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#UXLearn #ProductValidation @koombea, #ProductValidation
| Date post: | 08-Sep-2014 |
| Category: |
Technology |
| Upload: | koombea |
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AGENDA: Product Validation
• Company Type: VC or no VC? • Evaluating Your Market • Early Stage Questions
• Trends: Traction Metrics • Industry and Revenue Streams • Measuring Your App Idea
Jonathan Tarud, CEO
Ellie Cachette, VP Product Marketing
VC (Go Big) or No VC (Bootstrap)?
Which company to build?
Bootstrapped (No VC) Companies that have revenue and customers even if inconsistently
Common criteria: Started with little to no cash • No formal investors or capital raised• Company growth dependent on revenues
and cashflow• Might have both a product and a service in
parallel (one might fund the other)
Companies that Bootstraped?
http://www.businessinsider.com/bootstrapped-companies-2012-10
What is the market like for a product for this segment?
*Off/Online Distribution
Coffee shops, etc. Mom blogs, workplace Facebook & LinkedIn groups Websites
Make a list of keywords, problems, & phrases
• Look for keywords on a channel from last exercise.
• Write down the patterns that you see.
• What reoccurring themes are there?
Evaluating Your Market Are there already players in your space? How close is your problem to being solved?
• How many end users are possible for you, in the world?
• What apps already exist? What prices and models are they using?
• What devices are best for your app? • Special service? Building on top of APIs
• Does your product save time or money? What value does the user gain? • Do you know if you are aimed for the direct to
consumer market or enterprise? • Do you have the expertise for your space?
Figuring out the value
User Acquisition
What’s the BMU (Bare Minimum Users) you need for the app to be successful? Are users dependent on each other (dating sites, professional sites, sites needing inventory)?
Early Stage Questions
Early Stage Questions Questions every app or startup should be asking themselves • Features: Could you map your features versus
similar apps features in a table? How is your product different than what’s out there.
• Do you have basic materials ready for users and questions? Do you know how to troubleshoot with a user?
• How fast can your app be built and what is your advantage?
Early Stage Questions
Q: How do I get to an MVP? A: Make a list of basic requirements Q: How do I know if people will use it? A: Ask around, don’t be shy!
How Fast is Fast? Most apps can be built in a few weeks depending on features and platform
• Have you started scoping your app? • Do you know what you
want? • Have you found users?
What is Product Marketing? Help customers understand their go-to-market for apps built inhouse at Koombea, pre-sales educational materials, user acquisition. Main areas of concern: • App vertical feasibility • User acquisition costs • Launch costs • Risk for user leakage
Trends: Traction Metrics Gaining traction is no longer is a secret but required, most verticals have existing standards. Know yours.
• Find out how many monthly signups you need or how much a competitor is getting
• Look up website traffic on Alexa.com or other engines
• Try to calculate size of competitors
Early Stage MVP Stage Raise $100-‐500 k Family / friends Val 2.5 MM – 4MM
$500k-‐ 2MM Val $6MM-‐8MM
Debt note cap Equity with preference
Team: 2 full Kme, some part Kmers
3 full Kme, several part Kme
CUSTOMERS: 1 LOI 2 LOIs +
PRODUCT: prototype, min 300 users / emails / signups
Prototype with metrics 90 days
Prototype tracKon, working funcKonality
Working MVP, repeatable user acquisiKon
Examples of Traction
Early Stage MVP Stage Sales: Several theories may be in tesKng
Sales: Repeatable sales cycle with some bumps
Docs: We need a one pager?
Docs: SupporKng Sales presentaKons online
Website traffic: 5,000 – 10,000 Monthly uniques
Website traffic: 20,000-‐100,000 monthly uniques
Downloads (ex: iTunes) 300+
Downloads (ex: iTunes) 1,000
Sales Advisor VP of Business Development lined up, will be hired soon if not already
Several Power users, user tesKmonials Top Rated App in category, 4 star raKng or above
Examples of Traction
Industry and Revenue Streams
Understanding what area or industry your app is in decides the revenue model
Example: Service or delivery app Model (one time event)
• These apps can usually charge 10-50% transaction
fee. • Take avg order size (trans fee) X amount of times a
week your app is operating = y. • Take avg order size (trans fee ) X amount of times your
app SHOULD be operating = z. Take Z minus y and you now have whats called a goal or KPI
Industry & Revenue Streams
Deciding on whether you should go to market or not. Calculate your GTM “Go to Market” Example: Monthly subscription for service (Hulu, health, etc)
• These apps can usually charge $3.99 X $10.99 mo • Even with assuming a years worth of subscription (no
leakage) that puts user revenue at $48.00 to $132.00 a year • How much did your app cost to build – operating
costs for the year = X • Take X and divide by 2 (two years) and divide by 12
(months) = y • Now how many months will it take your app to get to y as
monthly revenue? • If its more than 6months you should reconsider.
Quiz: Measuring Your Idea Here’s a simple Quiz to help you measure your app idea. Grab a notepad or get ready to type.
Does your app already exist? (yes) (no)
Do you know the business model? (no, the what?- 2 ) (yes, exactly)
Do you know the GTM or user goals? (yes) (no)
Have you done something similar? (yes) (no)
Get your exclusive MVP checklist here!
Quiz: Measuring Your Idea Continued…
Have you started MVP? (yes) (no)
How confident are you about getting users?
(yes, confident) ( no, not confident)
Have you found your Basic User Acquisition Costs for the first two years?
(yes) (no )
Test Your Idea
If you scored, 4: Minimum MVP You have some basic understanding of what needs to happen, know of the space you are in and have some ideas that need fleshing out. Next steps would be market research and finding expertise in that space If you scored 6: Scoping Sweet Spot You have already found similar apps, have an idea of what to do just need to know the next steps for building and executing. If you scored 8: Perfect Product Market Fit You likely haven’t figured out the small hurdles but have an idea of where the risks are and what to look for. You know your space and plan to approach it.
Getting started is ½ the battle. But once you feel your product is validated enough, it’s time to
begin.
