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Building a MVP - Validating startup ideas - lean startup - Google Launchpad Berlin

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How to build a MVP and test your startup idea using a lean startup methodoligy. Presentation originally held at Google Launchpad Berlin.

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Building a MVP - Validating startup ideas - lean startup - Google Launchpad Berlin

  1. 1. Building a MVP What I have learned as an entrepreneur Daan Löning @daan_kinderfee daan@kinderfee.de
  2. 2. Startup Economics 101
  3. 3. Startup economics 101 Customer Acquisition Cost vs. Customer Life Time Value $ $ $ $ vs. CAC calculation Google CPC: 1$ Conversion rate: 3% CAC: 33$ CLTV calculation Avg. Basket size: 250$ Avg. Orders per cust.: 1.3x Avg revenue per cust: 325$ Avg gross margin: 40% CLTV: 130$
  4. 4. Two great businesses with one small difference Basket size analysis Typical transaction 80$ per night 4 nights per booking = 320$ 15% fee = 48$ Typical transaction 25$ for typical event 2 participants per booking = 50$ 10% fee = 5$ Please note: this example is my estimate. The data is entirely made up.
  5. 5. Why build a MVP?
  6. 6. What is an MVP or How quick is quick?
  7. 7. Key questions for your test
  8. 8. Validating demand & economics Key questions: Is the CAC 10$ or 100$? Is the CLTV 5$ or 500$? Can I sell one item per day or 5,000?
  9. 9. Validating demand & economics Rules for running your test: 1) Never ask anyone whether they like your idea Only hard cash means anything 2) Sell your product at least 10 times
  10. 10. Validating demand & economics How can I sell my product without a product? Fake it until you make it!
  11. 11. www.google.com/adwords
  12. 12. <!-- Google Code for Test Purchase Conversion Page --> <script type="text/javascript"> /* <![CDATA[ */ var google_conversion_id = 978000249; var google_conversion_language = "en"; var google_conversion_format = "2"; var google_conversion_color = "ffffff"; var google_conversion_label = "v_kWCNmywVYQ-bKs0gM"; var google_remarketing_only = false; /* ]]> */ </script> <script type="text/javascript" src="//www.googleadservices.com/pagead/conversion.js"> </script> <noscript> <div style="display:inline;"> <img height="1" width="1" style="border-style:none;" alt="" src="//www.googleadservices.com/pagead/conversion/ 978000249/?label=v_kWCNmywVYQ-bKs0gM&amp;guid=ON&amp;script=0"/> </div> </noscript>
  13. 13. Tool for further insight
  14. 14. What does the perfect flop look like? Huge market (as defined by your ambition) Very strong initial customer economics It is not only possible for you to sell your product, but customers are flocking towards you
  15. 15. What can you use these tools for? Create a Leanathon Test a whole product Test a feature Change your mindset
  16. 16. Thank you!

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