral program w/ 2-sided incentive permanently increased signups by 60% (!!)
Inspired by PayPal $5 signup bonus Help from Sean Ellis: Surveys, split tests, landing page/signup flow
optimizations, encourage sharing big wins Big investment in analytics
Trailing 30 days (Apr 2010) : users sent
2.8 million direct referral invites
RESULTS September 2008: 100,000 registered users January 2010 (15 mos later): 4,000,000 Mostly from word-of-mouth and viral:
35% of daily signups from referral program 20% from shared folders, other viral features
Sustained 15-20%+ month-over-month growth since launch
Timing – With the introduction of iPhones more users with multiple Internet capable devices Need – Convenience is a BFD Market Size – (150M (NA) + 150M (EU) + 300M (AP) ) X $1/month = $6B Competitive Advantage – Design + multi-platform support Business Model – Direct to consumer, WOM marketing
DROPBOX
1. Why us? Why now?
2. Unmet/underserved need
3. Large and Growing Market
4. Sustainable Competitive Advantage
5. Scalable Business Model
VALIDATING IDEAS