Growth hack for startups

©2015 StratAlign Group 1

Growth Hacking For Lean Startups

©2015 StratAlign Group

Agenda

• Lean startup 101

• Why growth hacking?

• Growth hacking tools

• Growth hacking concepts

• How to hack growth


LEAN STARTUP 101



Steve Blank’s Stages



Problem/Market Fit

Solution/Market Fit

Product/Market Fit

Revenue Growth

Profit


Problem/Market Fit

Solution/Market Fit

Product/Market Fit

Revenue Growth Profit

One Metric That MattersValidated/Invalidated Hypotheses

GoalValidate a morphine problem for a specific target market

Exit Criteria• Customer archetype(s)• Validated morphine problem• Understand how the customer is solving the problem now• Market size• Organization chart and influence map (B2B)

Other Key Metrics• # of customer interviews

Business Model CanvasCustomer Segments, Value Proposition


Problem/Market Fit


Problem/Market Fit

Solution/Market Fit

Product/Market Fit

One Metric That MattersValidated/Invalidated Hypotheses

GoalDetermine the minimum features that solve a morphine problem for a specific target market

Exit Criteria• Customer archetype(s)• Minimum feature set to solve the customer’s problem• Understand what and how the customer is willing to pay to solve the problem• Market size (revised)• Have a set of customers who are willing to pay now

Other Key Metrics• # of customer interviews

Business Model CanvasCustomer Segments, Value Proposition, Revenue Model



Solution/Problem Fit


Problem/Market Fit

Solution/Market Fit

Product/Market Fit

One Metric That MattersChurn rate

GoalEngaged, paying customers who have a churn rate less than 5% monthly

Exit Criteria• Churn rate is less than or equal to 5% monthly

Other Key Metrics• WAU (Weekly Active Users)• MAU (Monthly Active Users)• Cohort analysis by activity• Long term cancellation rate

Business Model CanvasCustomer Segments, Value Proposition, Revenue Model, Customer Relationships



Product/Market Fit


Problem/Market Fit

Solution/Market Fit

Product/Market Fit


One Metric That MattersWOWG (Week Over Week Growth)

GoalConsistently grow revenues

Exit Criteria• WOWG is greater than or equal to 5%

Other Key Metrics• ARPU (Average Revenue Per User)• Churn rate • WAU/MAU• Activation %• Time to conversion• Referral rate

Business Model CanvasCustomer Segments, Value Proposition, Revenue Model, Customer Relationships, Channels


Revenue Growth


Problem/Market Fit

Solution/Market Fit

Product/Market Fit


One Metric That MattersProfit Margin %

GoalOperationalize the product to get to profitability

Exit Criteria• The product is profitable and has a high growth rate

Other Key Metrics• CAC (Customer Acquisition Cost)• LTV (Life Time Value)• ARPU (Average Revenue Per User)• MRR (Monthly Recurring Revenue)• LTV to CAC ratio• Months to recover CAC• COGS/customer (Cost Of Goods Sold)• Time to breakeven

Business Model CanvasFull canvas


Profit


WHY GROWTH HACKING?


Problem/Market Fit

Solution/Market Fit

Product/Market Fit

Revenue Growth

Profit


You discovered a target market who has that problem


You have found a really painful problem


You have created a solution that customers tell you really solves the problem


So, you build your MVP and invite your first customers to use it


The customers sign up and become activated


Then what happens?


Nothing


So, you buy some AdWords and get more sign ups. Then, what happens?


0

0.2

0.4

0.6

0.8

1

1.2

1 2 3 4 5 6 7

Product Usage


Why?


Your product sucks


The Trough of Sorrow


Most startup founders

focus heavily on product but

most of a startup's risk lies in distribution

Dave McClure


Marketing

CustomerDevelopment

Data

GrowthHacker


Growth Hacking Tools


Install Analytics


Google Analytics is Worth What You Pay For It

People, not page views, buy software


Analytics Tools


Email

You will want to be able to A/B test, track opens and click through’s


Triggered Email


Chat

Talk to your customers in real time


SMSIf your customer is a Millennial, they prefer texting


Website Tours


App Notifications

If you have a mobile app, you can use push notifications to engage your customers


In App Interventions


GlueApps that put all the pieces together


Growth Hacking Concepts



AcquisitionBring prospective customers to your site


ActivationSign up


RetentionEngage users


Referral


A/B testing

LinkBaitPro

Get Started

LinkBaitPro

Get Started

A B


What to/Not to Test

LinkBaitPro

Get Started

For recreational use only. Do not staple or paper clip. All models over 18 years of age. Prize not redeemable for cash value. If condition persists, consult your physician. No user-serviceable parts inside.

Test theHeadline

Image vs.Video

Call to actiontext and color

Don’t spend alot of timetestingthe copy


Events

1. Login

2. Upload Photos

3. Tag Photos

4. Share Photos

5. Comment on Others Photos


Don’t Focus on Acquisition When Activation and Retention are Low

Visited Site Signed Up Activation Billed

2,177

14 3 1

0.6% 21.4% 33.3%0.0%


Cohort Analysis


Track Events Across Cohorts


The One Metric That Matters

At least 7 friends within 10 days of signing up

Getting a new user to link a device and add a file

Once a user follows 30 people, they’re more or less active forever

If someone comes back a day after signing up for a game, that is a leading indicator of them becoming an engaged and paying user.


Post Launch Stages

1. Product/Market Fit

USER

DISENGAGE

D USER

ENGAGED

USER

REACTIVAT

ETRIAL OVER

PAYING

CUSTOMER

DISSATISFI

ED

RESOLUTIO

N

DISENGAGE

D

REACTIVAT

E

CANCEL CANCELACCOUNT CANCELLED OR

BILLING INFO EXPIRES

Free userdisengagement

PaidConversion

SupportData

ReactivatonRate

FreemiumChurn

TrialAbandonment

Rate

Disengagement


Post Launch Stages


2. Revenue Growth

USER

DISENGAGE

D USER

ENGAGED

USER

REACTIVAT

ETRIAL OVER

PAYING

CUSTOMER

DISSATISFI

ED

RESOLUTIO

N

DISENGAGE

D

REACTIVAT

E




PaidConversion

SupportData

ReactivatonRate

FreemiumChurn

TrialAbandonment

Rate

Disengagement

PAID DIRECT SEARCH WOM

Customer Acquisition Cost

VISITOR

FREEMIUM/

TRIAL

OFFER

ENROLLME

NT

Long funnel health

INHERENT

VITALITY

INVITE

OTHERS

Viral coefficientViral rate


Post Launch Stages


2. Revenue Growth

3. Profit

USER

DISENGAGE

D USER

ENGAGED

USER

REACTIVAT

ETRIAL OVER

PAYING

CUSTOMER

DISSATISFI

ED

RESOLUTIO

N

DISENGAGE

D

REACTIVAT

E




PaidConversion

SupportData

ReactivatonRate

FreemiumChurn

TrialAbandonment

Rate

Disengagement

PAID DIRECT SEARCH WOM


VISITOR

FREEMIUM/

TRIAL

OFFER

ENROLLME

NT

Long funnel health

INHERENT

VITALITY

INVITE

OTHERS


UPSELLING

CAPACITY

LIMIT

FORMER USERS FORMER CUSTOMERS

Tiering

UpsellingRate

Unpaid Churn Rate Paid Churn Rate

User Lifetime Value Customer Lifetime Value


Post Launch Stages

1. Stickiness

2. Traffic

3. Revenue

PAID DIRECT SEARCH WOM INHERENT

VITALITY


VISITOR

FREEMIUM/

TRIAL

OFFER

ENROLLME

NT

USER

INVITE

OTHERS

DISENGAGE

D USER

ENGAGED

USER

REACTIVAT

ETRIAL OVER

PAYING

CUSTOMER

UPSELLING

CAPACITY

LIMIT

DISSATISFI

ED

RESOLUTIO

N

DISENGAGE

D

REACTIVAT

E



FORMER USERS FORMER CUSTOMERS

Long funnel health


PaidConversion Tiering

UpsellingRate

SupportData

ReactivatonRate

FreemiumChurn

TrialAbandonment

Rate

Disengagement

Unpaid Churn Rate Paid Churn Rate

User Lifetime Value Customer Lifetime Value



• Measure engagement

• DAU/WAU –What does active mean?

• Segment

• New Functionality

• Does it improve stickiness?

• How do we measure that?

• Lazy registration

Stickiness


10X Product Launch


How to Hack Growth


It’s ALL About Onboarding


1. Find Out Why

Talk to your customers


2. Determine Your Hypothesis on What Engaged Behavior Looks Like

Are your customers solving their problem?

What is the definition of engaged for your product?


Get a Baseline

Signed Up Login Uploaded Photos

TagPhotos

2,177

366

413

16.8% 11.2% 7.3%0.0%


Create a Dashboard


3. Create an Intervention and Do It




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Hey {{ first_name }},

I'm James, CEO of Bugsnag. I wanted to reach out to see if you need any help getting started.

Cheers,

James

Surprise Personal Email


Bad

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Props to Segment.io


The Last Email You Will Ever Send

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In App Intervention



4. Perform a Cohort Analysis


5. Analyze the Results


6. D.C. al Fine

Create a Hypotheses

Measure the Results

Test the Hypotheses

With an Intervention

Proceed, Pivot, or

Punt


Questions