Monday, April 05, 2010

Startup basics - Sean Ellis

1. Market Fit
"If you’re targeting small business owners or sole proprietors,
I believe it’s better to keep your product free until you find the product/market fit. I would however
recommend creating a formal beta program where the company locks in a 50% discount in exchange for certain commitments (like a 15 minute interview and monthly surveys). They should understand that they can use it for free during the beta period, but if they want to continue using it after the beta finishes, they’ll need to buy."

The “40% very disappointed” metric

" least 30 responses, which is where I start to see results stabilize. Of course more responses is better."


Notes based on the principles espoused by Sean Ellis

Pre - evalution of idea

Does this product/service as spec’d solve a problem or a need customers have?” Is our solution compelling enough that they want to buy it or use it today? Steve Blank

Day 1 - VALILDATE Minimum Viable Product (MVP)
problem exists?
is it worth solving?
minimum set of features to solve it
- then meet prospects

Where’s the Love? “the flock always finds the best grass.” Vinod Khosla
Start looking for a signal about who loves your product and why as soon as you release your MVP
Most products have at least a few people that truly consider it a must have. These people hold the keys to the kingdom.
Learn everything you can about them including their specific use cases and demographic characteristics. Try to get more of these types of people.

Expose the Core Gratifying Experience
find core user perceived value and exposing it in messaging optimized for response.
remove complexity from the initial user experience and messaging in order to highlight this core user perceived value.


Start Charging

Extreme Customer Support
first marketing expense should be to expand the customer support team.
Anyone that cares enough about your solution to contact customer support is a great source of insight about your target market.

Brand Experience Over Brand Awareness
most entrepreneurs understand that brand awareness campaigns are a waste of money for startups
Instead, it’s much cheaper and more effective for startups to focus on creating a fantastic brand experience.

Driving Growth
CEOs must take an active role in driving customer growth whether or not they have an interest in marketing.
It’s important to stay aggressive and take all slack out of the market.

Business building
Fast growing businesses are difficult to manage. This is the point where you should bring in some experienced operations people if they aren’t already on the team.

1. Determine Market fit
1.1 Create a free or beta program of your product - get at least 30 users for feedback
use to assess at least 40% of users saying they would be “very disappointed” without your product.
x BAD response? engage existing and target users to learn how to make your product a “must have.”

2. Promise: Highlight the benefits described by your “must have” users (those that say they would be very disappointed without your product).
3. Economics: Implement the business model that allows you to profitably acquire the most users.
4. Optimize: Streamline a repeatable, scalable customer acquisition process by testing multiple approaches and tracking to improve the right metrics.

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