Blue ocean startup 101 - Intro

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Blue Ocean Startup recognizes that Innovation on its own is not enough, but rather that Innovation + Execution = Success. To achieve that we combined the two best methodologies on each: Blue Ocean Strategy (Innovation Without Competition) and Lean Startup (Execution) to allow companies to accelerate revenues through innovation.

Text of Blue ocean startup 101 - Intro

Blue Ocean Startup:

Gil Rachlinwww.linkedin.com/in/gilrachlin@gilrachlinwww.blueoceanstartup.comhttp://www.skillshare.com/profile/Gil-Rachlin/5240900

Innovation + Execution = Success

Blue Ocean Startup

Lean StartupRiesEric

Blue Ocean StrategyMauborgneRene/W. Chan Kim

Blue Ocean Startup?

Innovate ExecuteLean Startup

RiesEricBlue Ocean Strategy

MauborgneRene/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 strategyFocus Split

Clear differentiationfrom 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 Cycle5

Innovate - Build Measure Learn

Ideas/BOS

InnovationBuild /Resources

Learn /Insights Two Hypothesis: Value CreationHypothesis - BOS Growth EngineHypothesis / 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 LineMeasure /Metrics

Data /Reports

From Lean Startup Loop

Two Hypothesis: Value CreationHypothesis - BOS Growth EngineHypothesis / 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 Up5%0.5Retention: Come Back4%0.3Referral: Invite Friends11%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?

NetflixRepeated Blue Ocean:- Subscription (no late fees)- Online Streaming

- Blue Ocean Startup-

Remember:

Innovate Execute Repeat

Remember:If you get over the hill, youll begin to pick up speed!!!

11- Blue Ocean Startup-

Remember:If you get over the hill, youll begin to pick up speed!!!

Stay Hungry, Stay Foolish!Steve Jobs.

Thank you!!!!Gil Rachlin.

Contact Info: 646.580.0058gil@blueoceanstartup.comwww.linkedin.com/in/gilrachlin@gilrachlin

Site: www.blueoceanstartup.comFree Gift: www.scanbizcards.com/promo/gilComing Classes:

http://www.skillshare.com/profile/Gil-Rachlin/5240900

Question????Thank you!!!!Gil Rachlin.

Contact Info: 646.580.0058gil@blueoceanstartup.comwww.linkedin.com/in/gilrachlin@gilrachlin

Site: www.blueoceanstartup.comFree Gift: www.scanbizcards.com/promo/gilComing Classes:

http://www.skillshare.com/profile/Gil-Rachlin/524090012- 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 andUsage learning Availability for users (oneplace to find all) UI, Browse, Search

Example: Apple iTunes ERRC Elements

NewValueCurve

14

Raise: Best Sound Quality Control on Usage andUsage learning Availability for users (oneplace to find all) UI, Browse, Search

Reduce: Price per song (+Try Beforeyou buy)

Create: Complement with iPod/Mac Liberal Licensing todownload 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 serviceetc.

Customer Analytics Customer behavior to optimize services forcustomers and dealers.

Marketing Analytics Keyword bidding to improve performance andreduce 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 serviceetc.

Customer Analytics Customer behavior to optimize services forcustomers and dealers.

Marketing Analytics Keyword bidding to improve performance andreduce costs

Weblog data to offer additional services etc.

Important tips: Marketing Goal

- Not reduced cost acquire customers and maximize yourprofits

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