A Great Case Study of Customer Development + Pirate Metrics + Lean Startup

This is a brilliant case study of someone using Customer Development, Pirate Metrics and Lean Startup principles to develop their startup.

If you’re not familiar with these three concepts, here are the 3 links you need:

  1. Steve Blank’s blog on Customer Development
  2. Startup Metrics for Pirates: AARRR! by Dave McClure
  3. Startup Lessons Learned by Eric Ries

And you should also consider buying Steve Blank’s book: The Four Steps to the Epiphany (aff)

The presentation is something you should bookmark (or bookmark this post) for future reference. If you’re in the midst of launching a startup, you’ve already launched, or you’re thinking about launching something, please do yourself a favor and check out this presentation and the additional resources provided. You’ll save yourself a considerable amount of pain and frustration.

To summarize Customer Development, Lean Startup and AARRR – Pirate Metrics, here’s what you need to know:

  • Write out your key assumptions based on the problem you’re solving. There’s a very good chance your assumptions will be wrong, but if you don’t write them down succinctly and with some manner of thought behind them, you won’t be able to test against them properly.
  • Think about a Minimum Viable Product (MVP). An MVP is the smallest possible product you can launch that people will pay for. I’m simplifying and generalizing (and there’s a ton more you should dig into), but do away with the waterfall strategy of building some robust, full-scale application before launching and instead get down to the real crux of things – what’s the smallest thing people will buy?
  • Use actionable metrics for testing. A lot of metrics are just bullshit. They aren’t actionable; you can’t do anything with them. AARRR stands for: Acquisition, Activation, Retention, Referral, Revenue. You need actionable metrics that you can adjust your assumptions, product, and entire business on.
  • Stay lean, learn to pivot. The concept of a pivot from Eric Ries is that you have to shift direction (sometimes quite substantially) with your product and/or business, but it must be grounded in learning.

The Customer Development process might seem tedious but it will save you a ton of headaches down the road. This overall approach might feel like an increased burden of planning and management, but these systems are in place to make sure you don’t head down a path that’s not going to generate the result you want: a successful startup.

September 21, 2009 Posted in Customer Development by

  • http://www.modernimage.com/ small business marketing

    This is a good analysis, though some numbers to back this theory will be truly appreciated.

  • domainapraisal

    i also believe that writing the problem in details in a paper opens the path to solve the problem a good strategy.

  • domainapraisal

    i also believe that writing the problem in details in a paper opens the path to solve the problem a good strategy.

  • http://www.confusedaboutlaw.co.uk/ legal dictionary

    Essential advice for beginners and dare I say some old hand's as they realise that their method(s) was wrong lol. GOod stuff, thanks.

  • http://www.confusedaboutlaw.co.uk/ legal dictionary

    Essential advice for beginners and dare I say some old hand's as they realise that their method(s) was wrong lol. GOod stuff, thanks.

  • golfclubs

    Great resource. Thanks for sharing. This post touches on several topics that I've been pondering lately.

  • http://venturehype.com The Hyper Team @ Venture Hype

    this seems to be very handy fo me

  • http://venturehype.com The Hyper Team @ Venture Hype

    this seems to be very handy fo me

  • http://www.instigatorblog.com Benjamin Yoskovitz

    These aren't just theories without support. If you read Four Steps to the Epiphany you'll see supportive material in there. And look up Eric Ries who is pushing the lean startup concept in a very public way. There's lots of data out there to prove these concepts work. And the presentation itself has valuable metrics.

  • http://www.instigatorblog.com Benjamin Yoskovitz

    These aren't just theories without support. If you read Four Steps to the Epiphany you'll see supportive material in there. And look up Eric Ries who is pushing the lean startup concept in a very public way. There's lots of data out there to prove these concepts work. And the presentation itself has valuable metrics.

  • jaluzi

    I was unaware that Steve Blank has written on this subject, thanks for letting me know

  • tahir

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    Language : Turkish(Orginal), Arabic, English vs…. ( Google Translate System )

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    Nice post,thanks for the back link.

  • unitykamasutra

    NICE POST,Thanks for the back link.

  • unityKAMA

    Nice post,thanks for sharing it with us.
    unitykamasutra

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    Nice post,thanks for the back link.
    luis

  • http://www.getcashlikebrandon.com/ Cash Gifting

    Great information on “starting up”.. I need all the help I can get… Not trying to loose anymore money.

  • http://www.getcashlikebrandon.com/ Cash Gifting

    Great information on “starting up”.. I need all the help I can get… Not trying to loose anymore money.

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Ben Yoskovitz
I'm VP Product at Codified (makers of VarageSale).

I'm also a Founding Partner at Year One Labs, an early stage accelerator in Montreal. Previously I founded Standout Jobs (and sold it).

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