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

September 21, 2009 by Ben Yoskovitz

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.

Startup Case Study

View more presentations from dbinetti.

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.

Filed Under: Customer Development

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Ben Yoskovitz

Founding Partner at Highline Beta, a hybrid venture studio and VC firm that works with large, ambitious companies to identify new areas of opportunity through internal and external innovation.

Previously I was VP Product at VarageSale and GoInstant (acq. $CRM), and Founding Partner at Year One Labs.

Angel investments include: Breather, Spoiler Alert, SendWithUs and others.

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