1.
Building a MVP
What I have learned as an entrepreneur
Daan Löning
@daan_kinderfee
daan@kinderfee.de

2.
Startup Economics 101

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.
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.
Why build a MVP?

6.
What is an MVP or
How quick is quick?

7.
Key questions for your test

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.
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.
Validating demand & economics
How can I sell my product without a product?
Fake it until you make it!

11.
www.google.com/adwords

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.
Tool for further insight

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.
What can you use these tools
for?
Create a Leanathon
Test a whole product
Test a feature
Change your mindset

16.
Thank you!