This document summarizes a class for fellows that covered the following topics: - A discussion of the previous week's reading and homework assignment - A lecture on product and marketing from founders of successful startups - Advice on building minimum viable products (MVPs) and using metrics to iterate and improve products rapidly - Examples of different business models and tips on scaling early with brand partnerships from the founder and COO of Crowdtwist

1. 1
FELLOWS CLASS #3
DECEMBER 4TH, 2014

2. IN TODAY’S CLASS... 2
• LAST WEEK’S READING / VIDEO
• HOMEWORK #2 TIPS: DILIGENCE - PRESENTED DECEMBER 12TH
• PRODUCT / MARKETING LECTURE
• REAL WORLD PERSPECTIVE: JOSH BOWEN, CROWDTWIST
• QUESTIONS

3. HOMEWORK #2: DILIGENCE 3
TELL A STORY:
YOU KNOW HOW WHEN... THE PROBLEM
WOULDN’T IT BE GREAT IF... THE GAP / INEFFICIENCY
WELL, WE CREATED.... THE SOLUTION

4. 4 HOMEWORK #2: DILIGENCE
IDENTIFYING THE MAJOR PLAYERS / COMPETITION:

5. PRODUCT & MARKETING
5
“A STARTUP IS A TEMPORARY ORGANIZATION IN
SEARCH OF A SCALABLE, REPEATABLE, PROFITABLE
BUSINESS MODEL”
-­‐
STEVE
BLANK
SERIAL
ENTREPRENEUR,
FOUR
STEPS
TO
EPIPHANY

6. 6
PRODUCT & MARKETING
“A STARTUP IS A HUMAN INSTITUTION DESIGNED TO
CREATE A NEW PRODUCT OR SERVICE UNDER
CONDITIONS OF EXTREME UNCERTAINTY”
-­‐
ERIC
RIES
FOUNDER,
THE
LEAN
STARTUP

7. 7
MARKET / CUSTOMER
“SO OFTEN PEOPLE ARE WORKING HARD AT THE
WRONG THING. WORKING ON THE RIGHT THING IS
PROBABLY MORE IMPORTANT THAN WORKING HARD”
-­‐
CATERINA
FAKE
FOUNDER,
FLICKR,
PINWHEEL

8. 8
MARKET / CUSTOMER
“BE A USER OF YOUR OWN PRODUCT. MAKE IT BETTER
BASED ON YOUR OWN DESIRES. BUT DON’T TRICK
YOURSELF INTO THINKING YOU ARE THE USER”
-­‐
EVAN
WILLIAMS
FOUNDER,
TWITTER,
MEDIUM

9. 9
MARKET / CUSTOMER
YOU’VE DONE SOME RESEARCH, IT’S TIME TO TEST YOUR IDEA:
HIT THE STREETS!
“THERE ARE NO FACTS INSIDE THE BUILDING, SO GET
THE HECK OUTSIDE!”
-­‐
STEVE
BLANK
SERIAL
ENTREPRENEUR,
FOUR
STEPS
TO
EPIPHANY

10. THE MVP:
PRODUCT 10
BUILD
MEASURE
LEARN

11. PRODUCT 11

12. PRODUCT 12
VALIDATED LEARNING:
• FAIL FAST
• FAIL CHEAP
• ADDRESS KEY RISKS UPFRONT
• LET THE DATA TELL A STORY
TEST HYPOTHESES

13. PRODUCT 13
“IF YOU’RE NOT EMBARASSED BY YOUR FIRST LAUNCH,
YOU LAUNCHED TOO LATE”
-­‐
REID
HOFFMAN
FOUNDER,
LINKEDIN

14. PRODUCT 14
THIS WAS NOT BUILT IN A DAY

15. PRODUCT: MVP 15
START WITH THE SIMPLEST POSSIBLE IMPLEMENTATION:
• GROUND UP: FINE TUNE BASIC FEATURES
• CREATE ACTIONABLE METRICS
• DEMONSTRATE CAUSE AND EFFECT
• LISTEN AND LEARN FROM CUSTOMERS

16. BUILDING A MVP 16
FROM MVP…
…. TO TODAY

17. 17 BUILDING A MVP
FROM MVP…
…. TO TODAY

18. 18 BUILDING A MVP
FROM MVP…
…. TO TODAY

19. 19 BUILDING A MVP
LEARN FROM METRICS
• ITERATE
• PIVOT
• SPLIT (A/B) TEST
• CONTINUOUS DEPLOYMENT

20. BUILDING A MVP 20
KANBAN
• VISUALIZE WORK
• LIMIT WORK IN PROCESS
• FOCUS ON FLOW
• CONTINUOUS IMPROVEMENT
LEAN MANUFACTURING

21. PRODUCT / METRICS 21
STARTUP METRICS ARE OPERATIONAL, NOT FINANCIAL
• WEBSITE TRAFFIC (E.G. PAGEVIEWS, UNIQUES, TIME SPENT, ETC.)
• USER REGISTRATIONS
• USER ACTIVATIONS
• DAILY ACTIVE USERS (DAU)
• MONTHLY ACTIVE USERS (MAU)
• PAYING CUSTOMERS
• MONTHLY REOCCURRING REVENUE (MRR)
• CHURN
• RETENTIONS: 30+, 90+ DAYS
• LIFE TIME VALUE (LTV)
• REVENUE PER USERS (RPU)
• VIRAL COEFFICIENT

22. PRODUCT METRICS 22
LARGE COMPANIES NEED FINANCIAL TOOLS TO MONITOR HOW
WELL THEY ARE EXECUTING A KNOWN BUSINESS MODEL....
... AND STARTUPS NEED METRICS TO MONITOR HOW WELL THE
SEARCH FOR A BUSINESS MODEL IS GOING.
TO ULTIMATELY ANSWER THE BURNING QUESTION:
IS THIS BUSINESS MODEL WORTH SCALING INTO A COMPANY?

23. TYPES OF BUSINESS MODELS 23
STANDARD BUSINESS MODELS:
• AD-SUPPORTED (BRAND PARTNERSHIPS)
• PAID (SUBSCRIPTION / ONE-TIME)
• IN-APP PURCHASES
• FREEMIUM
• FREE (TEMPORARILY...)
• LICENSING

24. SCALING EARLY WITH BRANDS 24
EARLY STAGE COLLABORATION WITH BIG BRANDS
PROS:
• EARLY PROOF OF CONCEPT (VALIDATION)
• BUILD A BETTER MOUSETRAP
• POTENTIAL TO DISCOVER NEW USE CASES
OR REVENUE STREAMS
• BRANDS (SOMETIMES) LOVE FIRST MOVER
ADVANTAGE
• PRESS OPPORTUNITIES
• BARTER PILOT COSTS FOR INCREMENTAL
EXPOSURE (E.G. FACEBOOK POSTS, EMAIL
CONS:
• PARTNERSHIPS CAN CAUSE DISTRACTIONS
• REQUIRE SIGNIFICANT BANDWIDTH
• PILOTS ARE TYPICALLY LOW/NO REVENUE
• OFTEN SLOW TO EXECUTE

25. SCALING EARLY WITH BRANDS 25

26. REAL WORLD PERSPECTIVE 26
FOUNDER SPOTLIGHT!
JOSH BOWEN
• CO-FOUNDER AND COO
• TECHSTARS NYC GRADUATE
• 15 YEARS IN SOFTWARE AND DIGITAL MEDIA
• CORNELL UNIVERSITY: ELECTRICAL
ENGINEERING

27. NEXT WEEK... 27
• HOMEWORK ASSIGNMENT #2 DUE!
• MEETINGS WITH VENTURES TEAM
• MARVIN LIAO, PARTNER FROM 500 STARTUPS
• CLASS WILL GO UNTIL 130P (OPTIONAL TO STAY LATER)