The Lean Startup Meetup last night was a blast. The KissMetrics team did a wonderful job outlining the central tenets of lean methodology and tied it to examples their startup careers.
I was particularly intrigued by three concepts that emerged during the conversation:
When testing out new minimum viable products, build only 50% of the feature set and then release the product. Next, enable any developer to make changes to the product on-the-fly based on customer feedback, forgoing the development prioritization process during the product iteration phase. Once the product/market fit target metrics have been satisfied, re-evaluate, re-design and re-architect the infrastructure to scale.
Pricing discovery is more science than art. Start with an initial price point and then A/B test. Ensure that the tests include conversion through credit card submission to get accurate data. There are various ways to structure tests:
- Simple A/B testing across your audience at different price points
- Start with a high price, then offer limited time discounts or coupons
- Try a universal price increase, but charge the customer the lower price anyway (increases customer satisfaction)
Define key metrics for the business precisely. Measuring anything is easy, but rigorously measuring the right thing is challenging. When designing goals for the company around conversion rates, measure the conversion rate of 14 day trailing sign ups conversion to paid over the past 7 days for only new users, for example. Narrowly defining metrics ensures consistency of measurement and reduces the impact of outliers and rare conditions. Analysis of cohorts, or users who joined on the same date, are effective to understand the impact on user behavior of changes
Looking forward to the Startup Lessons Learned Conference tomorrow!