MaGIC Academy Symposium 2015
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The document summarizes Nadhir Ashafiq's presentation on getting started with an idea and achieving product-market fit. It discusses the three stages of a startup - problem/solution fit, product/market fit, and growth. It then outlines how not to start a startup by building the full product before validating the idea. The Lean Startup approach is presented as a better alternative, involving building a minimum viable product, measuring key metrics, and learning from customer feedback in iterative cycles. The presentation covers topics like problem and solution hypotheses, building MVPs, metrics like AARRR, and tips for first-time founders.
MaGIC Academy Symposium 2015
- 1. MaGIC Academy 2015 Symposium How To Get Started with an Idea Product Market Fit by Nadhir Ashafiq
- 2. My journey to entrepreneurship Nadhir Ashafiq Masters in Finance Curtin University (2006 2010) Management Trainee CIMB Investment Bank (2011 2012) Finance Manager ABDA Aviation (2012 2014) Co-Founder Glokalise (2013 2014) Co-Founder TheLorry.com (Sep 2014 Now)
- 3. A little bit about TheLorry.com On-demand marketplace for logistics Launched exactly one year ago Mission: disrupt logistics industry via technology Simple start take lori sewa process online Currently funded and team of 12 Loving it! Not easy though.. blood, sweat and tears.
- 4. What will you get out of todays workshop How to develop your idea and get it to Product/Market Fit Understand The Lean Startup concept Tips for first-time founders
- 5. NOTE: SLIDES WILL BE AVAILABLE ON SLIDESHARE
- 6. What will we cover today 1. 3 Stages of A Startup 2. How NOT to Start A Startup 3. The Lean Startup Way 4. Lean Canvas 5. Tips for First Time Founders 1. Q&A
- 7. 3 stages of a startup Problem/Solution Fit Product/Market Fit Growth Product/Market Fit Does this problem exist? Can I solve it? Is my product desirable? Am I selling to the right target market?
- 8. What will we cover today 1. 3 Stages of A Startup 2. How NOT to Start A Startup 3. The Lean Startup Way 4. Lean Canvas 5. Tips for First Time Founders 1. Q&A
- 9. Hard truth - 93% of startups fail
- 10. 3 stages of a startup Problem/Solution Fit Product/Market Fit Growth Product/Market Fit Does this problem exist? Can I solve it? Is my product desirable? Am I selling to the right target market? 93% 7%
- 11. How NOT to Start a Startup The n00b way Have an idea Build product Spend $$ acquiring users Pray Wouldnt it be cool if.. It has to be jam-packed with features We gotta spend on marketing! I hope people use it
- 12. How NOT to Start a Startup The n00b way Hear about billion dollar acquisitions/fund raise Gather with friends at mamak. I also can do la! What should we do? Lets start a website. Its never been done before.
- 13. How NOT to Start a Startup The n00b way Quit your job Register company (Sdn Bhd) Register patent & trademark Be secretive. Afraid people will copy. Sign NDA Talk to no one about it until launch.
- 14. How NOT to Start a Startup The n00b way Pay developers hundreds of thousands to build full version of product 6 months Upon launch, pay to acquire users (facebook ads, google ads, taxi ads) Contact media (The Star, NST) to cover you
- 15. Is there a more low-risk way?
- 16. What will we cover today 1. 3 Stages of A Startup 2. How NOT to Start A Startup 3. The Lean Startup Way 4. Lean Canvas 5. Tips for First Time Founders 1. Q&A
- 17. The Lean Startup Way Lean Startup definition: A method for developing products and businesses. Central idea is to reduce risk by building products iteratively and validated learning.
- 18. The Lean Startup Way BUILD MEASURELEARN
- 19. The Lean Startup Way BUILD MVP MEASURE KEY METRICS LEARN FROM FEEDBACK SOLUTION HYPOTHESIS PROBLEM HYPOTHESIS
- 20. Problem Hypothesis A guess on the suffering/bad experience faced by a target customer Problem has to be painful (pain point) and worth solving Build painkillers (need to have) rather than vitamin (nice to have) Usually good problems are those that the founders themselves face How to get ideas? Cannot be brainstormed/discussed at a mamak session.
- 21. Examples of problem hypothesis Families & students who are looking to move house find it difficult to get transparent pricing and reliable movers Travellers find it difficult to book a room with a local City folks have a problem finding a taxi that is safe and charges transparently
- 22. How to find problems worth solving Frequency-Density-Pain test Frequency Density Pain Does the problem youre solving occur often? Is the problem something that must be resolved? Do a lot of people face this problem?
- 23. Estimating market potential Top-down Bottom-up Estimates of market size based on government data, research, trade journals, surveys, etc It is estimated that the market size for the mining industry is USD 500 bilion Number of potential customers x average revenue per user Example: o 1,000,000 burger eaters in Malaysia o 500,000 are in KL o They eat burgers twice a month o 1,000,000 potential customers o RM5 per burger o RM5m market a month o RM60m market a year
- 24. Lean Startup example Problem hypothesis: Busy working professionals in KL area have no time to cook food.
- 25. The Lean Startup Way BUILD MVP MEASURE KEY METRICS LEARN FROM FEEDBACK SOLUTION HYPOTHESIS PROBLEM HYPOTHESIS
- 26. Solution Hypothesis Dont approach problems with fixed solution in mind hammer looking for a nail Ask users how they want it solved Your solution needs to either: 1. Increase income (GrabTaxi) 2. Decrease cost (WhatsApp) 3. Create feel good factor (Facebook) 4. Save time (BeMalas / GoGet) Find a solution thats better, different or solves the problem more efficient than current solution (Google) If not, find other problems to solve!
- 27. Lean Startup example Problem hypothesis: Busy working professionals in KL area have no time to cook food. Solution hypothesis: Provide home-cooked meals on a subscription basis
- 28. The Lean Startup Way BUILD MVP MEASURE KEY METRICS LEARN FROM FEEDBACK SOLUTION HYPOTHESIS PROBLEM HYPOTHESIS
- 29. Build MVP Minimum Viable Product Definition: A minimum viable product is a version of a new product which allows a team to collect the maximum amount of validated learning about customers with least effort
- 30. Build MVP Minimum Viable Product Simple English A product to test your assumptions, built as cheap as possible, as fast as possible with the goal of learning as much as possible.
- 31. Build MVP Minimum Viable Product
- 32. Build MVP Minimum Viable Product
- 33. Build MVP Minimum Viable Product Build most important feature first 10 features vs 1 important feature Manual vs automated Can you build something low-tech to test your assumptions first? Examples of MVP: landing page, prototype, mock-up, wizard of oz, crowdfunding
- 34. Examples of MVP Asked permission from local shoe shops to take photos and put them online. Once order came in, bought the shoes and shipped it. Manually. A website to accept bookings and get matched with a transporter manually. A social network that connects students from Harvard University.
- 35. Case study: TheLorry.com Current user flow Motivated Customer goes to TheLorry.com Places a booking TheLorry.com receives booking at back- end Contact customer to verify Push to vendor app Claim job Email driver details to customer Job Done Rating & Feedback Payment Payment
- 36. Case study: TheLorry.com The MVP. Built with less than RM5k Motivated Customer goes to TheLorry.com Places a booking TheLorry.com receives booking via email Contact customer to verify Once verified, place booking with Provider Get driver personal details from Provider Forwards driver personal to Customer Job Done Ask feedback Payment Payment
- 37. Lean Startup example Problem hypothesis: Busy working professionals in KL area have no time to cook food. Solution hypothesis: Provide home-cooked meals on a subscription basis Build MVP A simple website. Work with single moms to generate supply.
- 38. The Lean Startup Way BUILD MVP MEASURE KEY METRICS LEARN FROM FEEDBACK SOLUTION HYPOTHESIS PROBLEM HYPOTHESIS
- 39. Key metrics - The AARRR Acquisition How do you get users? Activation Do users have great first time experience? Retention Do users come back? Revenue Do users pay? Referral Do users tell others?
- 40. Key metrics - The AARRR Acquisition 100 impression on Google AdWords ; 20 click throughs Activation 5 use the product / make a booking Retention 2 use again the next week Revenue 1 become paying customers Referral 1 refer another
- 41. A/B testing or split testing Acquisition 100 impression on Google AdWords ; 20 click throughs Definition: Compare two versions of a product by showing two different variants and see how each of them perform. Acquisition 100 impression on Google AdWords ; 25 click throughs Get home-cooked meals delivered to your home Get home-cooked meals delivered to your home for just RM10 A B
- 42. A/B testing or split testing Definition: Compare two versions of a product by showing two different variants and see how each of them perform. Pay RM20 monthly to get delicious home cooked meals Pay annually at RM10 a month to get delicious home cooked meals Revenue 1 become paying customers Revenue 2 become paying customers A B
- 43. Vanity metrics vs key metrics Vanity Metrics Key Metrics Registered users No of downloads No of page views Active users Cost per customer acquisition (CAC) Long Term Value (LTV)
- 44. CAC & LTV CAC LTV Customer Acquisition Cost How much does it cost you to acquire one customer? Long Term Value What is your expected profit over the long term from one customer?
- 45. CAC & LTV CAC LTV Customer Acquisition Cost Spend RM1,000 on flyers Acquire 1,000 new customers CAC = RM1.00 Long Term Value Profit = RM1 per meal Customer will be loyal for 3 months Make 2 purchases a month LTV = RM6.00
- 46. Lean Startup example Problem hypothesis: Busy working professionals in KL area have no time to cook food. Solution hypothesis: Provide home-cooked meals on a subscription basis Build MVP A simple website. Work with single moms to generate supply. Measure Sales per day, activation rate, churn rate
- 47. The Lean Startup Way BUILD MVP MEASURE KEY METRICS LEARN FROM FEEDBACK SOLUTION HYPOTHESIS PROBLEM HYPOTHESIS
- 48. Learning from user feedback Be obsessed about your users & customers Be very personal talk to your users understand their behavior Dont put anybody between founders and users (CS, sales guys) Do the job yourself (for service startups) Observe and ask How do they use your product? Would you promote this product? Would you use it again? What can make the experience better? How was the service?
- 49. Get users to use the product in front of you User testing
- 50. Get users to use the product in front of you User testing Get a real life person to view your product for FREE: http://peek.usertesting.com/
- 52. Example of products that went through pivots Odeo Find and subscribe to podcasts Twiter Micro-blogging social network Burbn Location-based app Instagram Mobile photo-sharing network
- 53. Lean Startup example Problem hypothesis: Busy working professionals in KL area have no time to cook food. Solution hypothesis: Provide home-cooked meals on a subscription basis Build MVP A simple website. Work with single moms to generate supply. Measure Sales per day, activation rate, churn rate Learn Users dont want subscription model and commitment Change solution hypothesis
- 54. We do all this to get to Product/Market fit BUILD MVP MEASURE KEY METRICS LEARN FROM FEEDBACK SOLUTION HYPOTHESIS PROBLEM HYPOTHESIS
- 55. Questions to ask if youve achieved PMF Did I build something that the market wants? Do people love it? Do you have high Activation rate and Retention rate? Would 40% of your users feel sad if your product was taken off the market? If so Holy Grail of startups
- 56. What will we cover today 1. 3 Stages of A Startup 2. How NOT to Start A Startup 3. The Lean Startup Way 4. Lean Canvas 5. Tips for First Time Founders 1. Q&A
- 57. Lean Canvas Project Name 01-Jan-2014 Iteration #x Cost Structure Customer Acquisition costs Distribution costs Hosting People, etc. Revenue Streams Revenue Model Life Time Value Revenue Gross Margin Problem Top 3 problems Solution Top 3 features Key Metrics Key activities you measure Unique Value Proposition Single, clear, compelling message that states why you are different and worth paying attention Unfair Advantage Cant be easily copied or bought Channels Path to customers Customer Segments Target customers PRODUCT MARKET
- 58. Lean Canvas DeliveryMom 9th September 2015 Iteration #1 Cost Structure Revenue Streams Problem Solution Key Metrics Unique Value Proposition Unfair Advantage Channels Customer Segments Target customers PRODUCT MARKET Have no time to cook food
- 59. Lean Canvas DeliveryMom 9th September 2015 Iteration #1 Cost Structure Revenue Streams Problem Solution Key Metrics Unique Value Proposition Unfair Advantage Channels Customer Segments Target customers PRODUCT MARKET Working professionals In Kuala Lumpur Have no time to cook food
- 60. Lean Canvas DeliveryMom 9th September 2015 Iteration #1 Cost Structure Revenue Streams Problem Solution Key Metrics Unique Value Proposition Unfair Advantage Channels Customer Segments Target customers PRODUCT MARKET Working professionals In Kuala Lumpur Have no time to cook food Cheap, quick & convenient way to get home-cooked meals
- 61. Lean Canvas DeliveryMom 9th September 2015 Iteration #1 Cost Structure Revenue Streams Problem Solution Key Metrics Unique Value Proposition Unfair Advantage Channels Customer Segments Target customers PRODUCT MARKET Working professionals In Kuala Lumpur Have no time to cook food Cheap, quick & convenient way to get home-cooked meals Provide home-cooked deliveries on subscription
- 62. Lean Canvas DeliveryMom 9th September 2015 Iteration #1 Cost Structure Revenue Streams Problem Solution Key Metrics Unique Value Proposition Unfair Advantage Channels Customer Segments Target customers PRODUCT MARKET Working professionals In Kuala Lumpur Have no time to cook food Cheap, quick & convenient way to get home-cooked meals Provide home-cooked deliveries on subscription Facebook Marketing & Content Marketing
- 63. Lean Canvas DeliveryMom 9th September 2015 Iteration #1 Cost Structure Revenue Streams Problem Solution Key Metrics Unique Value Proposition Unfair Advantage Channels Customer Segments Target customers PRODUCT MARKET Working professionals In Kuala Lumpur Have no time to cook food Cheap, quick & convenient way to get home-cooked meals Provide home-cooked deliveries on subscription Facebook Marketing & Content Marketing Subscription model
- 64. Lean Canvas DeliveryMom 9th September 2015 Iteration #1 Cost Structure Revenue Streams Problem Solution Key Metrics Unique Value Proposition Unfair Advantage Channels Customer Segments Target customers PRODUCT MARKET Working professionals In Kuala Lumpur Have no time to cook food Cheap, quick & convenient way to get home-cooked meals Provide home-cooked deliveries on subscription Facebook Marketing & Content Marketing Subscription model Cost of food, logistics & marketing
- 65. Lean Canvas DeliveryMom 9th September 2015 Iteration #1 Cost Structure Revenue Streams Problem Solution Key Metrics Unique Value Proposition Unfair Advantage Channels Customer Segments Target customers PRODUCT MARKET Working professionals In Kuala Lumpur Have no time to cook food Cheap, quick & convenient way to get home-cooked meals Provide home-cooked deliveries on subscription Facebook Marketing & Content Marketing Subscription model Cost of food, logistics & marketing Activation rate, sales per day, churn
- 66. Lean Canvas DeliveryMom 9th September 2015 Iteration #1 Cost Structure Revenue Streams Problem Solution Key Metrics Unique Value Proposition Unfair Advantage Channels Customer Segments Target customers PRODUCT MARKET Working professionals In Kuala Lumpur Have no time to cook food Cheap, quick & convenient way to get home-cooked meals Provide home-cooked deliveries on subscription Facebook Marketing & Content Marketing Subscription model Cost of food, logistics & marketing Activation rate, sales per day, churn Strong network of 5- star home cooks
- 67. What will we cover today 1. 3 Stages of A Startup 2. How NOT to Start A Startup 3. The Lean Startup Way 4. Lean Canvas 5. Tips for First Time Founders 1. Q&A
- 68. Tips for first-time founders 1. Launch fast & learn fast Dont be afraid of people copying Execution matters more Dont spend too much time & resources Just do! 2. Hustle Get things done Want it? Goget it! Hustle for customers, suppliers, investors, mentors, peers 3. Network, network, network One part of entrepreneurship is about networking Exchange ideas, learn from each other, share resources No startup can be built in a silo
- 69. Tips for first-time founders 4. Co-founder Finding a co-founder is like finding a spouse (wife/husband) Have to work well together Chemistry Complementary skillsets 5. Tech guys Not a technical co-founder? Dont fret. A lot of tools to build websites & apps without coding Can approach freelancers at the start. 6. Spend less than RM5k for MVP Even if you fail, youve only burned RM5k. Can be recouped Tuition fees
- 70. Tips for first-time founders 7. Quality over quantity Focus on quality of service/product If need to take loss to maintain quality, do it. Your only advantage against big boys is quality, personalized service/product 8. Incorporation tips Dont incorporate a Sdn Bhd straight away - expensive Incorporate a LLP / Enterprise first 9. Dont expect work-life balance Running a startup = will consume your life No work-life balance anymore
- 71. Some useful tools / resources Resources The Lean Startup by Eric Ries Zero to One by Peter Thiel Neilpatel.com Quicksprout.com Tools Slack (Communicate with team members) Buffer (Manage social media accounts) Trello (To-do list) Google Analytics (View your sites performance) Google Drive (Share files) Wix.com (Build your own website) Appmakr.com (Build your own app)
- 72. What will we cover today 1. 3 Stages of A Startup 2. How NOT to Start A Startup 3. The Lean Startup Way 4. Lean Canvas 5. Tips for First Time Founders 1. Q&A
- 73. THANK YOU! nadhir@thelorry.com Facebook: Nadhir Ashafiq