1. Metrics that Matter
Defining startup success and failure
Hiten Shah
Customer and Business Development Class at Berkeley • Mar 9, 2010
2. The Startup Pyramid
The Race to the Top
Growth
Transition to Growth
Product / Market Fit
Sean Ellis: Startup-Marketing.com
3. Product / Market Fit
• Low burn, focused on product, no VPs / sales people
• Customer Development (Steve Blank, Four Steps)
• Minimum Viable Product (Eric Ries, The Lean Startup)
• Pivots (Eric Ries, The Lean Startup)
“…the life of any startup can be divided into two parts –
before product/market fit and after product/market fit.”
Marc Andreesen, Founder of Netscape
4. Customer Development
• It’s all about learning and discovery
• Outlined by Steve Blank in Four Steps to the Epiphany
5. Minimum Viable Product
• Coined by Eric Ries as part of The Lean Startup
• Lean Startups are a series of MVP’s
• Each designed to answer a specific question (hypothesis)
“ The minimum viable product (MVP) is often an ad on
Google. Or a PowerPoint slide. Or a dialog box. Or a landing
page. You can often build it in a day or a week.”
Nivi, Venture Hacks
6. “ If Apple can launch a smartphone without Find or Cut-and-
Paste, what can you cut out of your product requirements?”
Lance Glasser, former CTO KLA-Tencor
7. “ The first version of Gmail was literally written in a day”
Paul Buchheit, Google / Friendfeed / Facebook
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12. Pivot
“ The idea that successful startups change directions but stay
grounded in what they've learned.”
Eric Ries, The Lean Startup
• Segment pivot - existing product, different customers
• Customer problem pivot - same customers, different problem
• Feature pivot - pick a feature and reorient around it
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15. Product / Market Fit Metrics
Created by Sean Ellis (12in6)
• 40%+ of users say they would be “very disappointed”
• Representative of a large enough target market
• Use Survey.io to get started
Sean Ellis: Startup-Marketing.com
16. Transition to Growth
“ Once you have achieved product/market fit, it’s time to
accelerate through the next steps of the pyramid and then
begin scaling your business.”
Sean Ellis, 12in6
• Positioning - optimize first user experience via messaging
• Economics - implement a business model
• Optimization - track and report on the right metrics