Syllogistic Software

Lean Startup Metrics: AARRR!!!

2012-07-16T06:31:00.001-04:00

I wrote a bit about Lean Startup Metrics last year after attending a Lean Coffee TO session.

One particularly useful framework is "Startup Metrics for Pirates" from Dave McClure.

His popular "AARRR" model suggests segmenting your metrics into:

Acquisition
Activation
Retention
Referral
Revenue

I decided to crunch about 13 months of data from my project management software startup PMRobot.

Here's what I found:

My Analysis

An 13% signup conversion rate seems awesome! -- until you look at activations.
The first column shows very clearly how many people you need to put into the funnel at the top to get revenue out at the bottom. It's often more than you think!
Breaking down the step to step rates is critical -- it lets you see at a glance where you're losing people.
We still have a lot of work to do helping users activate. We've been simplifying the interface and adding inline help. What else would you suggest?
Our retention is not as good as I would hope. Would you recommend exit interviews to find out why the left?

What do you think? What else can we learn from this data?

A few side notes about the chart:

Conversions from step to step read diagonally -- ie. Activation -> Retention is 12.82%.
The first column is the absolute conversion rate from all new visitors.
The numbers are a bit misleading since signups are per user and activation/retention/revenue is per organization (which could include many users)
This includes data only for customers acquired through the website.
Therefore, it excludes my two largest revenue-generating customers, since they were converted by face-to-face meetings.
"Activation" is an in-app metric corresponding roughly to "actually using the product for something real" -- as opposed to just putting in test data.
"Retention" indicates long-term frequent users -- the ones that are "hooked" :)
"Revenue" are customers that are currently on monthly credit card billing.

About the author: Jason Hanley is a software developer, project manager, world traveler, and a private pilot. He spends his time trying to make project management for software consulting companies easier, and just plain better.

Lean Coffee: Pirate Metrics and Customer Feedback

2011-12-01T11:42:00.001-05:00

Great little Lean Coffee session this morning at Big Bang. My notes:

How do you decide what to build?
AARRR!

Acquisition: Signups
Activation:

Subjective: 1 post, 2 posts, a series of events?

Retention

How many coming back every X days, X months
"Active users"

Referral
Revenue

Example: How many signups per blog posting?
Focus on one metric at a time -- for instance "how do we get people to activate?"
Activation phase: Need to focus on particular group/niche
What is that "painful" thing people need to do to set up

Switching costs

Revenue: What makes the highest profit?
Sometimes your metrics are wrong

For instance, are your activations _really_ activations?

Metrics: Are you tracking the "offline" parts of the experience?
Retention: Continued activations
It's not just one feature -- it's how they all fit together
Everyone has their one different "one thing"
You can divide into different users groups, and each one can have their own activation
Example metric for Basecamp: "User has a conversation"
You often have to sell to your customer multiple times
Activation metric should always be testing your _new_ users, not mixed up with existing users
What set of features provide the most value: to customer, to business
Which feature is causing us the most problems?
Start measuring first -- then set goals

SUPER BONUS!!! Live screenshots from PMRobot's custom dashboard.

You can have a look at the type of metrics we currently track.

Click to zoom in.

Recent signups: Note that contact information is right there so we can email for feedback quickly

"Active" users: Currently defined as created more than 7 days ago and logged in within past 7 days

More active users: We use highlighting and bold to show which ones are further along in the process

Organization dashboard: Shows a small subset of "key" accounts

Lean Coffee: Git Money!

2011-11-08T10:31:00.000-05:00

Some brief notes from this morning's "Git Money" Lean Coffee TO session at Big Bang:

No, this was not about Git :)
How do you validate whether someone will pay, before you even build the product?
Example: Coffee Shop owners

Biggest problem: How to get feedback from their customers
Made up rough wireframes and brought them to coffee shops
Asked for $20, promised working software by a certain date
In return, they got $200 of service
Reduced the discount rate as more customers signed up

Social proof made it an easier sale

Would this approach work for more expensive products?

Potentially -- Companies sell unfinished software all the time

Start with a discount, and reduce that discount over time
What is the product is really complicated?

Customers may ask to see more before handing over money
In that case, you may need to look to a different type of "visionary" customer

What if your product has an existing competitor?

All products have some type of competition (ie. the "do nothing" alternative, or other channels that might not be "direct" competition)

How much do you need?

Depends on how good a sales person you are
Might be able to see just based on a conversation
Otherwise, might need wireframes, working prototype, etc.

Future discussion topic: Customer Objections

Insane Apache FastCGI settings

2011-09-26T17:42:00.000-04:00

We recently moved PMRobot to a new server, configured very similar to the old one with WHM/CPanel.

The only major difference was a newer version of the Apache Web Server -- 2.2.21 vs 2.2.16.

Unfortunately, not long after the switch, reports started coming in that most attachments were not uploading. Only very small ones (less than 100K) seemed to work.

Since there were no recent changes to our attachment code, I started digging through logs to discover the source of the problem.

None of the usual error logs reported seemed to contain anything useful.

Finally I worked my down down to the root Apache error log and discovered this little gem:
[warn] [client ...] mod_fcgid: HTTP request length 137881 (so far) exceeds MaxRequestLen (131072), referer:

A nondescript little warning that thankfully led me to this post which solved the problem.

This person also seemed to have had the same problem.

The icing on the cake was the little warning at http://httpd.apache.org/mod_fcgid/mod/mod_fcgid.html#fcgidmaxrequestlen, which reads:

Warning: Before 2.3.6, this defaulted to 1GB. Most users of earlier versions should use this directive to set a more reasonable limit.

My question is WHY!?! Why did they reduce a 1GB default limit to 128K? Surely someone must have realized that havoc that might wreak, no?

In any case, if you encounter this problem, simply add the following to your Apache config:

<IfModule mod_fcgid.c>
 FcgidMaxRequestLen 1000000000
</IfModule>

and you should be good to go again.

Lean Coffee: Are ideas overrated?

2011-09-15T10:45:00.001-04:00

Had a great LeanCoffeeTO this morning at BNOTIONS with a lively discussion roughly summarized by the following points:

Startups have become very popularized

There's a trailer for an American Idol-type startup TV show

Problem with Lean: Doesn't really allow for "blue sky" thinking?
Ideas need to come at the right time

Only see a limited view at any given time snapshot

Is starting a "startup" different than starting a "business"?
Startups need to have a "grand vision"?
Treating Lean as "gospel" is dangerous
Process needs to be flexible
Lean and its process makes a great base for discussion
Very different environment for businesses now (vs late 90s/early 2000s)

Faster pace, easier technology

Value of ideas: Can turn any idea into "something"
Idea vs. vision

Idea is just a "spark" that can lead to a full vision

Twitter has evolved

Started by a failed podcasting company

Interviewing is hard
Lean process reduces risk

However -- Reducing the risk is not the same as getting to success?

Starting a startup not "sensible", the sensible thing is to get a job
Would benefit Ontario if health care software providers followed more Lean principles?

So the discussion took a few interesting turns along the way, but overall a very valuable session.

Great to see everyone and really looking forward to the upcoming one year celebration events.

Lean Coffee: Raising your first round

2011-09-08T13:27:00.000-04:00

I think I've been spending a few too many late nights coding PMRobot UI enhancements, as I had some trouble actually finding today's Lean Coffee Meetup.

I was running late due to the TTC, and the Meetup Android app hadn't updated the recently-changed location. So I wandered through an empty building trying to figure out where I had gone wrong.

Luckily somebody (who had obviously had more sleep) pointed me to the open door I had just walked past, and I was able to join in and take down some notes about raising investment:

The Canadian Angel investing community is not as established as in the US
Tech startups are getting more popular -- getting harder to find developers here
Canada is "a couple steps behind" but heading in the right direction
Investors are looking to invest immediately and get their returns in 5 years
Currently near the end of a 5-year cycle -- little money available
Something to check out: Angelist
Canadian companies get government matching and SRED, so big financial advantage
It's not beneficial to hold back on communicating the details of an idea
What is the right time to approach investors? Probably not the idea stage
Government grants, funding, etc. can work at the concept stage

Having solid market research can help with grants
There are grant writing companies who will help you apply for a cut of the cash

Board of advisors

Not easy to establish
What's in it for them?
Angels place a large value on your board

Angels tend to be on the team more than the idea

Glad I finally found everyone this morning. Next time I may need a pre-LeanCoffee coffee :)

See you then!

Lean Coffee: Vizualize.Me Case Study

2011-08-23T11:52:00.000-04:00

The summer has been busy, and I didn't think I'd be able to get back into Lean Coffee before September, but this session's topic was too good to pass up.

Eugene Woo from Vizualize.Me presented an amazing case study for the group.

Here are a some key notes from the discussion:

Won StartupWeekend, 2000 signups on the first day
Thousands of signups per day -- now over 100,000
After a month, decided to pursue it full-time
Did a "press push" about winning StatupWeekend, etc. but didn't really take
Made an Ashton Kutcher sample and pushed to blogs

Didn't really get much on the blogs
But major press picked up on it somehow
Led to articles on FastCompany and Mashable

"You don't learn when you're building"
No mockups, built a working prototype quickly

Important for learning -- wouldn't learn the same things with a mockup

Customer development can be depressing, but is also exciting

Priorities are not clear, but at least you know the problems

1-3 months away from "true" MVP
So far 100% equity, seeking a seed round
10 or so competitors have emerged

So far they have a huge branding head start

50% conversion rate from signup list, 15-20% fill rate for Wufoo survey
Lots of wrong assumptions and learning: eg. Thought people wouldn't need to edit inline
At least 5 phone calls per week, lots of email and surveys
Use MixPanel for data collection

Started out collecting everything, but now focusing on a few key metrics at a time

Biggest potential competition: If LinkedIn builds similar capability
Jobs market is ripe for disruption
Best source of leads/signups: LaunchRock, Twitter

Thanks again Eugene for sharing, and looking forward to see Vizualize.me continue to grow and evolve!

Lean Coffee - Entries and Exits

2011-07-07T11:57:00.000-04:00

Today we discussed various Lean ways to enter and exit business ventures.

A few points that came up:

Three main entry methods:

Seek financial investment/partners
"Scratch own itch" and finance internally
Sell a custom solution as a product to first customer, then market to others

Developing internally:

Benefits: Strong engineering expertise, Can work on it during "downtime"
Drawbacks: Tough to focus and allocate enough time, Lack of sales/marketing expertise

When bootstrapped, makes you highly focused on revenue generation and reaching profitability
Big difference in attitude in Canada vs. United States with regards to VCs and financing

Thanks to Jeremy at JAR Creative for hosting!

Lean Coffee: Culture

2011-06-21T11:09:00.000-04:00

Today at Lean Coffee Toronto, we discussed Culture as a Competitive Advantage.

A few of my key takeaways:

Culture is: The expression of your values

Examples: Mediteranian vs.British vs. German

Can be a big advantage for small companies
Business was a lifestyle choice

Enjoyed work and stuff outside of work

Profit not the only motive -- sustainability too
Formalized profit-sharing (after setting aside 3 months emerg. money)
Working Group working retreat: Amazing ideas, great team building
Marked a commitment to the future and to the team

Defining the culture was a group effort

Building a "post-modern" company: happiness and fulfillment as well as profit
Reference: "Drive" (Dan Pink)
Even in bad times, continued to do "extra" stuff like team retreats
Growth spurts can hurt culture
It takes a lot of time to hire people that meet the culture

Often creates problems when companies grow quickly

Ties into organization, process, procedures, scalability
In small companies, culture is based on your personality

When you grow, you need to abstract your values
Successful models: Zappos, Apple, Google

Employees drive culture in subtle ways -- when they show up, conversations, etc
Culture defined stronger when founders are very involved in day-to-day ops
People want ownership of stuff
Is culture like a brand? Difference between reality and what is said/written

Thanks to Andres and Dom from TWG for hosting and facilitating today!

Lean Coffee: Pricing and Estimation

2011-06-09T18:38:00.001-04:00

Today's Lean Coffee was hosted by Matthew Bertulli at the beautiful Mango Studios.

I managed to jot down a few notes from the session:

What is your market?

Enterprise pricing very different

Your pricing determines what type of customers you'll get
Estimating ties into pricing to determine whether a business is viable
Estimating your customer acquisition cost if important
Price as high as the market will bear
Should you price yourself based on cost?

Generally not, but should at least be considered a minimum

Should never offer a B2B app to businesses for free
B2C generally needs to have a free option
Estimating is very hard, and you will always underestimate
Estimating product costs: How long can you survive on no money?
Pricing: What are the alternatives?

What is the premium value you're offering?

Estimating: At least double it -- there are always unknowns

See you at the next!

Lean Coffee: Minimum Desirable Product

2011-05-24T10:23:00.000-04:00

Today's Lean Coffee TO discussed the concept of a "Minimum Desirable Product" in relation to the more well-known MVP.

An interesting way to visualize this concept, from @andrewchen's presentation is as follows:

I also took some notes from the discussion:

Twitter, Facebook, Google all started as MDPs (without a viable business model)
Viability is measurable, whereas desirability is more difficult to measure
Desirability is about demand -- does it exist at any price (including free)
Are you viable initially, or only after X number of users?
MDPs can give awareness, publicity, etc. to a company to help them launch 2nd, 3rd products
MySpace -- Still viable, but not as desirable anymore?
Just starting out: Tradeoffs between desirability and viability
Desirability is a _component_ of viability
MVP when spoken about, often really refers to MDP
Can viability kill desirability? (ie. Facebook early stages)
With a desirable product, your viability may be tied to different users than you think
Like "Ladies Night" -- free customers and paying customers
What should you focus on at what time? Feasibility vs. Desirability vs. Viability
Feasibility is a lot easier for most type of applications now
Viability is easier too since costs have gone down
So the most difficult part now might be Desirability

Thanks to Andrew and Satish at Jet Cooper for hosting this morning's session!

PMRobot Project Management Survey #1 Results

2011-05-19T11:35:00.001-04:00

Back in March, I put together a survey with two very simple statements:

1. When managing a project, I often feel like a glorified secretary

The results for this question surprised me. Only about half of the 32 respondents felt this way.

2. Communication between clients and programmers is poor or non-existent

This question turned out more like I expected. Most people agreed that client-programmer communication could be improved.

There were also some great insights from the free form comments:

Programmers: "Often they are not engaged early enough in the project. Therefore they are missing information that has already been covered."
"If your programmers just aren't client-safe, then you are doomed to be, or to rely upon, 'Systems Analysts' of the sort you see in the movie 'Office Space'."
"It's important to engage with clients and programmers. When you wait for them to come to you and don't engage proactively, then communication suffers."

Thanks again to all who responded!

I've already used this feedback to help prioritize the communication aspect of PMRobot over the automation features.

P.S. I'm running a new survey about existing tools. I'd love to hear your feedback at http://bit.ly/ifX4SV

Lean Coffee: How to launch a product

2011-05-19T10:10:00.001-04:00

This morning we chatted about how to launch a product the lean way. A few key observations:

What's the definition of "launch" for Lean?

Multiple "launches" during customer development

You need to refocus you team from development to sales and support
Infrastructure: As you move from beta, backup and failover systems become more important
Looking for early adopters

Do beta/soft launches first to smaller groups

Don't see a lot of "big bang" launches anymore -- more "constant" betas
However, "hard" launches are still common in enterprise (CDs, media, etc.)

Slowly going away and moving to SAAS (software as a service)

Product Lifecycle Curve (from Crossing the Chasm)
Techniques:

Target influential bloggers in the field
LaunchRock (a bit spammy, but works)

Need organic growth -- make it easy for people to do the marketing for you
It's a different story launching something that people need to actually spend money on
Difficult to cut through the noise and get people to pay attention
The personal approach:

"Bribe" early adopters and influencers and give a personal touch (example: Hashable)
An email from the founder makes people feel important
Personal connections can't be faked
As you grow, build the personal connections into the culture ("customer development team")
Big launch with press release, etc. less personal -- not as approachable

Your current users are more valuable than new ones
Are you launching a product, or launching a company (with a business model)?
Don't assume it's going to "go viral" -- Design for if it doesn't
Categories of influencers: How well do you know your customers?
If you want to get coverage, have something truly interesting, novel to say (example Gmail "goggles")

Key influencers (especially well-known ones) can make all the difference
Frequent, iterative launches: Find "excuses" to get heard, and stay consistent
It takes many times of people hearing something before they actually remember

This is great advice as I personally iterate towards progressively larger "launches" of our project management software, PMRobot.

These Lean Coffee sessions are always a great way to start the day and get thinking about "big picture" stuff that you might not otherwise.

Thanks to Jeremy for hosting, and everyone else for attending and contributing!

Lean Coffee: Micro-management

2011-05-12T10:31:00.000-04:00

This morning we talked about management, project management, and more specifically, micro-management. A few key points from the discussion:

What's involved in management?

Timelines, resources, problems/obstacles

When to micro-manage?

Highly selective micro-management

What are the key things you need?

Visibility
Accountability
Communication

Need to let people fail and fix things themselves when possible

But maybe not when it's on a client's critical path

When to step in? When things aren't going as expected or estimated
Make sure workers know when to flag things and ask for help
Manager's job: Find out the impediments and remove them
Need to give frequent feedback, especially positive

Don't forget about the positive feedback -- it's easy to only give feedback when there's problems

Hiring: People observe who stays and who is let go

Contributes to group culture

Tools: Pivotal Tracker, Basecamp (good for discussions), Trac (didn't like), PMRobot (coming soon :), Intervals, Bugzilla, Fogbugz, JIRA (bloated, enterprise-y), Redmine (customizable)
Pivotal Tracker: Velocity / points system works really well

I was really interested by the tools discussion, and on a related note, prepared a quick Google Docs survey. Check it out --> How do you manage? -- I'll post the results at a future session.

Lean Coffee: Project vs. Product Management

2011-05-05T12:52:00.000-04:00

This morning's Lean Coffee TO was hosted by Jeremy at Jar Creative. We had an interesting discussion (and side topics) related to project and product management, including:

Difference: Projects are finite (at least they're supposed to be :)
Products: The end isn't always clearly defined
Is Waterfall methodology still is use? Yes. (unfortunately)
Product management is a bridge between the customers and development team
Product Management overlaps with Customer Development
Projects: Divide them up by features / user stories
Time-boxing: Pick a fixed date
Product management is about making decisions
What do you do in the later phases when your product is launched?

Sometimes need to go back and do a full adjustment
Often when you release people don't use it the way you expect

Difference between strategy and tactics: long term goals with iterations as a tactic
Helpful: The ability to turn feautures on and off for individual users/groups

eg: Google, Facebook, Big Bang (Woople)

Sometimes discussing features takes longer than just implmenting it and getting immediate feedback
How does technology affect product development? (ie. mobile, tablets, etc.)

The technology decision should come from product management / customer development

Great seeing everyone, and looking forward to next Tuesday's session with Ali from Well.ca.

Lean Coffee: Customer Segments

2011-04-21T10:45:00.001-04:00

Today's Lean Coffee was hosted by Mark at BNOTIONS.

Some great points on customer segments:

Reference: Geoffrey Moore - Crossing the chasm
Get your early adopters to become evangelists, help you cross the gap

They give feedback and a slightly different perspective

Invest in retention more than acquisition --> referrals
Early majority requires training/support/documentation than early adopter
Early adopter term applies across many fields -- projects, organizations, etc.
Influencer -- Applies to music, cars, etc.
Identify people that have an active need, ask them questions

When they have a clearly identified problem, and the pain is high enough, they're much more open to new stuff

Segment your customers by talking to them and identifying similarities
How do you identify evangelists?

If they're supporting other users or otherwise being vocal (in a positive way)

Stats: Who is the most effective at bringing in users? Often the same people that use it the most
When you identify evangelists, give them stuff, help them help you
The biggest skeptics can become the biggest evangelists
Personal touch helps engagement -- send a note, give a phone call

That's it for today! What were your takeaways from the session?

Lean Coffee: Fast and Focused

2011-04-12T17:45:00.001-04:00

Adil at My City Lives hosted today's Lean Coffee about being "fast and focused".

Ironically, the topic drifted a bit, but there was a lot of great insight to be had, including:

Common Problem: Doing all parts in parallel - not a nice linear flow
There's a tendency to not do true customer development -- instead only validating the parts you've already built
Lean makes a startups a science -- takes away some of the romance

Question: Is Lean a "true science"? Premise: Fail faster

If you find out an idea is not valid, the learning from the failure is a success

Big Bang example: For Retrievr -- Spent $5-6K instead of $50-100K

Repositioning: Can be creative -- example: instagr.am
Figuring out behaviour is the hardest part

Example: People don't actually spend time with their photos after they take them

Medical software: 6-9 months to fail -- 1 customer validated
Everyone wants to be the next Steve Jobs
Be careful of being "married to your idea" -- not willing to change

Do you want one "at bat" -- where you need a home run -- or a full career?

What is the shortest amount of time you need to get actionable data?
Lean really helps with you have a "hunch" -- within a few interviews, have a good idea
Do you focus on one industry? Good to have a "beachhead"

Too broad of an idea dilutes the MVP
Focus is key -- don't be afraid to focus on one segment
Much more compelling message if you reduce the scope

Messaging and positioning needs to be unique

Analogy: getting on a busy subway -- make yourself small and squeeze in

Great commentary from everyone today. Looking forward to the next!

Lean Problem Interviewing

2011-03-29T13:15:00.000-04:00

Lean Coffee was hosted today by mad scientists in white lab coats (ie. the Big Bang Technology crew).

We talked about the Problem Interview and various tips & techniques, such as:

Keep a "perimeter" -- don't go too far outside the topic
Who/Where/What/When/Why questions (from journalism)
Why validate?

Are there any customers?
Assumption: Your plan A won't work
No validation = no repeatable sales process

Beware of confirmation bias: Tendency to seek the answers you want to hear
Problem interview vs. Solution interview (very different)
Remember: Can pivot around the business model, solve different problems
Do you need a script? Helps keep things on track - vs. map or outline

But more open-ended discussion lets you discover a lot more

Customers are like kids -- easy to lead them, and have them agree with things they don't actually want
Should be a conversation, not a formal interview
They'll tell you the symptoms -- you need to determine the problem
Keep doing the interviews until you know what the answers are going to be
Problem: Looking for what's "broken"
Important: What people say vs. what they do is often very different
Methodology doesn't prevent you from still missing the mark on a "must have" problem
Failed products lead to the next one -- always learning
Answers change in different contexts -- anonymously vs in a group (observer effect)
Maximize the comfort level to get honest answers
Warm them up: Ask about themselves, make environment safe
Technique: Parrot back responses

Lets them confirm, helps them feel more comfortable

Discover people's motives

Another great session!

Next week I'm going to be in Orlando on business (I know, poor me) so hopefully someone else can take a few notes.

Problems Worth Solving

2011-03-22T10:01:00.000-04:00

Today at Lean Coffee Toronto, we discussed the topic of "Problems Worth Solving".

We focused primarily on Customer Development and validation with some great discussion points:

Relatively few products ever see "the light of day"
Very few businesses (10%?) make it past the 2-year mark
There's often a difference between end user and the person who's going to pay, ie. the customer
Value chain: Need to talk to everyone, but be careful about focusing only on one piece at a time
Developing a product inside a service business

Risk of being introverted when you develop in-house
Risk of entrenching vision and ability to pivot
Often need to take a step back and talk to people outside

Customer development

Validate your problem first
Then validate your sales process and ecosystem

Is it acceptable to sell a product that isn't 100% finished yet?

Yes. Find out if the idea sells. If yes, go to next step.

Lean: Is there a kisk of killing bad ideas?

Yes, but very small compared to the risk of building something nobody cares about

Most devs are not good salespeople naturally

Need to develop your sales skill set
Session idea: Lean sales?

Danger of "sales people" do customer validation -- might get overly optimistic early results
Using Google ads, etc. to test hypothesis / validate customers

A few people had tried this

Kickstarter is essentially the Lean model (but need a US bank account)

Thanks to everyone for their participation, and to Mark at BNOTIONS for hosting and moderating.

Lean Metrics

2011-03-17T15:41:00.000-04:00

Chris Eben hosted this morning's Thursday session of Lean Coffee Toronto at The Working Group.

We chatted about Metrics, including:

What are metrics? Defining the things that are most important to your business
Don't base decisions on metrics until you know they're the right metrics
Start at revenue and work backwards to find out the actions that lead to revenue
Be careful about which numbers you're basing decisions on:

Does your sales funnel indicate whether your pricing is wrong?
...or if you're trying to sell to the wrong people?

Try to see where the bottleneck is -- eg: What are they key indicators of dropoff?
Don't make decisions on the "marketing/vanity" metrics
Another thing aggregate metrics often don't tell you:

One user might be 10x more valuable than another
How do you know which ones?

"Stop listening to" and "start watching" your customers
Product-market fit: 40% of your users would care if you disappeared
Can't apply metrics from one customer segment to another

ie. early adopters vs. majority

Track at least one key metric in each part of the AARRR model
Practical example:

If you notice that conversions suck after 1 month, could be "honeymoon period"
Trim eval period back to 10 days and improve conversions

One of the best tools: Another set of eyes, second opinion
OKCupid demographics data set overviews -- generally useless but entertaining
Need to change your key metrics you have as you move into new business phases

We also spoke briefly about my recent software project management survey, how survey design is difficult, and how we could spend an entire session talking about surveys. I'd be happy to plan and moderate such a session, but would need a location.

Inside The Lean Startup

2011-03-10T21:02:00.003-05:00

This evening I attended a great panel discussion event at the MaRS Discovery District entitled "Inside The Lean Startup".

There were some great points brought up by the panel of @ashmaurya, @skanwar, @leilaboujnane, and @davidcrow of StartupNorth etc.

My takeaways:

What do people misunderstand about Lean?

not a step-by-step guide -- it's a set of philosophies
not "cheap" or "bootstrapping" -- process efficiency

Potential mistakes:

Relying on the wrong set of tactics for the stage they're at
Over complication in systems (ie. continuous integration)

Should be about changing behaviour -- getting out and talking to customers
All about efficiency -- get the most for the least
Key Metric: Money -- Are people paying you for your product?
Key Question: How disappointed would you be if this product would be taken away tomorrow?

40%+ indicates not a fluke

Key Points:

Reduce assumptions
Identify riskiest parts first and evaluate
Don't afraid to be embarased
Find the shortest route to get in front of customer and get feedback

Lean applies to: unknown problems / unknown solutions
Hypothesis test: pull the plug and see if anyone cares!
When do you start charging? From day 1. ("free" is a customer acquisition tactic, not a business model)
Starting out: Is this a problem worth solving?
Make sure a hypothesis is falsifiable -- the scientific method
"Life is too short to build products nobody cares about." -- Ash
Adding features:

Unused features are waste
Creates technical debt
Start with "no"

How do you get feedback?

Initial hypothesis: pain is so great that they want to be involved in the process
Find your early adopters -- as visionary as you are (rare breed, hard to find)
People are always open to telling you about their problems ("tell me about your pain")
If you're not getting feedback, find out why -- not reachable? don't like forms, method of communication, type of question

And some miscellaneous notes:

Key Resources:

Toronto Events:

Valuable stuff. Looking forward to more events like this one!

Lean Marketing

2011-03-08T14:26:00.000-05:00

I attended the brand shiny new Tuesday session of Lean Coffee Toronto today at the awesome BNOTIONS headquarters at Yonge and Bloor.

My summary follows:

Thursday's session of "How to spend $5,000" apparently wasn't the right approach to the discussion

(good thing we got a second try :)

Different parts: Researching vs. Positioning vs. Building Demand
Can you describe the product in a few short sentences? (ie. the length of a Google Ad)
Very important to have consistent messaging
Creating the UVP (unique value proposition) is the hardest part.
Technique: "It's like X for Y"

Example: It's like Dropbox for Development Environments
Pros: You can use all of the marketing efforts from X for free!
Cons: Helps describe the What, but not necessarily the Why

6 steps: (iterative)

Problem
Values
Market
Ideal consumer
Competition
Positioning (USP)

Technique: 3rd-party re-explanation:

Explain to someone, then have that person explain it to someone else new

Tip: Don't try to deliver too many different concepts in your message
How far along do you need to get to get proper feedback? Idea? Mockups? Prototype?

Answer: All of the above. Start with an idea and move up from there as you get validation

Pivoting: Do you change the market or the product? (or both?)

And some Meetup-related stuff:

Next meetup: Same topic both days again
Perhaps some attempt to:

Post reading material prior to meetup (and have people actually read it)
Keep the discussion on topic via the moderator (a difficult task, to be sure)
Look at the San Fran Group for topic ideas and literature

Check out http://dooo.sh/it/ from Big Bang (blog post)

Please comment on this post or email any corrections, additions or updates.

Until next time!

Case Study: Side Projects

2011-02-24T13:32:00.000-05:00

Lean Coffee TO met again today and we discussed an interesting case study from Chris Eben, hosted by the good folks at My City Lives.

Brief summary of the presentation and discussion:

Started with the idea in 2008
Talked to investors, nearly secured funding, but disappeared during market crash
Should you go it alone? Started out with another non-technical partner

Turns out going it alone is very difficult (especially motivation)

Side comment: Are Entrepreneurs not taking big enough risks anymore?
Another comment: Investors will look closely at how much you've risked personally ("skin in the game")
Another risk: While working full-time, could you get sued for your side project due to employment contract?
What's the true motivation behind the side project? (you're always accountable to someone)

Want to build fun/challenging/new stuff

Possibility: Could you team up with your existing employer to do the new project?
Having a family/kids/mortgage can increase the potential risk of quitting a steady job
Should you learn technical skills to get a prototype done?
Process has been fun, but frustrating now that so much time has passed since the initial idea

And special -- for this week only -- a full-fledged off-topic rant!

I've been doing consulting with Syllogistic Software for almost 8 years now. I mentioned today that one of my key selection criteria for projects is one simple question: "What documentation do you currently have?"

I think this was was misinterpreted by some. (This ties in a bit to last week's documentation discussion.)

I wasn't suggesting that an idea needs to be fully spec'd out prior to starting. Quite the opposite. That's so un-lean it's not even funny. I would never waste time documenting unless it was strictly necessary.

My point is that this step is critical to demonstrating that you have more than just an idea in your head.

I've noticed that people can lean towards being "talkers" or "doers." I assume, perhaps unfairly, that someone is a talker, until they prove otherwise. That's why I ask potential clients what they've accomplished so far.

Don't get me wrong. I love talking too. I'm always chomping at the bit to get my two cents in at Lean Coffee :) Nobody is 100% one way or the other.

Let's face it though: There's a time for talking, and there's a time for doing.

Talkers can survive in big, bureaucratic organizations. They chat up their boss, attend meetings all day, send lots of emails, hang around the coffee room. They can talk to customers and investors. A properly motivated talker can be a good sales person.

As far as I'm concerned, when it comes to entrepreneurship, there is no room for talkers. There's too little time, and too much at stake.

There's a little saying on the Internet, "pics or it didn't happen." There's also the more traditional "actions speak louder than words."

When it comes to side projects, goals, and life in general, my all-time favorite is one I was introduced to many years ago (on a consulting practice business card of all places):

"JFDI", or "Just focus and do it."

Hope you enjoyed the rant. Next week I'll try to get back to my brief bullet point format :)

To Document or Not To Document

2011-02-17T11:18:00.001-05:00

As Lean Coffee TO's unofficial "documenter", I found our discussion on documentation very enlightening.

There seemed to be two opposing viewpoints -- oddly enough, from two physical sides of the room.

My bullet point summary follows:

Why are people afraid of documentation?

Makes it "real"
Not enough time

Documentation makes delegation possible
Must be kept up to date

Cost: overhead for every document you make
Sometimes you'll write something and never look at it again

Can documentation limit creativity? (depends on the type)
Very important for remote teams
Also important for new hires
Organizing documentation is very difficult
It should grow organically
Document according to risk level

Surgeons that document their process kill less people

Helps "be kind to your future self"
Example: Captain Picard and his log (had to be there to get this one -- awesome example :)
People have many ways of learning -- writing helps think about problems differently
Our brains are not designed for storage
Lean aspect: Wait until there's real pain before documenting

And my own thoughts on the matter:

I personally hate writing documentation, but...
Our memories are more like goldfish than we think -- we forget stuff quick
I document Lean Coffee out of necessity -- It's the only way I can justify the time invested to get some long-term learning that I can refer back to
Documentation leads to Automation (and automation is very efficient/lean)
Templates -- I only mentioned this briefly, but think it's ultra-important:

Saves massive amounts of time with certain processes
Again, leads to automation -- with a good, up-to-date template, I can create a proposal in 10 minutes that might have otherwise taken 3 hours

You need to keep stuff in one place (or at least link the multiple sources together)

Everything to do with my company is either in Google Docs or our project management system, and they both link to each other
On the personal side of things, my girlfriend and I keep all important info in shared Google Docs and Google Calendars

I've found that numbered lists or bullet points are better than paragraphs and sentences (since that's how we tend to think)
Finally, I think that organizing documentation is far more important than simply creating it

Perhaps you'd use some of your previous notes if they were actually somewhere you could find them :)

Refreshing Lean Coffee Toronto

2011-02-10T10:42:00.001-05:00

Today we celebrated Lean Coffee Toronto's 20th meetup, hosted by the awesome folks at Foundery.

This was a "refresher" session, devoted to discussing the group itself and its future. A brief summary:

Lean is all about the reduction of waste
"Lean Startup" perhaps a cross between agile software development and agile customer development
LeanCoffeeTO has a strong "support group" aspect to it
Resource / Definition reminder: "Running Lean" book: Steve Blank, Eric Reis, Bootstrapping
Comparing to religion -- pick subsets, slightly different beliefs, but common uniting factors: principles
Useful stuff: Processes, Case studies
Needs improvement: Moving from high level to specifics -- ie. metrics, measurements
Needs more coverage: Marketing, Financing, Scalability
Potential revisits of core topics
Important to record and/or summarize (No record of some earlier meetups)
Potential spinoffs or separations:

Workshops
Two different weekly sessions, split on Product/Process or Cust Dev./Technical

Foundery: Coworking, Incubation, Unfinished on purpose: Let participants define what it is

And some personal opinions:

Awesome (and somewhat surprising) how many people/companies have donated their space and bought coffee and snacks to support LCT -- My personal thanks to all of them!
30+ people is too big for the current format and splitting into multiple sessions would be beneficial
I personally favor the biz/technical split -- possibly on tues/thurs morning
Also I vote for a regular "official" Lean Drinks night -- perhaps once a month?
Not big on the workshop idea, but seems like others are
All of these things do require a bit of planning and organization
Still, important to keep a nice balance between "formal" and "organic" (ie. it will suck if it gets too formal)
Perhaps other can post their ideas as comments here or the LeanCoffeeTO message board?

P.S. If you'd like to be added to my LeanCoffeeTO Twitter list, just remind me at @jasonhanley or tweet with hashtag #LeanCoffeeTO and I'll add you.