LEAN - Measuring Value in Early Stage Products or Services

Ⓒ Innovation Labs Asia
@scottebales #innovationronin
Measuring Early
Product Value
Innovation Labs Asia
Scott Bales
Managing Director
@scottebales
@scottebales
/scottebales

Working with over 100 companies in
various stages of the innovation journey

#innovationronin
@scottebales
+

Lean Recap
Measuring Experiments
Persona Presentations
1-on-1

“Give a Man a Fish,
and You Feed Him
for a Day. Teach a
Man to Fish, and
You Feed Him for a
Lifetime”

ERIC RIES
The Lean Startup method
teaches you how to drive a
startup-how to steer, when to
turn, and when to persevere,
and grow a business with
maximum acceleration.

ACCEPT YOU KNOW NOTHING
Neither you, nor the customer, may know what the product
requirements are until after they’ve played with the product
PRINCIPLES OF LEAN
TEST SMART
Failure friendly firms don’t fail, they either confirm or reject
hypotheses
MEASURE SMART
Lean Enterprises measure the right things
ITERATE AT SPEED
Lean Enterprises don’t throw good money after bad. But
neither are they fickle. Whatever the case, they pivot or
persevere quickly

IF YOU DON’T TALK TO YOUR CUSTOMERS,
HOW WILL YOU KNOW HOW TO TALK TO YOUR CUSTOMERS? WILL EVANS

SILENCE
CUSTOMER DISCOVERY TIPS
REFLECT BACK
HAVE
EMPATHY
ASK FOR STORIES
ASK OPEN QUESTIONS
NO LEADING QUESTIONS
OBSERVATIONS VS. INSIGHTS

PIVOT OR PERSEVERE
DIFFERENCE BETWEEN SUCCESS & FAILURE IS THE ABILITY TO BUILD MEASURE, LEARN & ADAPT

YOUR SKILLS ARE KEY TO YOUR STARTUP SUCCESS
NONE 1 2 3 4 AVG 6 7 8 9
ROCK
STAR
BUSINESS MODELING
PERSONA DEVELOPMENT
CUSTOMER DISCOVERY & DEVELOPMENT
MINIMUM VIABLE EXPERIMENTS
PRODUCT / MARKET FIT
PIVOT VS PERSEVERE
PITCHING

WHO ARE YOU?
WHAT ARE
...YOUR PASSIONS?
...YOUR EXPECTATIONS?

https://www.javelin.com/beta

CUSTOMER & PROBLEM
ASSUMPTIONS
MVP
VALIDATED LEARNING
CUSTOMER DISCOVERY
PIVOT OR PERSEVERE
BRAINSTORMING
SOLUTION

MINIMUM VIABLE PRODUCT
Customer Discovery/Development
Pitch
Concierge
EXPERIMENT
EXPLORATION
PITCH
CONCIERGE

CUSTOMER VALIDATION
investigating their problems to
understand past behaviour
attempts to sell to a customer in
exchange for currency: time,
money or work
deliver the product as a
service to see is delivery
matches expectations
CUSTOMER
DISCOVERY
PITCH CONCIERGE

Field Observation

Coffee Shop Test

Role Play

Facebook Page

Landing Page

HOMEWORK
DEVELOP TWO CUSTOMER PERSONAS
THEN INTERVIEW 20 OF EACH

SEARCH & EXECUTE
CUSTOMER
DISCOVERY
CUSTOMER
VALIDATION
CUSTOMER
CREATION
COMPANY BUILDING

CUSTOMER PROBLEM (SOLUTION) HYPOTHESIS
Who specifically has this
problem?
How do you intent to
solve this problem?
What problem are you
trying to solve?
CUSTOMER PROBLEM SOLUTION

CUSTOMER VALIDATION
CUSTOMER
DISCOVERY
PITCH CONCIERGE
investigating their problems to
understand past behaviour
attempts to sell to a customer in
exchange for currency: time,
money or work
deliver the product as a
service to see is delivery
matches expectations

WHAT DO THE NUMBERS SAY?
ONE ACTIONABLE METRIC THAT TIES SPECIFIC &
REPEATABLE ACTIONS TO OBSERVED RESULTS

PIVOT
ZOOM-IN
A SINGLE FEATURE BECOMES THE
WHOLE PRODUCT
CUSTOMER NEED
REPOSITIONING, OR A
COMPLETELY NEW PRODUCT
ZOOM-OUT
THE WHOLE PRODUCT BECOMES A
SINGLE FEATURE
CUSTOMER SEGMENT
GOOD PRODUCT, BAD CUSTOMER
SEGMENT
PLATFORM
CHANGE FROM AN APPLICATION
TO A PLATFORM, OR VICE VERSA

YOUR GOAL
CONTINUOUS VALIDATED LEARNING

The Innovation Journey
• Barriers to Innovation
• Persona Modelling
• Hypothesis Design
• Experiment Design
• Customer Development
• Innovation Culture
• Business Models
• Opportunity Framing
• Peer Review
Equipping teams with consistent proven methods for innovation
Innovation
Practitioner
Innovation
Bootcamp
Innovation
Accelerator
• Product Market Fit
• Advanced Experiment
Methods
• Experiment Design & Metrics
• Scaling Problem/Market Fit
• Opportunity Identification &
Validation
• Venture Accounting model
• Pitch a Venture
• Growing A User Base
• Support Frameworks
• Can we measure demand
prior to launch?
• How does the customer
want to experience the
product or service?
• Rapid prototyping and
acceptance testing
Who & How Should We
Innovate?
Should & Can we solve this
problem?
Is There A Problem Worth
Solving?

Returns
Short term priorities that lead to
long-term Innovation Goals
Collaboration
CapabilityCulture
Context
Innovation
Acceleration
Innovation Bootcamp
Innovation
Practitioner
Executive Inspiration
Session
Inspiring action
around
opportunity,
threats &
barriers to
innovation.
Horizon 1 | ROI in 0-12 months
12 weeks
acceleration
program
3 days Innovation
practitioner workshop
5 days
bootcamp
6 weeks situational
Analysis Report
Proof of
Value
Proof of
Concept
Enabled
Innovation
Innovation
Education
Discovery
& Planning

CUSTOMER PROBLEM SOLUTION
Facts + Behavior
= Customer
Pain + Goals
= Problem
(Behavior + Goals) - Pain
= Solution
hypothesis design

So how does it scale?

Opportunity value

Acquisition
Getting People to come to your site
Activation
Getting people to sign up for anything that could lead to a repeat visit
Retention
Getting users to become active
Referral
Getting Users to ‘spread the word’ about your site
Revenue
Monetizing active users
TERMINOLOGY

STOP adding features
Find the ONE THING users LOVE
How? TAKE STUFF AWAY
When they SCREAM, you’ve found it
Then bring it back… only better
Tip: Kill a Feature EVERY WEEK
RETENTION

METRICS MODEL
@davemcclure

User State Conversion % Est. Value
Acquisition Visit Site 100% $0.01
Acquisition Doesn’t Abandon 70% $0.05
Activation Happy 1st Visit 30% $0.25
Activation Email/Blog/RSS 5% $1.00
Activation Account Signup 2% $3.00
Retention Email open/RSS view 3% $2.00
Retention Repeat visitor 2% $5.00
Referral Refer 1+ users who visit site 2% $3.00
Referral Refer 1 + users who activate 1% $10.00
Revenue User generates minimum revenue 2% $5.00
AARRR METRICS MODEL
TEMPLATE: bit.ly/ilametrics

Value of
acquisition $0.06
Value of
activation $4.25
Retention
Value $7.00
Referral
Value $13.00
Revenue/unit
sold $5.00
Revenue/u
nit sold
Exp # Acquisition Activation Retention Referral Revenue Cost
Acquisition
Value
Activation Value
Retention &
Referreal
Revenue Total Value ROI
1 7 6 4 5 0 50 0.42 25.5 180 0 205.92 312%
2 7 6 4 5 0 50 0.42 25.5 180 0 205.92 312%
3 8 9 7 6 1 51 0.48 38.25 260 5 303.73 496%
EXPERIMENT METRICS
TEMPLATE: bit.ly/ilametrics

OPTIONS PORTFOLIO

Enabled Innovation
Executive
Advisory
Strategic
Advisory
Field
Research
Product
Development
Rapid
Prototyping
Market Entry
Strategy
Disruptive
Innovation

It is not the strongest of the species that
survive, nor the most intelligent, but the
ones most responsive to change.
Start your innovation journey
with Innovation Labs Asia, today
/ Charles Darwin
Contact Us:
Innovation Labs Asia
hello@innovationlabs.asia
Lvl 4, 101c Telok Ayer Street, Singapore, 068574
FEEDBACK: innovationlabs.asia/event-feedback

LEAN - Measuring Value in Early Stage Products or Services

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