Lean Day 2015: The Most Important Lessons

Last Tuesday, Jean-Pierre Vuilleumier, the Managing Director of CTI Invest, to the first Lean Day loaded. Thanks to Jean-Pierre I had the opportunity to take part in Lean Day and Ash Maurya, the author of the successful book Running Leanto experience live. I already wrote in the summerthat the lean startup concept is still largely unknown in Switzerland. That's why I'm summarizing some important learnings in this post.

Consistently test the riskiest assumptions

In his presentation, Ash highlighted the importance of targeting a large enough market, as VCs typically seek a $100 million exit. Consequently, the sales targets must be correspondingly high.

To this end, Ash suggests testing the plausibility of the target turnover in x years (e.g. 10 million turnover in 3 years). For a SaaS startup whose product costs USD 10 per month (i.e. USD 120 per year) and has a conversion of 10%, a total of 83,333 paying customers would have to be acquired over the three years and traffic of at least 830,000 visitors would have to be directed to the site, so rounded up, 280,000 visitors would be needed per year. Assuming that the customer lifetime value is 2 years, half of the customers will leave in the third year. The traffic required increases to 420,000 visitors per year in order to maintain the sales target.

Is this traffic somewhat realistic? Which assumptions are reliable and which are not? A conversion rate of 10% is probably too optimistic and should be checked as quickly as possible. The hypothesis can already be achieved with a minimum viable product (MVP) and low traffic H1: Conversion Rate = 10% be checked. If the assumption is not reliable, the calculation must be carried out again with a lower conversion. Is the traffic that can be achieved with a conversion of 5% still realistic?

Even if you already know the procedure from "Running Lean", it is very helpful to practice using a practical example The riskiest assumption needs to be checked first. It is often not easy to identify the riskiest assumption and create an experiment with a clear, measurable hypothesis.

Focus on individual KPIs vs. monitoring the entire startup

In the startup scene they have AARRR Pirate Metrics by Dave McClure, and Ash also suggests monitoring the customer lifecycle with a (precise) key figure:

Acquisition: How do users become aware of the startup?

Activation: Are the users' first impressions good?

Retention: Do users come back?

Revenue: How does the startup generate sales?

Referral: Do users recommend the startup?

If one of these metrics falls short of the set targets, the startup must fully focus on this problem and look for ways to improve the metric. The specific measures are very individual and can be quite profound depending on the stage. The art is to On the one hand, to isolate and fix the weakest link in the chain, and on the other hand to keep an eye on the other KPIs.

A minimum viable product is always possible

On Lean Day I heard the statement several times that one's own project or product was so complex that no minimum viable product could be designed. I, on the other hand, am firmly convinced that you can always create an MVP if you are willing to extract the essence of the product. This process can be very stressful, and surprising solutions are often found. At the end there should be a usable product core so that you can test with real customers whether your own hypotheses are correct.

Minimum Viable Product: Build a slice across, instead of one layer at a time. #mvp /cc @aarron @benhyphenrowe pic.twitter.com/0koefYMrpf — Jussi Pasanen (@jopas) September 26, 2014

The term MVP is often misunderstood. An MVP is not a half-finished product, but a fully usable product in which not all features are yet integrated. Jussi Pasanen's pyramid representation sums up the MVP well. For example, the MVP for a restaurant could be a fast food truck that tests different menus in different locations.

I would be happy to help you find your minimum viable product, advise you on the introduction or implementation of the lean startup process, or give a presentation on the topic. I'm happy about Your contact or your comment here in the blog!