Ash Maurya's Blog, page 8
July 9, 2015
The Problem With Funnels
The problem with funnels is that they assume a linear flow.
when in fact the customer journey is usually non-linear.
Funnels place lots of emphasis on conversion rates,
but not nearly enough on conversion times.
They only focus on numbers,
but miss out on the bigger picture:
All metrics are people first.
July 8, 2015
Don’t Waste Your Time on Competition
We spend a disproportionate amount of time worrying about competition.
We want to be different.
So we anchor, position, and price against them.
But all this is predicated on the fact
that your competition has a clue.
If they are a startup or even a big company in a new environment,
they are probably as lost as you.
Your true competition is not determined by who you think they are
but who your customers think they are.
Instead of drawing feature comparison matrices or
running elaborate SWAT analysis,
go study your customers.
The key question is asking them:
“How do you solve “this” problem today?”
If the usual suspects of competitors come up,
then by all means you have to take them on,
but otherwise, they don’t exist.
Instead look for a new list of existing alternatives
that you need to anchor, position, and price against.
July 7, 2015
Making Happy Customers vs Making Customers Happy
Making customers happy is easy.
Just give them lots of stuff for free.
But that doesn’t lead to a working business model.
Making happy customers, on the other hand,
is not just about making customers feel good
but about what they do with your solution.
It’s about the results.
July 5, 2015
The Entrepreneurial Method
It’s no secret that breakthrough ideas evolve from seemingly small and often unintended discoveries. But because these discoveries were accidental, it’s easy to write them off as lucky breaks when the reality is exactly the opposite. Each of these discoveries were made under conditions of extreme rigor and procedural testing – what we can attribute to the Scientific Method.
The Scientific Method is a body of techniques for investigating phenomena, acquiring new knowledge, or correcting and integrating previous knowledge. If we look back in history, we can see a marked increase in the pace of breakthrough discoveries after the introduction of the Scientific Method.
These breakthroughs are less about luck and more about a rigorous search built on the foundation of empirical and measurable evidence. Furthermore accidental discoveries aren’t limited just to the world of science. We see lots of parallels in the world of startups and innovation as well.
Google’s now famous PageRank algorithm that powers their mission of “organizing all the world’s information” started out as a less ambitious project for ranking academic papers at Stanford University. Even while their search engine continued to gain market share, Google struggled for years to find a sustainable business model.
Their breakthrough discovery came when the company conducted a small experiment pitting an auction-based ad system, they had heard another company using at the time, against traditional banner ads. The results on that single day of testing surprised even then CEO Eric Schmidt.
Both the world of science and startups are plagued with conditions of extreme uncertainty and while startups aren’t a perfect science, we can still learn a lot about navigating this terrain of extreme uncertainty from the Scientific Method.
The thinking goes that much like the adoption of the Scientific Method accelerated the pace of scientific discoveries, the adoption of some Entrepreneurial Method will accelerate the pace of business innovation.
Money as an Accelerant
We constantly wish we have more money.
More money lets us upgrade on everything.
It lets us hire more people.
It lets us build more features.
It lets us grow.
But money is only an accelerant.
It only lets you do more of whatever you are already doing – faster.
If you don’t yet know what you are doing,
it only gets you lost faster.
Even when you do know what you are doing,
upgrading on all fronts at once,
only lowers overall throughput.
More people mean more miscommunication.
More features mean more complexity.
Money is like rocket fuel.
Carefully used, it can get you to your destination.
Carelessly used, it will either blow up in your face or
get you lost in deep space.
July 4, 2015
Use Tiny Habits to Create Big Changes
Behavior change is hard.
I wanted to create a habit of writing everyday.
My usual posts are 2,000 words and
take several hours to research and write.
Not going to happen on a daily basis.
So I adjusted the goal.
Instead of writing 2,000 words,
I scoped down to 200 words.
Instead of spending hours on elaborate research,
Or waiting for something worth writing about,
I chose to write about the one big idea of the day.
And constrained the writing time to 30 minutes.
Lastly, I coupled when I write
with a pre-existing daily habit:
My morning coffee.
The result:
I’ve written every single day for the last 42 days.
The first few days required deliberate intention,
but now my morning coffee creates
a pavlovian response to write.
If you want to learn more on tiny habits either
to change your own behavior or
that of your customers,
look up BJ Fogg (Tiny Habits) and Nir Eyal (Hooked).
July 3, 2015
Timeboxing
Time is our scarcest resource.
Rather than asking:
How much time do I have for a project?
Ask instead:
How much can I get done in X days to move the project forward?
Make X fixed – irrespective of the size of the project.
Make X as small as possible – 2 weeks is a good starting point.
Make learning about what’s riskiest the goal.
After X days, review progress and determine next actions.
This is the basis of time-based iterations
or timeboxing.
The power of timeboxing is that
As long as the world doesn’t come to an end,
that time will come.
Time waits for no one
which can be both a limiting constraint AND
a forcing function for action.
“To achieve great things, two things are needed: a plan, and not quite enough time.”
– Leonard Bernstein
July 2, 2015
Starting Constraints
Entrepreneurs seek to overcome internal constraints
like team, money, equipment.
But starting constraints are almost always external.
Starting constraints are almost always market constraints.
During business modeling, market demand is usually
assumed to be some non-zero percentage of
our total addressable market captured
as Customer Segments on the Lean Canvas.
Otherwise it wouldn’t make any sense to pursue the idea.
But it still needs to be tested.
Market demand is tested through user acquisition.
If you can’t drive any visitors inside your factory,
none of the other steps matter.
It doesn’t matter how good your product is,
or what referral incentives you build.
No one will ever get to them.
June 30, 2015
User Growth versus Profit Growth
There are 2 ways to grow a business:
Grow your number of users or
Grow your profit per user.
The first assumes a single customer segment business model
which usually doesn’t match reality.
Most businesses end up attracting
many different types of customer segments
that aren’t equally profitable.
As a business owner you have to first ask yourself
which customer segments you want to serve,
then optimize your business model for them,
before pursuing user growth.
Pareto’s 80/20 Principle
The road to innovation
is riddled with extreme uncertainty.
At any given point in time,
there are often a myriad of possible data points to consider
and actions to take.
But Pareto’s 80/20 principle also applies here –
where 80% of your results will only come from 20% of your efforts.
The key question, of course, is what 20%?
Incorrect prioritization of risk is one of the top contributors of waste.
