Metrics for Startup Success and Failure
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Metrics that Matter Defining startup success and failure Hiten Shah Customer and Business Development Class at Berkeley • Mar 9, 2010
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A talk I gave at the Customer and Business Development Class at Berkeley taught by Steve Blank and Eric Ries.
Transcript of Metrics for Startup Success and Failure
Metrics that MatterDefining startup success and failure
Hiten ShahCustomer and Business Development Class at Berkeley • Mar 9, 2010
The Startup PyramidThe Race to the Top
Product / Market Fit
Transition to Growth
Growth
Sean Ellis: Startup-Marketing.com
• Low burn, focused on product, no VPs / sales people
• Customer Development (Steve Blank, Four Steps)
• Minimum Viable Product (Eric Ries, The Lean Startup)
• Pivots (Eric Ries, The Lean Startup)
Product / Market Fit
…the life of any startup can be divided into two parts – before product/market fit and after product/market fit.”Marc Andreesen, Founder of Netscape
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• It’s all about learning and discovery
• Outlined by Steve Blank in Four Steps to the Epiphany
Customer Development
• Coined by Eric Ries as part of The Lean Startup
• Lean Startups are a series of MVP’s
• Each designed to answer a specific question (hypothesis)
Minimum Viable Product
The minimum viable product (MVP) is often an ad on Google. Or a PowerPoint slide. Or a dialog box. Or a landing page. You can often build it in a day or a week.”Nivi, Venture Hacks
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If Apple can launch a smartphone without Find or Cut-and-Paste, what can you cut out of your product requirements?”Lance Glasser, former CTO KLA-Tencor
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The first version of Gmail was literally written in a day”Paul Buchheit, Google / Friendfeed / Facebook
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• Segment pivot - existing product, different customers
• Customer problem pivot - same customers, different problem
• Feature pivot - pick a feature and reorient around it
Pivot
The idea that successful startups change directions but stay grounded in what they've learned.”Eric Ries, The Lean Startup
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• 40%+ of users say they would be “very disappointed”
• Representative of a large enough target market
• Use Survey.io to get started
Product / Market Fit MetricsCreated by Sean Ellis (12in6)
Sean Ellis: Startup-Marketing.com
• Positioning - optimize first user experience via messaging
• Economics - implement a business model
• Optimization - track and report on the right metrics
Transition to Growth
Once you have achieved product/market fit, it’s time to accelerate through the next steps of the pyramid and then begin scaling your business.”Sean Ellis, 12in6
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First Product IterationTarget Customer: Social Application Developers
Pivot 1Target Customer: Many customer types
Pivot 2Target Customer: 1 specific customer type
“Metrics are people, too”Eric Ries, The Lean Startup
Test Things for Yourself!
Passionate about helping other entrepreneurs and startup people.”
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Thank You!
