The FIRST Framework For Growing a Successful Startup

1. Sam
Mallikarjunan
HubSpot

2. The FIRST Framework
For Growing a
Successful Startup
Sam Mallikarjunan

3. Head of Growth
@HubSpot Labs
Sam @Mallikarjunan

4. 4
Audience Analytics Calibration
Applaud if you like any of these things
Applaud if you like

5. Applaud
if you have a
smartphone.

6. I have to compete with
every piece of content
ever created by anyone
anywhere.
20 For the rest of this time,

7. When you
So do you.
leave this room,

8. It wasn’t
Alwaysthis way.

9. New Technologies Come
Innovators Early Adopters Early Majority Late Majority
10%
40% 48%
1%
Laggards
1%
“The Chasm” Area under
the curve
represents
number of
customers

10. Our included country mapsYour great subtitle in this line
We are still only at
the beginning of
the greatest global
transformation of
our lives.

11. DISRUPTIVE
INNOVATION

12. DISRUPTIVE
INNOVATION MODEL

13. Disruptor
Disruptee
2 31 4 5 6 7
Personal
computers
Mini mills Cellular phones Community
colleges
Discount
retailers
Retail medical
clinics
Phonographs
Mainframe and
mini computers
Integrated
steel mills
Fixed line
telephony
Four-year
colleges
Full-service
department
stores Traditional
doctor’s
offices
Pianos

15. 1877
Edison invents the
phonograph
1914
$56M1905
400,000 pianos
produced

16. 1944
Steinway produces
caskets with excess
wood
1919
$158M

17. Not a disruptive innovation

18. Solve a niche problem at
the low-end of a market
that brings in new
market participants.

19. 1. Same price, all the time.
2. Highly variable quality.
1. Almost perfectly efficient price marketplace that adapts to
supply and demand.
2. Better experience for riders and drivers with dual-ratings
system.
A disruptive innovation

20. We live in an era of big
bang disruptive innovation.

21. Rogers Market segments
Innovators Early Adopters Early Majority Late Majority Laggards
Trial users
Vast
Majority
Big bang
Market segments

22. Jobs-to-be-
done
Step 0:
Define the
User
Assumption
“As an x I want
to y so that I
can z.”

23. No one wants a ¼ inch drill bit.
They want a ¼ inch hole.

24. The Kodak Moment Went BankruptKodak Went Bankrupt

26. “We don’t
want to stop
the disruption,
we want to
find a way to
become the
disruptors!”

27. F Fake it.
I Iterate.
R Retain.
S Scale-up.
T Test.

28. Tell people it
exists now
Animated
explainer video
Landing page
to generate
sign ups
Button in an
existing user
interface
Crowdfunding
campaign
01
02
03
04
05Step1:FakeIt.RightAway
06 07 08
Wizard of Oz Horrendous
prototype. Really
bad. Barely
functional.
Get cash. Any
cash. From
anyone. For the
thing.
Eric Ries’ new book
Fortified Bicycles

29. 03
Landing page
to generate
sign ups

30. Button in an
existing user
interface
04

31. 06
Wizard of Oz
“Pay no attention to the man
behind the curtain."

32. Based on feedback
from faking it, make
small changes and
continue to test.
Don’t chase big deal cash.
I quit HubSpot for 87 days to work at an
agency. Worst professional experience ever.
Eric Ries: “Every once in a while, startups do
literally need cash to keep the lights on, but
this is more rare than founders think.
Usually, they just want some extra cash to
have a little extra cushion. That's not a good
enough reason to create a lot of waste
IMHO.”
Draw lines in the sand early.
Ask. For. Help.
Add slide about this presentation in
there. HubSpot B&B team could do it
well but expensively and slowly, I could
do it quickly but not as well, a freelancer
can do it more quickly and much better.
Work to Product/Market Fit. Many have
written on this amorphously defined
delineation, and there’s no single
measurable point.

35. You can and should
ask for help.

36. This is sort of wrong.
Marc Andreesen: A couple years ago Marc wrote the following on his blog: “…the life
of any startup can be divided into two parts – before product/market fit and after
product/market fit.” He goes on to write: “When you are BPMF, focus obsessively on
getting to product/market fit. Do whatever is required to get to product/market fit.
Including changing out people, rewriting your product, moving into a different
market, telling customers no when you don’t want to, telling customers yes when
you don’t want to, raising that fourth round of highly dilutive venture capital —
whatever is required.”
PMF can change.

37. How to know when you’ve found product/market fit
Eric Ries: “If you have to
ask, you haven’t.”
Scot Chilsom: “If your
site goes down, pay
careful attention. If your
customers start calling
and emailing in a panic,
you’ve probably found
product-market fit. If the
phones are silent, keep
trying.”
Sean Ellis: “40% of users
say they would be very
disappointed if your
product went away”
Alex Schultz: “Look at the
curve, ‘percent monthly
active’ versus ‘number of
days from acquisition’. If
you end up with a retention
curve that is asymptotic to a
line parallel to the X-axis,
you have a viable business
and you have
Product/Market Fit for some
subset of a market.”
1
2
3
4

38. Product B Does
NOT Have P/M Fit
Product A
Product A Has
Product/Market Fit
% Active
Time
Retention Curve
Product B
0%
25%
50%
75%
100%

40. Just as important as
knowing why
customers started
using your product is
knowing why they
stopped.

41. MAU vs. WAU vs. DAU
Defining “Active User”
properly is incredibly
important.
Once you find that fit, then you have to
make sure that people continue using your
app.
Onboarding
Value messaging
Segmented New User Experience
Reactivation
Create habits
Don’t try to get your square
peg customers to love your
round hole product, find
round hole customers or
build a square peg product.
You can out grow
churn for a long time.

42. According to the Harvard
Business School, increasing
customer retention rates by
5 percent increases profits
by 25 percent to 95
percent.

43. 1. What integral trigger is the
product addressing
2. What external trigger gets the
user to the product
4. Is the reward
fulfilling, yet leaves the
user wanting more?
5. What “bit of work”
is done to increase
the like hood of
returning?
3. What is the
simplest behavior
of anticipation of
reward
Nir Eyal’s Hook Canvas
Trigger
Investment
Reward
Action

44. 1. Email Notification
2. Collecting lonesome,
seeking connection…
Log in
Pin, Re-pin,
like, comment
Communication
(Tribe)
T
I
A
VR

45. 01
02
03
04
M-SPOT
Perfection is the enemy
Break apart the model that’s working, isolate the individual
components of growth, and focus focus focus.
Equally important as what you’re going to do is
what you’re going to omit
Once you’ve found fit, grow as fast as you can
Step4:Scale
05 Parents play an important role:
Cash Flow Is More Important Than Your Mother
Growth Is More Important Than Your Father

46. Grow What
You Can
+4000% Growth
+250% Growth
Focus on growing
things you can
make a reasonable
impact on

47. Jeff Bezos wasn’t the best CEO in
the world because he ran a
profitable business. He delivered
the best shareholder returns. In
the modern world, the primary
engine of this is growth in
enterprise value.

48. Profit isn't the only goal of business.
You want to grow.
70% 80% 90% 100%

49. Discountedcash Time
Max Cash
Consumed
Investment
Period
Payback
Period
Profit
Period

50. Step 6+:
Testing
Use the same
iterative
experimental
process to improve
your core values and
explore others.
Organized,
methodical
approach to
growth
experimentation
Always Be Testing

54. history
We live in the one of the most
of commerce.
interesting periods in the

55. 55
new within
the last
decade
1000 are
>70%of businesses on
the US Fortune

56. Thank You!