Metrics are a very important part of the Lean Launchpad process. By keeping track of interactions with customers in a variety of ways you are building a convincing story about the viability of your business model; a story that will be invaluable when you start selling, acquiring users or raising money.
Some of the things you’ll need to be measuring can be tracked with a simple spreadsheet:
- Customer conversations
- Development milestones for your Minimum Viable Product (MVP)
- Customer roles and relationships
Interactions that take place online, via the Internet or mobile, are a different story. Google Analytics is free software activated by placing a line of code into your site or app. That line of code gathers a wide range of information about those interacting with your site or product including:
- Where, when and how (what device or browser was used)
- Length of interaction and where you ‘lost’ them
- Hotspots on your pages
- Behaviors within apps and sites
- Their ‘path’ through the experience you are providing
…and much, much more. So much, in fact, that even experienced users of Analytics often miss important stats and metrics or don’t understand how to use them to do testing. Fortunately Google offers a service called Analytics Academy that provides both structured and self-guided courses for both beginners and experienced users. Find out more here.
This really isn’t optional, though many startups don’t take full advantage of it. The reason I say that, is it gives your startup an incredible advantage as you gain sophistication with these powerful tools.
We start at 1pm in the Bausch and Lomb room in Cutler Union at MAG. Teams and Mentor/Advisors can visit the Gallery prior to the session at no charge. It’s worth seeing the current modern Japanese Print show !
VentureBeat has coverage of a study done that seeks to quantify the value of joining an accelerator program like the HTRLaunchPad and it makes a pretty compelling argument for their value:
“Direct involvement may be the most important factor, even if it cannot be easily quantified. A 2007 Kauffman study found that angel investors can get outsized returns if they offer a high level of diligence and direct involvement. Thus, we think its critical that entrepreneurs and VCs consider an accelerator by whether its leadership has done their homework on their prosective members’ underlying markets, and by whether they have teams ready to dedicate time and resources to help their business.”
”Based on these historical results, we found that companies in accelerator graduating classes from before December 2009 returned 11.3x on capital invested. These are fantastic returns for entrepreneurs, VCs, and accelerators.”
Bear in mind that the programs studied typically took an equity position of 6-9% in exchange for an investment of $15-20k. The numbers also reflect a couple of huge gainers (AirBnB, Dropbox). We don’t currently take equity positions in our startups.
The Business Model Canvas is a work sheet
The canvas is a central tool for capturing what you learn during your customer discovery process. You start by making a best guess at filling out each section, knowing you’re almost certainly mistaken. Then you go out and talk to people, focusing initially on defining your problem, solution and audience (Value Proposition, center box). Getting this right is the ultimate goal of the HTRLaunchPad process because accurately defining a value proposition means you’ve found your scalable, profitable business model.
But there are nine boxes on the canvas and each contributes to your knowledge base. You may, for example, be discussing pricing and find that the market wants the service bundled with other services by a third party (channel). Even if this was not the focus of your conversation it is valuable and what you learn should be added to the Channels box on the Canvas.
As you proceed there is going to be a lot of erasing and rewriting of your work sheet. Things you assume are correct early on get revised or completely changed. And during the process the Canvas serves as a snapshot of the knowledge you’re accumulating and the progress you’re making. It may even tell you that you’re not making progress and have to consider a change in plans (pivot).
When you’ve had your 120-150 conversations your Canvas will represent your business model. You should have a much clearer idea of how you market, operate, generate revenues, your financial requirements and more. It all fits into the Business Model Canvas which becomes, at that point, a model for your operational business plan.
It’s a deceptively powerful tool that forces entrepreneurs to succinctly define all the important pieces of their business on one page.
Tomorrow, Friday Feb 21 at the Brainery in Village Gate (entrance between Empada Steak and Dark Horse Coffee, go straight, turn left, it’s on the right). The session runs from 3-5pm.
This is the second Mentor/Advisor Training session and will include brief intro presentations by the new startup teams chosen for the 2014 HTRLaunchPad.