Startup Turkey 2016 - Sam Mallikarjunan

SamMallikarjunanHubSpot

The FIRST Framework For Growing a Successful

Startup

Sam Mallikarjunan

Head of Growth@HubSpot Labs

Sam @Mallikarjunan

4

Audience Analytics Calibration Applaud if you like any of these things

Applaud if you like

Applaudif you have a

smartphone.

I have to compete with every piece of content ever created by anyone anywhere.

20 For the rest of this time,

When youSo do you.

leave this room,

It wasn’t

Alwaysthis way.

New Technologies Come

Innovators Early Adopters Early Majority Late Majority

10%

40% 48%

1%

Laggards

1%

“The Chasm” Area under the curve represents number of customers

Our included country mapsYour great subtitle in this line

We are still only at the beginning of

the greatest global transformation of

our lives.

DISRUPTIVE INNOVATION

DISRUPTIVE INNOVATION MODEL

Disruptor

Disruptee2 31 4 5 6 7

Personal computers

Mini mills Cellular phones Community colleges

Discount retailers

Retail medical clinics

Phonographs

Mainframe and mini computers

Integrated steel mills

Fixed line telephony

Four-year colleges

Full-service department

stores Traditional doctor’s offices

Pianos

1877Edison invents the phonograph

1914$56M1905

400,000 pianos produced

1944Steinway produces caskets with excess wood

1919$158M

Not a disruptive innovation

Solve a niche problem at the low-end of a market that brings in new market participants.

1. Same price, all the time.

2. Highly variable quality.

1. Almost perfectly efficient price marketplace that adapts to supply and demand.

2. Better experience for riders and drivers with dual-ratings system.

A disruptive innovation

We live in an era of big bang disruptive innovation.

Rogers Market segments

Innovators Early Adopters Early Majority Late Majority Laggards

Trial usersVastMajority

Big bangMarket segments

Jobs-to-be-done

Step 0: Define the

User Assumption

“As an x I want to y so that I

can z.”

No one wants a ¼ inch drill bit.They want a ¼ inch hole.

The Kodak Moment Went BankruptKodak Went Bankrupt

“We don’t want to stop the disruption, we want to find a way to become the disruptors!”

F Fake it.

I Iterate.

R Retain.

S Scale-up.

T Test.

Tell people it exists now

Animated explainer video

Landing page to generate

sign ups

Button in an existing user

interface

Crowdfunding campaign

0102

0304

05St

ep 1

: Fak

e It.

Rig

ht A

way

06 07 08Wizard of Oz Horrendous

prototype. Really bad. Barely functional.

Get cash. Any cash. From

anyone. For the thing.

Eric Ries’ new book Fortified Bicycles

03Landing page to generate

sign ups

Button in an existing user

interface

04

06Wizard of Oz

“Pay no attention to the man behind the curtain."

Step 2: IterateBased on feedback

from faking it, make small changes and continue to test.

Don’t chase big deal cash.I quit HubSpot for 87 days to work at an

agency. Worst professional experience ever.

Eric Ries: “Every once in a while, startups do literally need cash to keep the lights on, but

this is more rare than founders think. Usually, they just want some extra cash to

have a little extra cushion. That's not a good enough reason to create a lot of waste

IMHO.”

Draw lines in the sand early.

Ask. For. Help.Add slide about this presentation in

there. HubSpot B&B team could do it well but expensively and slowly, I could

do it quickly but not as well, a freelancer can do it more quickly and much better.

Work to Product/Market Fit. Many have written on this amorphously defined

delineation, and there’s no single measurable point.

Step 2: Iterate

Step 2: Iterate

You can and should ask for help.

This is sort of wrong.

Marc Andreesen: A couple years ago Marc wrote the following on his blog: “…the life of any startup can be divided into two parts – before product/market fit and after product/market fit.” He goes on to write: “When you are BPMF, focus obsessively on getting to product/market fit. Do whatever is required to get to product/market fit. Including changing out people, rewriting your product, moving into a different market, telling customers no when you don’t want to, telling customers yes when you don’t want to, raising that fourth round of highly dilutive venture capital — whatever is required.”

PMF can change.

How to know when you’ve found product/market fit

Eric Ries: “If you have to ask, you haven’t.”

Scot Chilsom: “If your site goes down, pay

careful attention. If your customers start calling

and emailing in a panic, you’ve probably found

product-market fit. If the phones are silent, keep

trying.”

Sean Ellis: “40% of users say they would be very

disappointed if your product went away”

Alex Schultz: “Look at the curve, ‘percent monthly

active’ versus ‘number of days from acquisition’. If you

end up with a retention curve that is asymptotic to a

line parallel to the X-axis, you have a viable business

and you have Product/Market Fit for some

subset of a market.”

1

2

3

4

Product B Does NOT Have P/M Fit

Product A

Product A HasProduct/Market Fit

% Active

Time

Retention Curve

Product B

0%

25%

50%

75%

100%

Just as important as knowing why customers started using your product is knowing why they stopped.

Step 3

MAU vs. WAU vs. DAUDefining “Active User” properly is incredibly important.

Once you find that fit, then you have to make sure that people continue using your app.

OnboardingValue messagingSegmented New User ExperienceReactivationCreate habits

Don’t try to get your square peg customers to love your round hole product, find round hole customers or build a square peg product.

You can out grow churn for a long time.

Step 3: Retention

According to the Harvard Business School, increasing customer retention rates by 5 percent increases profits by 25 percent to 95 percent.

1. What integral trigger is the product addressing

2. What external trigger gets the user to the product

4. Is the reward fulfilling, yet leaves the

user wanting more?

5. What “bit of work” is done to increase

the like hood of returning?

3. What is the simplest behavior of anticipation of

reward

Nir Eyal’s Hook Canvas

Trigger

Investment

Reward

Action

1. Email Notification 2. Collecting lonesome,

seeking connection…Log in

Pin, Re-pin, like, comment

Communication(Tribe)

T

I

A

VR

01

02

03

04M-SPOT

Perfection is the enemy

Break apart the model that’s working, isolate the individual components of growth, and focus focus focus.

Equally important as what you’re going to do is what you’re going to omit

Once you’ve found fit, grow as fast as you can

Step

4: S

cale

05 Parents play an important role:Cash Flow Is More Important Than Your MotherGrowth Is More Important Than Your Father

Grow What You Can

+4000% Growth

+250% Growth

Focus on growing things you can

make a reasonable impact on

Jeff Bezos wasn’t the best CEO in the world because he ran a profitable business. He delivered the best shareholder returns. In the modern world, the primary engine of this is growth in enterprise value.

Profit isn't the only goal of business. You want to grow.

70% 80% 90% 100%

Disc

ount

ed ca

sh

Time

Max Cash Consumed

Investment Period

PaybackPeriod

ProfitPeriod

Step 6+: Testing

Use the same iterative

experimental process to improve your core

values and explore others.

Organized, methodical approach to

growth experimentation

Always Be Testing

historyWe live in the one of the most

of commerce.

interesting periods in the

55

new within the last decade

1000 are >70%

of businesses on the US Fortune

Thank You!