Slide for Lean Startup Challenge Kickoff Weekend
“How the hell am I gonna get that monkey off my back?” I thought to myself after presenting my company, Socialete, to the group of excited entrepreneurs at Lean Startup Challenge kickoff weekend.
Yeah, everyone had a good laugh and I had fun presenting, but after 7 months of learning how to start a company, trying to find programmers to build our product, and countless times “iterating” our idea… I was starting to think I would never get it off the ground. It was just stuck in my head that there was no way we could launch a company without both a tech co-founder and funding.
Guess what… I was wrong. Rare occasion (like a solar eclipse), but I’m glad I was. I found out all you need is a few key tools, to stop second guessing yourself, and just go for it!
Everything just seemed to click at the kickoff last weekend. We got the direction we desperately needed from the combination of Ash Maurya teaching us how to properly use his Lean Canvas, and Brant Cooper giving his amazing insights on Customer Development. Elizabeth Yin and her company, LaunchBit, had great info on their startup guide too. (we already use it)
From the kickoff end last Saturday to today, we have went from having no website and no thought of launching, to gaining our first customers and launching next Monday. I’m sure you’re asking yourself, “How the hell did they do that?!”
That’s lean startup in action baby! That’s all I can say. Honestly, I’m in a little shock myself but pumped at how fast this is progressing. To launch a site we are using Webiva, a kickass website building platform that is allowing us to build one with limited programming skills. We can register users, build from professional looking site templates, get analytics, create marketing emails, A/B test and host our site all in one place. It’s awesome.
On the business side of things we used the Lean Canvas and customer development map to get the ball rolling. For seven months we have iterated our idea slowly. The idea stemmed from my frustrations with organizing my groups of friends to go out. I organized groups almost every weekend, yet I had to wait in line everywhere I went, pay cover and constantly stress out.
“I should be getting paid for this shit,” I often thought to myself.
And why not? That’s influential power. Marketing companies pay big dollars to reach influential people. Just look at Klout. There’s a million people out there like me, that would love to be getting something for their offline influence. So after many iterations we think we found a way to help those people AND put money in the pockets of promoters and clubs.
Being a two sided business, we built a user canvas and a business canvas (promoter in our case) and then white board mapped our customer development. These activities allowed us to defined our truly define our problem and customers. After that, it was time to start running experiments to test the biggest risks in our model.
This is a review of what we tested this week;
1. Hypothesis: Promoters want help sub-promoting and making more money- Metric: Acquisition
Something we had read but needed to confirm. So what did we do? We sold “magic”. We sent emails to promoters asking if they would be interested in a service that would “make you more money, with less-work and less sub-promoters”. It was an overwhelming response “YES”. We then set up calls to discuss our overall thought, which simply put is “A Priceline for Groups Going Out”.
2. Hypothesis: Promoters will provide deals to get groups in their clubs - Metric: Activation
Talking to your customers is the only way to learn, and occasionally you get lucky and guess right. Looks like we did for the time being because we are currently working with a few promoters that are ready to pay us next week when we launch! We are excited to test a revenue hypothesis next week.
3. Hypothesis: People want VIP treatment for less - Metric: Acquisition
With the economy the way it is and the US consumer changing to “the mindful consumer” (aka going deal crazy), it’s a fairly sound hypothesis. We had been testing this before the contest started and collected roughly 130 emails on our landing pages. I thought I would mention it since we will be using that data down the road.
4. Hypothesis: People want help planning their group outings to clubs - Metric: Acquisition
This is THE most important test that we ran and may shape our business. We assumed that people want help planning their nights out and to our knowledge that online service does not exist yet. If you’ve ever organized a group of friends to go out, it’s like herding cats. It sucks right now. We aim to change that.
From interviewing our prospective users and Adwords testing, we can solidly say that some people agree. We have a landing page set up on Launchrock and these are the Google Analytic stats since July 16th: 46 unique visitors, 9 emails registered, 1:02 avg. time on site, 80.65% bounce rate. We were pretty happy with that conversion rate.
I also tried two sets of keywords, one being very specific; nightclubs in boston, hottest clubs in boston, etc. The second being more general with one twist thrown in; drinking boston, VIP boston, bar boston, …and sex. I thought we might get lucky.
I’ll give you a hint as to which keyword got the most hits (~20). Sadly, the bounce rate was 100%.
The list gets worse... ha
Lesson learned. People googling sex are not very interested in anything else . We decided to just stick with the specific group after that…
All in all it was a successful week and we are looking forward to see what happens in week 2 of the contest. We will be launching our site, emailing people collected from our landing page, inviting friends on Facebook and Twitter and running ads. Once acquired we hypothesize that users will use and pay for the service. We will continue to test hypotheses #1 & #2 & #3. I think our user demographics will be interesting as well. We assume they are 21-35 yr old planners, who work, are club goers but not avid ones, smartphone users and have an annual salary >$30K.
Wish us luck on our launch Monday!
Congrats on taking the plunge! Looking forward to another well-written blog post next week about how the launch goes. As part of your discussion of the revenue hypothesis, it would be great for us readers to understand how you approached your pricing model.
Regarding your hypothesis #4, as you work on the marketing channels to attract the “people” category, I imagine it would be quite valuable to do two things: (1) try several different ways of cutting the customer segments, and (2) for each segment, try to focus the communication channels on the places and times which are most relevant for that segment. For example, if you cut your customers by occupation and focus on the student population, you might evaluate the return of putting flyers on campus against the return of doing targeted adwords. You could also get some great insights around when to reach out to potential users – for example, I would imagine they would be more likely to sign up for a service like yours on a Thursday after 3PM vs. on a Tuesday at 9:30AM. Insights like that could help you refine your marketing channels to get the best bang for your buck.