Intrigued
You know a customer is intrigued when they request more information, whether online or offline. They might sign up for a newsletter, request a sales call, or activate an online chat window.
You make them intrigued through messaging and positioning. The primary role of messaging is to share the benefits your product will have on your customers’ lives. Positioning describes where you fit in the customers’ view of the market. In other words, how do you compare with other products? What’s the compelling reason to buy you, your primary differentiation?
Intrigued activities:
Intrigued: |
Web copy, brochures, video, webinars, inside sales calls, presentation, in-person sales calls, model, TechCrunch, interview. (Many awareness tactics work here, too.) |
Aware
Awareness is indicated by first visits to your website, new Twitter followers, Facebook likes, and inbound e-mails or phone calls.
There’s literally no limitation to the methods used to attract attention. The key is to match tactics to market segment and where you are on the adoption lifecycle. Although creating awareness is the first thing an entrepreneur wants, it’s the last thing they should attract. Awareness activities can break the bank. They will attract people you do not want as customers, who you’re not ready for. Instead of buzz, you get noise.
Advertising and PR work, but if you pay a PR agency $15,000 per month, they will likely attract tens of thousands of visitors to your site. How many will you sign up? Among those who sign up, how many will buy? Of those who buy, how many will use the product? Of those who use, how many will become passionate? Of those who love your product, how many will help populate the top of your funnel?
If you don’t know the answer to the last question, then you don’t know what the lifetime value of your customer is and, therefore, you cannot know if the $15,000 per month for that PR agency is the right choice!
Aware: |
PR, social media, blogger outreach, SEO, advertising, podcasts, video, blogging, magazine articles, news stories, billboards, sign twirlers, promo teams, tradeshows, direct mail, cold calls, surveys, megaphones, TV commercials, radio commercials, etc. |
Growth Waves
Growth isn’t magic. Growth is determined by customer passion + cash-flow-positive customer acquisition. Yes, you can buy customers, but that’s only sustainable in very high-margin businesses. Think dot-com fiasco of the 1990s. That was a lot of buying customers and little of customers buying.
First Wave
Customer passion indicates that you’ve nailed the value proposition per customer subsegment. Your first wave of growth comes from learning and then executing on marketing and selling to that subsegment.
Danger lurks in acquiring customers from multiple segments at this point.
We once worked with a company whose CEO came to us all excited about their growth. “We’ve hired this great vice president of sales, he’s totally kicking butt. We’ve closed half a dozen deals in the last month and things are really taking off!”
Several months later, we heard from him again: “We had to let the sales guy go. Turns out he sold 10 deals to 10 different segments. They all wanted different things. We couldn’t find any commonality. It was a nightmare!”
Thing is, that sales guy was doing what he was supposed to do, but he was the wrong salesperson for the company stage.
For online products, it’s difficult to not acquire multiple segments. This is okay as long as you rigorously create buckets to store them in and monitor sales, marketing, and support costs. Here are some potential differences between subsegments:
Varying depths of pain felt will result in different engagement, different requirements to achieve passion. Hanging out in different places requires different marketing tactics.
Different funnel conversion steps require different marketing and sales activities.
Related but slightly different value propositions result in different product requirements, different messaging and positioning, and different paths to passionate.
When acquiring early adopters or early mainstream customers opportunistically, these differences may not materialize; they will only rear up when you attempt to scale.
Have we mentioned to start small yet? As we’ve discussed, look at your target market segment. Go back to your personas you created in Chapter 3. Where does he or she hang out? Presuming you add value for the person, how are you going to get their dollar? Experiment and then optimize reaching out to them.
Keeping in mind that your goal is to achieve cash-flow-positive customer acquisition, the lowest-cost option is to look online.
In the United States, it’s very likely your customer is online.9 That doesn’t mean, however, that Internet users are created equal, especially when it comes to different products. People act differently online depending on what they’re trying to accomplish.
Do they search for solutions to problems?
Do they click on sponsored results? Ads?
What do they use for their home page?
So is search engine optimization an important tactic? Is search engine marketing? How much content should you be creating?
Like the Internet, e-mail is now clearly in the late majority in the technology lifecycle adoption curve, which means most customers are reachable that way, but there are rules to abide by. What offers can you make? How can you induce your readers to share the content and increase subscribers?
Do your users subscribe to e-mail lists?
Do your users click on e-mail links?
Do your users share e-mail with others?
What other ways do your users interact with the Internet?
Do they read their influencers’ blogs?
Do they blog themselves?
Do they comment on blogs?
Do they click on ads?
Do they follow links recommended by bloggers?
Should you be reaching out to your customers’ influencers online? What kind of offers can you make for the blogger and her readers? What’s in it for the influencers?
Are your users part of online communities?
Do they participate in online forums based on hobbies, interests, or shopping?
Do they post to Facebook? Tweet?
What hashtags do they follow? Which influencers?
Do they interact and comment on music, movies, restaurants, products, services, stores?
What offers can you make to communities and community influencers?
Reaching these influencers is key to early marketing efforts. Think about it. If you’ve created value with a group of people—a segment—and someone else wishes to capitalize on your relationship with that segment as an influencer, you will weigh the request carefully.
As an influencer, you balance the value being provided to your segment, the value bring created for you personally, the future potential value, and any costs to your relationship with people in your segment.
Imagine you run a meetup group for lean startup believers. Someone reaches out to you and says, “Hey, you’ve got a great group. I teach people how to write business plans. I’d appreciate it if you could tell your members about my upcoming workshop.”
What’s in it for you? Your members don’t believe in writing business plans. You don’t know the guy reaching out to you, so it’s hard to imagine any future benefit to you. So your equation looks like:
Doesn’t look too good. Now say the guy is a pretty well-known author, who has a huge following. Now your equation might look like:
Potential access to the author’s network might have a huge upside for you at some point, but how does that weigh against the blow to your credibility for having recommended the workshop that goes against the group’s values?
After declining again, this self-help author, life coach, and business-plan guru offers you $10,000. Hmm.
This time when you decline the offer, the business-savvy author says, “Look, I’ll tailor the discussion so it’s not about writing a business plan but, rather, how to think through the standard aspects of a traditional plan. Even if you don’t write a plan, trying to understand your business is a good thing. The workshop is free and I’ll buy beer.”
The point is that when you reach out to influencers, you need to understand the value they create for their constituency and how you can add value to the influencer.
Watch what other marketers are doing and what is working. Marketing tactics come and go cyclically. What’s hot works until it doesn’t. Think about how you are being marketed to. If you watch TV, listen to the radio, read web ads, or click on Facebook ads or Google AdWords, think about what worked. Think about how they found you.
As you succeed in reaching more users, it’s more critical than ever to define buckets for your users and keep track of their shared and unique characteristics. More than this, you must correlate your value proposition for each bucket. You must track engagement, passion, feature requests for each bucket.
Second Wave
Your second wave of growth comes from nailing the rigorous process of adopting multiple subsegments.
The difficulty in tracking and managing multiple segments varies by product and customer. In the B2B world, not surprisingly, the larger the business you’re selling to and the more complex the product, the more focused you must be on one segment. In the classic crossing-the-chasm sense, the bigger the fish you capture, the more you want to concentrate on dominating that one segment before moving on to the next.
As businesses transition toward Internet-based products, marketing, and selling, you can adopt multiple segments faster. You still face the same multiple-segment issues discussed earlier, but on a smaller scale. The second wave looks an awful lot like the first wave, only you need more resources to do it.
You use build-measure-learn (BML) to interact with customers to learn how you can get them from “meh” to satisfied and from satisfied to passionate. You use BML to run experiments to validate what you’ve learned. You use BML to test marketing and sales tactics. You run BML against individual subsegments. You say no to customers that end up being outside your vision and core value proposition (unless you decide to pivot to that segment and leave the others behind).
This is a painstaking, rigorous process. It does not come quickly. If you already have 1,000 customers and you don’t know how to get to the next level, pick up the phone. Literally. Pick up the phone and start calling each customer until you pick up a pattern. Who are these people? What are they trying to accomplish?
They are not, by the way, trying to accomplish installing your software. Their problem is not trying to make more money. They are not hiring your product in order to view your dashboard.
Use root-cause analysis to figure out why they are installing the software, how they’re trying to make money and what their business-model bottlenecks are, what they’re trying to use the dashboard for. Ask why—five times, if necessary—to get to the urgent need your customer has.
Third Wave
The third wave of growth comes from that same need to generate buzz entrepreneurs clamor for since first conceiving of their product idea. When do you know you’re ready to help generate buzz?
When buzz is being created by your execution, not PR.
Buzz happens when you dominate a market segment or are doing well in several subsegments. You can’t keep a lid on it, because your customers are already passionate, remember? This is truly product-market fit. Buzz at this point is easy. Media are clamoring for such stories.
Product-market fit isn’t what one has discovered through customer interviews or viability tests. Product-market fit comes from the market validating your product. It occurs after iterating through market segment definitions, product functionality, and even messaging and positioning. When all three values line up as with a slot machine, and you close the word-of-mouth loop, you can declare you have found product-market fit.
The only reason why you find it hard to create buzz now is because you’re not ready. You get there by adding subsegments until it happens by itself. PR is used to scale existing buzz.
As you reach for the mainstream, your marketing must appeal to multiple subsegments. This allows you to drive larger, more expensive marketing campaigns that bring more people into your fold.
This is where traditional marketing comes to the fore. Radio, TV, print ads, and PR bring thousands of new visitors to your doorstep. The messaging and positioning is broad enough to allude to the core value proposition for broader, more traditionally drawn market segments. This only occurs after you’ve developed the affinity from the ground up. It only comes from understanding your customers deeply.
PR is changing and requires less agency work than in the past. You can create your own relationship with online media editors. They are looking for your contributions. Start small here, too. Ryan Holiday says, “Starting small is your beachhead into the news cycle. Blogs have enormous influence over other blogs—making it possible to turn a post on a small site into posts on large-traffic sites, as the bigger often ‘scout’ the smaller sites. Blogs compete to get to stories first, newspapers compete to ‘popularize’ it, and then everyone else competes to talk about it.”10 In the B2B world, influencing data analysts like Gartner work. It may not be fair, but that’s the game. You also may have to wine and dine your customers.
There’s no magic bullet for customer acquisition. Starting small allows you to more easily track your cost of acquisition relative to purchase, lifetime value of the customer (how much the customer will spend over the duration of being a customer), and velocity (time to cover the cost).
Your customer’s perceived relationship with you will depend on how they view your attempted acquisition.
Subscribers don’t want to continue to be marketed to; they want a respectful relationship. How can you improve upon the value you are creating for them? How can you create new value? How do you reward their loyalty?
Repeat-transaction customers often appreciate reminders, like upgrades, accessories, deals, and such. They want special treatment to bring them around again. High-cost single-transaction customers expect service follow-up, and they also may appreciate relevant up-selling, maintenance contracts, and premier support options.
Network-effects relationships respond to ways to increase their network, status effects, and gamification.
Marketing will continue to evolve. White papers and case studies are transparent efforts to influence decision makers, but presumably they still work. Often they’re used to demonstrate due diligence to higher-ups, even if never read.
Remember, even if B2B sales requires Kabuki theater, people are paid to perform their jobs, and so they will go through the machinations and you must allow them to if you want to close the deal.
You must determine what scaling means to your particular business and what levers you have available to manage the growth. Scale depends on many factors, including values, capital on hand, customer segment, and revenue model.
“Values” simply refers to the point that if you don’t want to go big, you don’t have to. Scaling might mean modest year-over-year growth, or even no growth at all. For most businesses, scaling requires money beyond revenue. Limiting growth funds to cash on hand is fine, but one needs to be aware. Customer segment determines ability to pay. If you’re tackling different segments, you will likely see a different growth trajectory for each. The revenue model—how you are paid—determines what metrics to track.
Fundamentally, growth takes money. You always pay out in order to get paid. Typically, you must pay for sales and marketing, plus other business operations, in order to realize revenues. Sales and marketing are usually measured versus revenues because they increase relative to sales. In other words, over time and generally speaking, operational costs are constant and so decline per customer. Sales and marketing, however, increase over time, but hopefully at a slower rate than revenue growth.
Since you pay out sales and marketing before revenue, you must have cash on hand. Cash can come from last month’s profits, bank loans, credit cards, venture capital, and so on. Measuring the lifetime value of a customer (LTV) versus the cost to acquire a customer (COA) tells you if you can acquire customers profitably. For every dollar you put into a customer acquisition channel, you know you are returning 1x, where x is the LTV.
But while the LTV may be greater than the COA, each purchase does not cover your sales and marketing. You can’t wait to realize the lifetime value of a customer before acquiring the next one! The closer the average deal size or the average revenue per customer (ARPU) is to the COA, the further each dollar you have today goes. By driving up ARPU or driving down COA, you increase the number of customers you can acquire per dollar over a given time period.
Tracking the cost of acquiring (COA) one customer and the average revenue you make per customer (ARPU), allows you to manage how quickly you can grow.
Assuming ARPU > COA, if you reduce the cost to acquire a customer by half, you can double the numbers of customers per dollar spent. The length of the sales cycle is important too, since you are essentially financing the cost of acquiring a user prior to the sale. How many sales does it take to pay for lengthy sales cycle in the B2B world?
Word-of-mouth is the real money maker, which is why we’ve spent so much time discussing product passion. Word-of-mouth only happens when a customer is passionate or loyal about a product and when you leverage the passion through specific business activities.
Experimenting with more expensive customer acquisition channels only makes sense when you understand your growth levers. Startups tend to start with labor-intensive, but low-cost, acquisitions in order to work toward expensive acquisition channels only when the core value proposition is well understood across multiple mainstream market segments, organic growth is occurring due to product passion, and the business is moving toward larger customers with higher margins.
The trajectory might look like:
Search engine optimization, including content creation via blog, social media, video, e-books, etc.
Search engine marketing, including Google AdWords, Facebook, and the like.
Affiliate marketing, blogger outreach, bundling, and influencer and segment hangout targeting.
Online advertising targeting Internet properties specific to market segments “hangouts.”
Traditional media, including trade magazines, radio, market analysts, PR, and television.
For all outreach, whether online or offline, you should consider including an online, measurable call to action.
Case Study: Ten Lean Startup Buzzword Questions with Rob Fan
Lean Entrepreneur: Let’s get the formalities out of the way. What’s Sharethrough?
Rob Fan: Sharethrough is a native video advertising platform. By native, we mean we integrate advertising content naturally and openly into websites. We work with brands and agencies to distribute high-quality video content they’ve created through their network of publishers. We report back what was successful and what wasn’t. The primary pain point that we solve is getting an audience to the content they’ve spent hundreds of thousands producing, that they have no way to drive an audience to.
LE: Okay, on to our real questions. Question 1: What was your MVP?
Fan: When we started out, my partner, Dan Greenberg, and I had a couple of different products going. In 2008, we had a Facebook application company. We built a huge network of Facebook apps and at one point were the third biggest Facebook app company by daily active users. At the same time, Dan was doing viral video consulting, helping brands make viral videos. We saw that we had tons of content inventory, tons of publishers, so we thought, let’s try to take some of these videos and let’s put them into these social applications and see what happens and see if it’s valuable to the customer.
LE: Like chocolate and peanut butter. You guys were the Reese’s Peanut Butter Cup of Facebook!
Fan: Ha ha, yeah, sort of.
LE: Sorry. So Question 2: What was your first pivot?
Fan: Yeah. So what’s funny is we actually never did a pivot . . .
LE: How refreshing.
Fan: Yeah, but we did go through a kind of refocus of the company. Along the way, we hit a point where we had to make a choice. We started building out this ad business within the company, and building out brand relationships and building out technology that we needed, while also maintaining our Facebook applications network. Along the way, we realized that trying to focus on both was just not something we could do as a nimble startup. So we ended up spinning off the Facebook apps and focusing on the ad business.
LE: Question 3: What’s a warning for entrepreneurs about lean startup thinking?
Fan: Because we were so early, I think we fell into a bit of a trap when the second MVP we built, which wasn’t much more sophisticated than the first, took off and was enough to scale the business for quite a while with only minor iterations.
I think because we were so far ahead in terms of where we believed the market was going, our MVP was solving enough pain that we didn’t need to worry about product, and so when you fast forward, three years later, we paid the price for that. It’s your classic startup story. We know that there is competition around us. The marketplace is changing. People are becoming more aware of the market. We can’t just keep on doing what we’re doing and expect it to be enough. So we realized we need to refocus on product. What’s interesting is that for two or three years, there was only myself and three other engineers. We never expanded the engineering team because things were going fine and we had revenue, but it also meant that when you’re operating a full-on business with very demanding customers, you’re also not innovating product, because the entire engineering team is focused on keeping the engine running.
LE: Question 4: What’s the most dangerous vanity metric?
Fan: Cash. We’re fortunate to be in a cash-rich business; there’s lots of money going in and out. But, one thing I’ve learned through the years is that cash can be misleading: If it’s a big number it sounds great, but it doesn’t mean you’re setting yourself up to succeed. The best learning is not cash.
LE: We should be in your line of work.
Fan: Cash is essentially like the user metric for us because every time we close a deal it’s just like users signing up. But more important is if the brand comes back to us and uses us again. What’s more important is that we continue to grow out the number of publishers we work with and expand the network so it’s more attractive for the advertisers. Those metrics, which aren’t nearly as sexy, are actually the ones that determine whether we are viable as a long-term business.
Source: World Gone Sour (The Lost Kids)—view the video at http://youtube/tw7uhVtpI5I.
I’ll be the first to say cash is what kept us afloat. It’s what allows you to make mistakes, right? If we weren’t the type of business which brings in a lot of cash, we couldn’t have made the mistakes we made along the way. But still, it definitely doesn’t guarantee you a fast track to success.
LE: Question 5: What is product-market fit?
Fan: I think of product-market fit in terms of the technology-adoption lifecycle. Early on you have your evangelists, and those are the guys who, no matter what, you show them any shiny new object, they’ll jump on it and start using it and they’ll be passionate about it and they’ll speak to it and report bugs. They’ll tell you what to do, what not to do, but that’s not product-market fit.
Product-market fit is when you reach the mainstream customer and of course it varies by business and you have to define who your mainstream customer is. But when you have the mainstream acting the same way as an early evangelist, that’s product-market fit. Are they get excited when you come in to talk about your product? Do they have opinions about it? Do they have feature requests for it?
It really comes down to identifying who is that person with those requests. If it’s someone who you have seen to be mainstream in that industry, then I think you’ve definitely got product-market fit at that point. Then it’s like, “Oh, we need to keep on building on top of that.”
LE: Question 6: Best customer development learning?
Fan: What’s funny is that both myself and my co-founder have no experience in the ad industry and the media world and it is probably one of the most convoluted, confusing industries to understand. So, I think, taking a very deliberate path that customer development talks about and mapping out customer archetypes and putting them up on the board: Who are the archetypes? Who makes the final decision? Who is the actual executor of the contract? What are they motivated by? Doing a lot of that stuff helps solidify, who are the people that we’re talking to and what do they want? What do they care about? How can they help us build the right product for them? I feel like we knew that there was a big budget in the media world but we had no idea how to tap into it.
The biggest thing, however—this is probably the biggest learning: Madison Avenue does not think in a very rational way or in a very logical way. I feel like a lot of startup companies go, “Wow look, I built an amazing product and now I just need a brand to buy into it and obviously they’re going to buy into it.”
What they don’t understand is that there is an entire method to buying into it and that concept is absolutely foreign to them. So the biggest learning that we had, I think, was recognizing that one, the primary customer in the media space is actually 21-, 22-year-old new college grads who control millions of dollars in advertising budget. They’re the ones who, in the end, say yea or nay to working with your company. Oddly, or not surprisingly, they aren’t exactly motivated by what’s best for their brands, what’s best for their agency. They’re sometimes motivated by who gives the best drinks, who throws the best parties, who is the most fun to talk to and hang out with. It’s one of those things that, for me, especially being an engineer and from Silicon Valley, I was completely thrown back and I soon realized how relationship driven this world is.
LE: Question 7: How do you lean startup B2B sales?
Fan: Steve Blank wrote his book primarily from a B2B perspective because it was out of his Epiphany success, but I think the lean startup movement moved toward consumer-based startups and web-based startups. So you get a lot of different information out there focused on consumer startups versus enterprise startups. But the business-to-business model is actually the angle where customer development works the best.
I think the confusing part, when you’re doing B2B with a field sales team, is filtering the noise from the signal, because you have people whose main job is to be out of the building, but their incentives might not be aligned with what’s right for the company. You then have to really understand what you need to build that will help you learn versus what you need to build just to close a deal.
Our first salesperson was my co-founder; he’s an amazing salesperson. So he was doing everything on his own. He was able to build a lot of really great initial relationships, but it was not a scalable way to grow and we were very cautious—everyone has horrible stories about hiring the wrong vice president of sales and then having to start sales over and over and over.
So we were very aware of that and we thought maybe we’re just out winning in the market because my co-founder is just an amazing salesperson, right? If you have amazing salespeople and your founders are just so charismatic and able to sell that they could sell anything, sales is maybe not a good indicator that your product is ready for the market.
So what we did was bring in an outside rep firm to sell our product. The idea was that if these professional guys cannot sell, our product is not ready to go.
So we said, “Let’s give it a shot,” and almost immediately, like two or three months later, we were hitting channel conflict.
We put together the collateral. We had to present the decks. We had to give them one sheet. We had to print all this stuff for them. So there was a lot of stuff that we had to put together for this but, again, part of, in the lean way, you essentially are iterating through . . . having a rep firm there helps you iterate through it and just having a professional salesperson already say, “That does not look like one sheet. Do it again,” is valuable input before you would go to the client.
It was catching on very quickly and we said, “Okay, this is obvious, we need to hire a vice president of sales right now.”
We’re constantly iterating our decks and iterating our pitches and what we’ve had to do now is, now that we’re a much bigger sales team, is figure out how to do it in a, I guess, tempered way that doesn’t make the sales team go crazy but we’ve constantly been iterating the way or honing down the way we communicate, the way we position stuff, the way we present stuff. That’s something that we’re constantly doing. So I like going out on sales calls every now and then, even though I’m the CTO, and my co-founder is out all the time and that’s one of the things that we’re doing when we’re out there. We’re just testing different concepts, different ways that people are thinking of stuff and bringing it back and incorporating into kind of how we’re talking about it.
The way we’ve been able to do it right is by staying on top of all the things that are coming in, and so I think part of the great advantage we have is that my co-founder is still going out and regularly being on these sales calls and we have some pretty savvy salespeople who are able to cut through the crap and really understand what they’re talking about; what they are saying, so they can bring back actual good feedback and we can figure out a way to position ourselves around it or put ourselves in front of the potential competitor or the issue that’s happening so that we’re never in a reactive way. It’s hard for me to recall the moment when we’ve had to be super-reactive to something out in the field.
LE: Question 8: Do you practice continuous deployment?
Fan: No. We could be and I think we’ve thought about trying to get there but we just never got to that point, and I think the reason is that, in our business, we automatically have tons of scale. So, from the start, there never was this opportunity to start slowly building the tooling around it to allow us to get to the point where we could use continuous deployment.
I actually think of everything as inventory and unused inventory. There are moments when it’s like, “Ah,” because if we were only doing lean continuous deployment it would help but I think of one of the learnings I had, actually really early on, about just the entire agile thing. I had no idea what agile development was and I had to learn my way into it and I remember being extremely daunted by hearing Ries describe how his engineering team operates and how they would build software and I kept on thinking how my engineering team is so inferior. I don’t know how the hell I’m ever going to get to that point, and I was thinking, “You can’t take a team from zero to a hundred.”
You can read about the hundred and you can try and get to a hundred, you could dream about it, but it’s not going to happen overnight and, for the most part, if you get up to even 20, from 0 to 20 is a win.
The entire thing behind agile is that there are many different flavors of agile and you can pick and choose what pieces of agile you wanted to do, as long as there are some core things that you continue to do. I think that’s what people miss about agile, which kind of gets left out of the entire lean startup conversation, is a real conversation about what to pick and choose out of agile and what are the right parts of agile that really help? I think getting to the point where you start thinking of things essentially as backed up inventory or unused inventory. They’re good mental models to help you kind of understand how to operate in that world.
LE: Question 9: Any thoughts on technical debt?
Fan: The path we took is a story of not keeping an eye on technical debt and letting the business totally run and control the product itself. This is kind of going back to our MVP being too successful, when we just kept on building on top of the MVP without really thinking about the long-term needs of the business, but essentially operationalizing the product without building out the foundation of the product so we could continue to build on and innovate on top of it. So we definitely hit a point when we were forced to . . . and this was actually, for me, it was like on Thanksgiving and I had to stay up all night and figure out how to scale up machines and how to keep the cache machines up for the next few days as best as possible, knowing full well that it was going to start crashing again very quickly. I was like, “All right, you’ve taken on so much that there’s no way to even scale it in the right way that we’d probably have to . . . have to start from scratch” and that was, I think, one of the things that was a big setback for the company at the time.
The other realization that I had along the way was the business is around core product. There are many pieces of our product. The ones at the core of the business is an ad server and that’s essentially what is the lifeblood of the company. The decision we made at first was because it’s core, we’ve got to own it, we have to build it. So we spent a good two years building this custom ad server for our business needs. The problem was that it couldn’t scale and it created just a huge operational burden on the engineering team at the time. At the same time, I would just log into all these other ad servers out there, which were already built and done. And it’s like, “Great, it does exactly what we need and it’s done.”
So when I realized we needed to scale, I thought, “Right, why do I even have to worry about this stuff because, one, it’s not helping me learn. It’s not accelerating the business at all and, aside from just being a cool engineering challenge, it’s not benefiting at all.” So that was when I made the decision, “All right, let’s use a third-party ad server.” It may be core but it’s, you know, not the most efficient use of our time.
Having an ad server that doesn’t work, doesn’t help the business learn or move forward at all, even if it is core.
I think the fear that I had was that this is such a core piece of our technology. We should be building it. We should be owning it and I think there is the right time to do that but when you’re into the learning phase, use as many third-party technologies as you can, even if that third-party technology is going to be a core part of what you’re doing because what you’re trying to prove is whether the overall product offering you’ve built is attractive to the customer base and whether customers are willing to pay.
LE: So how do you know? Bonus question, I guess.
Fan: I think the main thing is really being disciplined about the metrics that you’re watching and then having specific scaling metrics in place to be like, “All right, so we achieved x, y, and z, with our MVP, so now we need to spend the time building these specific chunks of a product out because we’ve hit some type of product-market fit here and this feels like this is probably going to stay, versus some other stuff.”
When you’re so early, who knows if any thing’s going to stay? Once you can start seeing the permanent blocks start to form, that’s when you should probably go back in and put reinforcement in there.
You need to, from the start, be very deliberate about how you’re communicating debt and also what is the end of an MVP cycle, right? I think putting those metrics in early and that’s one of the things I got from a lot of the lean UX stuff that’s happening now is putting a lot of this information up and center, in front of everyone, really helps everyone understand where the company is, and, therefore, if you put your scaling metric up on top of, on the board or it’s announced on a regular basis and you kind of talk about how we’re about to hit the capacity of it and when you need to now spend time working on it, no one is shocked about that.
LE: Question 10: So what about the company culture?
Fan: From early on you have to start instilling this concept of failing fast, and I think we try to be very deliberate with our culture and to find ways to essentially scale it. So we have a weekly meeting with the entire company as a way to kind of bring everyone back together and talk about things. We’ve had some conversation with people where we kind of have to say we don’t really know where we’re going or where we need to go with this product or we don’t have that strong of a foothold in this marketplace. To some employees, this shocks them, I think, to an extent, but I think they get used to it.
We also do a quarterly meeting where we bring everyone in, which is also really important because we have remote offices now. That brings them all in and get everyone synced up onto the same page and reinvigorate the company. I think all those activities, although they may just feel like they just create little bonding things, those are the types of things that form culture, and if you do the right activities and you talk about the right things in those meetings and in those instances, that’s how culture is formed and that’s how people start thinking in the way that the founders think.
We’ve done all the paperwork on values, and such, but nothing comes out of it until you actually start essentially living the values and people start learning from what you are doing and I think that’s the biggest thing. You’re struggling to create an environment in which people are not afraid of failing. As leaders, you should probably let them all know how you failed and then how you’re learning from it and that’s a great way to get everyone to then understand, “Oh, it’s okay to fail,” and so kind of talk about things: “Oh I tried this out. It didn’t work,” and to constantly talk about that type of philosophy and thinking, that is what will get everyone in a culture where everyone wants to fail fast.
LE: To wrap up, where are you now as a company?
Fan: So we are about 60 people now. We’ve got three offices. We’ve got a sales office in New York, a sales office in Chicago, we’re headquartered up in San Francisco. We’re at a point now where we’ve got an existing product that we’ve operationalized and that we’re kind of growing and scaling out. At the same time, now, we’re also at a point where we need to be innovating and building new products, whether it’s on top of the existing one or things that are kind of parallel to what our existing product is, and so we’re at that point now where we need to do that if we want to keep on moving and moving up essentially.
Yeah. So we took a seed round from Mike Maples at Floodgate, and then we raised an A round from North Bridge.
LE: Great!
Work to Do
Recall that in Chapter 3 you posited the functionality required to induce customer satisfaction. We hope you have tested whether what you posited bears any semblance to reality.
Notes
1. Whatever you do, do not fall for the “build it and they will come” type of thinking; even the best products need to be marketed and sold. In fact, the best products are often associated with very sophisticated marketing and sales processes.
2. Ries, 45.
3. Mark Leslie and Charles A. Holloway, “The Enterprise Sales Learning Curve: A Framework for Building Startups and Launching New Products.” www.khoslaventures.com/wp-content/uploads/2012/02/Sales_Learning_Cycle.pdf.
4. Blank, 11.
5. Daly and O’Dea, Select Selling.
6. Chris Guillebeau, The Art of Non-Conformity (London: Turnaround, 2011). chrisguillebeau.com.
7. To risk belaboring the point, in some markets, your customers may not be capable of verbalizing or even recognizing the answers to these questions. Ergo, savvy entrepreneurs will need to frame these questions such that the answer reveals itself in customer behavior.
8. SteveBlank.com, http://steveblank.com/2009/04/02/supermac-war-story-5-strategy-versus-relentless-tactical-execution-___-the-potrero-benchmarks.
9. Internet usage by country available here: www.internetworldstats.com/top20.htm.
10. www.fourhourworkweek.com/blog/2012/07/18/ryan-holiday.
Chapter 10
The Final Word
Talk to entrepreneurs tackling a consumer problem and they’ll tell you how much easier lean is in business-to-business. Talk to business-to-business (B2B) and you’ll hear the opposite. Talk to business-to-business-to-consumer (B2B2C) and you witness virtual self-immolation.
Lean startup doesn’t work with consumers, because you can’t believe what people say. Lean startup doesn’t work for businesses, because too many people are involved in the decision-making process.
The most pervasive reasons we hear for not acting as a lean startup are mutually exclusive:
“It’s unproven; show me a lean startup big win.”
“Whatever, there’s nothing new here; entrepreneurs have been doing this for ages.”
There are lots of excuses for not doing lean startup, but the remedy boils down to the same idea: “Launch product based on what’s between our ears.”
The real reason entrepreneurs don’t want to do lean startup is that it’s hard. Don’t talk to customers; it’s hard. Don’t involve customers in design; it’s hard. Don’t analyze data for actionable metrics; I’ll have to hire a business intelligence team. Don’t run experiments; it will take away engineering resources.
The reason the Myth of the Visionary persists is that if we can’t hope to end up as visionaries, we’ll feel lost and clueless about how to build a scalable startup. The real visionaries, however, are not those who predicted the future or foresaw products that plopped from their skulls in fully realized form.
The real visionaries are internally driven to make big change. They are committed to disruption. They have an idea, but it is secondary to change. They make mistakes, are wrong—fail—but relentlessly pursue their ambition. They actually take the vision out of the equation. The vision is added later, after they win. Lean startup is a method for being both disruptive and navigating change.
There is no blueprint for true, black-swan, radical, big disruption. Too many variables are involved. Previous economic, technological, and societal transformations create platform layers like Earth ecosystems that drive new innovation and make possible big wins. In our opinion, the best one can do is position oneself for such an occurrence through unrelenting persistence and nonstop experimentation.
Despite what you might think, a graveyard of equally visionary individuals surrounds the well-known entrepreneurial icons of our day.
The time is ripe. Transformation layers are once again aligning for an increasing number of black-swan events. Despite the cries of a lack of innovation, major industries are being disrupted at an increasing rate. Regardless of whether you are seeking to be ex post facto anointed a visionary, lean startup is a methodology that helps you—as an entrepreneur, intrapreneur, or a linchpin—to not only find a place in this new world, but to thrive. Lean startup is a process for identifying and eliminating business-model bottlenecks.
Like an engineer who must locate and eliminate bugs and other inefficiencies on the path toward delivering a high-performing product, entrepreneurs can view their startup endeavor as a series of bottlenecks inhibiting growth.
The question is, how do you align your organization and establish the culture and processes necessary to actively, relentlessly seek out and eliminate your bottlenecks? The lure of acting for acting’s sake is strong. “Just do it” is a clarion call to be busy. It is where the money is.
Broadly speaking, the major choke points are at the idea stage, releasing the minimum viable product (MVP), finding product-market fit, establishing revenue-positive customer acquisition, and finally making the transition from learning to executing. In other words, after you figure it out, you need a group executing and continuing to learn or you will be left behind.
At the idea stage, through interacting with customers and running experiments, you validate that you have the right customer profiles and understand the problems they face.
At the MVP stage, you iterate on the product, run experiments on functionality, perform usability testing, and try to nail the core value proposition for the market segment. You continue to interact with customers to test that you are building the right product, learning more about their problems and learning how you will market, sell, and deliver your value to them.
Product-market fit is a continuation of experimenting and growing the product to find early mainstream passion and to establish the correct positioning and messaging.
In the customer acquisition stage, you’re validating the conversion funnel, testing acquisition channels, and measuring return to ensure you have a functioning business model.
The final stage to scale is learning how to get out of the way. To scale, organizations must adapt. They must learn how to execute efficiently, while continuously learning and continuously improving.
But, of course, the devil is in the details.
The details are organized by build-measure-learn. Build an experiment, measure the action, analyze the results, and determine learning. Rinse, repeat. Rinse, repeat.
The value-creation economy is the result of technological and cultural transformations. Technology has finally been pushed to the edge for this particular wave. When past waves reached the edge, we saw cars, refrigerators, microwaves, washers and dryers, stereos, phones, and so on, for consumers. Those that won provided exceptional user experience or provided the most value for a low cost.
Now we see all these items computerized—sustaining innovation—and tons of new computerized products that miniature computers enabled. It’s time to end the distinction between software companies and product companies. They are one and the same.
Your ability to know what your customer needs and your relationship with your customer are your competitive advantages. We will see many smaller companies nailing core value proposition for niche markets versus companies producing fewer products that serve many.
Startups spend years iterating on product and market segments trying to find the fit that propels them into product-market fit nirvana—a nirvana that is often short lived. Even after finding product-market fit, you must continue to learn, iterate, and discover new ways to disrupt again.
The new reality considers that to dominate like oligopolies of old, you must continuously improve known processes and continuously learn new ones; continuously reiterate new products or existing product functionality; or discover new market segments where you can provide value.
Much to the consternation of venture capitalists, we’re witnessing the end of the dominance of big-win investing.
Tracing lean startup to its origins, one understands that it emerged from the realization that startups execute before learning. Why do we accept iterative learning processes when running scientific experiments, when conducting research, or even when building complex products, but not when determining whether we’re building the right product, nor when we’re attempting to market and sell the product?
To build a successful business, you must learn several things:
What problem or passion to address.
What solution to provide.
For whom to provide it, segment by segment.
How to market to the segment.
How to sell to the segment.
How to turn a customer into an advocate.
How to scale a segment.
How to innovate again.
The idea is to evolve from lean startup to lean enterprise as you validate the answer to each question. In other words, you move from learning to execution.
The point is to embrace “I don’t know” in your unrelenting pursuit of change. Whether you seek to change your own life, change your community, or change the world; whether you’re seeking to support your family, or 10 employees, or thousands, you have to start small to be big. The lean startup is a language to describe how to create value as quickly as possible, to leverage deep knowledge of your customers, to discover your driving force, and to scale quickly once you’ve figured it out.
Case Study: Drinking Kool-Aid and Eating Dog Food
Marketing is broken. HubSpot was founded in 2006 by Brian Halligan and Dharmesh Shah to fundamentally change—to disrupt—how businesses market to customers. In our world of information overload—data; images; non-stop advertising; high-volume pitches; and the blurring of paid messaging, news and entertainment—we must adapt. The consumer creates new filters and incorporates new requirements, and businesses must somehow rise above the din.
“If you call me on my cell phone and I don’t recognize the number, I don’t answer it,” says Mike Volpe, vice president of marketing at HubSpot. “So if you’re a salesperson trying to get ahold of me and hoping to arm wrestle me into buying your product, it is really difficult today. It doesn’t mean I don’t buy things though. I’m buying all kinds of stuff for my business and for me personally.”
The way that buyers buy things today is not the way people used to buy things. People hate to receive cold calls. They block out advertising. They look to friends on social media for product information. They search, they read blogs. They do a lot more research themselves.
It used to be that companies and their sales representatives could control information. That worked in a pre-Internet environment: before search engines, before social media. You had to talk to salespeople to get information and from the get-go, you were in the sales funnel, you were being sold to. That’s simply how it worked: The sales reps had all the power.
“As marketers,” Volpe explains, “we have not yet fully embraced the shift in power toward the customer. It requires a fundamental change in marketing, a fundamental change in sales.”
This is the problem HubSpot focuses on. While apparent to some, most businesses don’t even recognize the problem, and among those that do, no one knows the solution. It’s a new world. While the phrase “lean startup” wasn’t around yet in 2006, agile development and developing a customer feedback loop were attributes forward-thinking startups embraced.
“We were very much focused on getting product out the door and iterating. Not only iterating on product, but everything, marketing and sales. We were like: Try something, learn from it, iterate, improve it, and keep moving on from there.”
Market segmentation has evolved, too. Traditionally, a B2B company would immediately divide its market by vertical industries, such as law firms, financial services, manufacturing, etc. Marketing, sales, and product development are oriented around these verticals and then further by firmographics, such as number of employees, revenues, and so on.
HubSpot initially took a fairly traditional approach. They looked at the Fortune 1000 market, but felt that was a path with multiple obstacles: long sales cycles, lots of competing technology, difficulty in reaching decision makers, high demands in terms of product functionality, and the likelihood they wouldn’t even recognize they had the problem.
If we were to apply a segment matrix, it might look like this:
Not a good picture! So HubSpot looked at smaller businesses and within that, they thought about verticals, like law firms, car dealerships, doctors’ offices, and accounting firms. What they found, however, was that segmenting based on such verticals didn’t matter. The variables that differentiated market segments turned out to be based on a business’s knowledge of pain and their revenue model.
Organizations that were already doing some amount of marketing, but felt is was ineffective and wanted to leverage the Internet, were good early adopters. Further, businesses that currently had a sales process and needed to generate leads were more favorable than transaction businesses like e-commerce sites or those generating revenue from advertising.
Vertical characteristics did come into play when marketing and sales tactics differed, as they did, for example, for nonprofits.
An updated segment table might look like this:
Being a startup whose products help innovate marketing funnels, HubSpot was forced to eat its own dog food. Build-measure-learn was the basis for learning how to market to their segments.
“It was execute a little bit, learn, execute, learn, execute, learn. It was definitely this type of feedback loop,” Volpe says. They asked for beta sign-ups on their landing page, they started blogging. Then Dharmesh built “Website Grader,” which is a free website evaluator. “We thought, ‘Maybe people will be interested in using this and maybe after they grade their website then they will be more interested in trying to solve their marketing problems that the tool identifies.’ ”
So HubSpot started offering education: webinars, building up the blog, talking about how to improve inbound marketing. The fundamental insight is twofold: First, most organizations (yours, HubSpot’s, HubSpot’s customers) must innovate in areas other than the product. Second, funnel activities should be value-creating, where possible.
HubSpot’s Website Grader (and other free tools) creates value itself, regardless of how it furthers customers’ paths down HubSpot’s sales funnel. The same can be said for HubSpot’s webinars, blogs, and other content-creating activities. E-mail newsletters, for example, that merely sell or point to other resources, that don’t provide value, are unlikely to move the needle of the business.
“It creates value on both sides of the equation, which has really been helpful. When I do a webinar or write a blog post or create an e-book or something that is purely educational, it absolutely is helpful to the other person,” Volpe explains. “But it is also helpful to me, because now I have more people in the world that think about marketing in this new way. Even if they don’t buy, they’re talking to their friends and colleagues about that. They are trying to implement that. Maybe they move to a new company where they have a larger budget and it’s a better fit and they end up purchasing.”
Creating value in this way—throughout the value stream—creates passionate customers. HubSpot obsessively mines its data, segments customers, looks for patterns that enforce the notion of creating passionate, loyal customers who act as evangelists.
Like many forward-thinking organizations, HubSpot tracks its Net Promoter Score, which measures how likely customers are to refer its products to others. But they don’t just track these scores; they double down on them. HubSpot doesn’t just do case studies with them, or write them up for the website; they treat them special. They promote their content, send them swag.
“We gave them VIP tickets to our conference and they got to meet Cindy Lauper who had come to perform at the event.”
In addition to NPS, they track non-product users who continuously interact with HubSpot through downloading content like e-books and attending webinars. They’ve demonstrated loyalty, though their currency is time.
“We put those people in a segment bucket. If they have gone through the download process and have been touched by the sales team more than two separate times—you know what? They love us, they love our content, but for whatever reason they are just not going to purchase, but we want them. We actually communicate with them more. We’ve found that those folks tend to be the ones most likely to share our content.”
HubSpot takes data seriously. They hire quants, short for quantitative analysts, who use sophisticated mathematics and computer algorithms to analyze data. They’re deep into the data looking for interesting patterns they can leverage to accelerate growth. They look at data in terms of:
Pre-sales activity: website interaction data; how people interact with the funnel based on where they came from.
Conversion activity: how the funnel steps differed; closing rates.
Post-sales activity: how different segments use the application, what parts, and how often and to what benefit (e.g., lead generated).
High-value customers: retention rates by segment, size of business, and parts of product used.
The data is used to determine how to prioritize marketing goals and tactics.
“I know that somebody in a five-person company who signs up for a webinar should average a few dollars of monthly revenue versus someone who is at a 100-person company and signed up for a demo, which averages $150/month or something like that. So I can tell one of my marketers: ‘Hey you need to contribute $50,000 of pipeline and you can get there by a billion webinar registrations or you can get there with 1,000 demo requests.’ ”
And how do they reach the quota? Experiments, of course. HubSpot has created a structure around “how to experiment.” Because the product is fairly mature, cross-functional teams do not normally have engineering members but can get them if needed, once they prove viability. The teams typically include marketing, support, sales, and sometimes web developers (as opposed to product developers). They have “experiment meetings” where teams pitch their ideas, get advice, and then report back regularly on progress. Experiments have included new channels, new segments, and lots of split-testing on landing pages, e-mails sales training, and so on.
“One great example is our agency reseller channel, which is now 30 percent of our revenue. That started out as an experiment when Pete Caputo thought it would work. Some of us, in our infinite wisdom, told him he was wasting his time. I came from a company that sold 100 percent through channel and resellers. We were saying, ‘This is crazy, resellers are terrible.’
“Peter just kept doing it and we’re like, ‘Fine, just let us know what happens each month. We think it’s a bad idea but you can do whatever you want.’ Now he has a team of like 30 people and he’s 30 percent of our revenue. He is director of this whole channel.”
Selling into nonprofits started as an experiment. The e-commerce segment that originally didn’t look promising is now getting traction, and that started as an experiment.
“We’re doing one experiment right now where we’re taking a specific type of lead that goes to our mid-size business team and instead giving them to three dedicated sales reps. We are trying to see if we can actually increase the conversion rate of those leads if those reps focus and we give them specific training on how to address them.”
HubSpot is the ultimate lean startup. They focus on data that is relevant to moving the business forward: product satisfaction, passion, and the sales funnel. Their marketing activities not only further the cause of the business but provide value such that customers are more likely to be satisfied and passionate. They run purpose-built experiments to accelerate growth and provide the data to inform and prioritize tactics and product.
“I think a lot of what it really boils down to is in the old days marketing focused on helping your sales team,” Volpe says. “Today what you really want to do is create marketing that helps your potential customers: creating marketing that they love, which then builds that love for your company.”
Work to Do
For all those who want a step-by-step, bullet-proof blueprint plan for success, here it is. Treasure it. Hold it close. This is how to become a Visionary.
Job 1: Is There a Solvable Problem?
Leave the comfort of your home and go find one person who is emotional about the pain or passion you are addressing.
If you are a B2C play, find nine more to complete your LE Team of 10.
If you are a B2B play, find two more to form your LE Advisory Board.
If you are creating a multi-sided marketplace, serve both sides.
Look for patterns in the people you compile.
Job 2: Is the Solution Tenable?
Additionally, qualify your LE Team of 10 or LE Advisory Board.
Find 10 (3) people who are excited about your high-level solution idea.
If necessary, fill out your “team of 10” (Advisory Board) with new blood (starting from the beginning).
What is the pattern?
Job 3: Solution Discussions
Engage your LE Team of 10 or LE Advisory Board during product development.
Are you on the right track?
Is the customer on right platform?
Perform usability testing with competitive products.
Conduct a “high hurdle” experiment.
If responses are lukewarm or uninterested:
Change the solution.
Change the segment (start over).
Job 4: Viability Testing
What is most uncertain about your business model? Run purpose-built tests to resolve uncertainty:
Landing page
Concierge
Wizard of Oz
Prototypes
Wireframes, mockups, similar products
Test apps
If you lose members of the Team of 10 or Advisory Board, refill.
Job 5: Minimum Viable Product
Validate customer will do in product what they’ve said they’d do.
Iterate.
Develop discrete functionality that addresses the pain/passion.
Iterate.
Validate through customer use.
Iterate.
Perform usability testing.
Iterate.
If you lose members of the Team of 10 or Advisory Board, refill.
Job 6: Post-MVP
As you learn, split off execution:
Learn “activated”; build toward “satisfied.”
Learn “satisfied”; build toward “passionate.”
Build toward “whole product.”
Developers should have the guts not to develop.
If Team of 10 or Advisory Board members are not passionate, refill.
What is the pattern?
Turn your Team of 10 (3) into a team of 20 (6).
Learn “passionate”; increase speed of customer acquisition.
Create cross-functional teams charged with achieving specific objectives based on data that moves the needle of the business.
Job 7: Funnel Vision
Use insights from your team of 20 (6) to:
Validate where customer segment “hangs out.”
Validate that you can reach them.
Validate what messaging and positioning resonates.
Validate what makes customer trust you.
Validate what convinces customer to buy.
Re-segment existing customers based on combination of:
pain
origin
value (revenue)
funnel
product usage patterns
Job 8: Minimum Viable Business
Lifetime value > cost of acquisition
Velocity: average revenue per user versus cost of acquisition
Word-of-mouth: viral coefficient
Acquisition channel viability
Discovery of “shadow force”
Job 9: Long-Term Growth
Execution + continuous improvement + continuous learning
Continuous improvement of “shadow force”
Resell, cross-sell, up-sell
New products for existing customer segments
Existing products for new customer segments
Disruption: new products, new customer segments
Acknowledgments
How does one write an acknowledgments section without it sounding like an Academy Awards acceptance speech? One probably can’t. Yet this section is important to us, because without these individuals the book would not have been possible.
Unlike with the Academy Awards, when you might turn the channel once you know who’s won an award, you should read this section. Why? Because they are people whom you should know or want to know. They are people who are doing things, people who are changing the world.
First off, we’d like to thank our editors at Wiley, Laura Walsh and Judy Howarth. One often hears horror stories about editors, and though they’re always thanked in the end, the acknowledgment is often buried. This book is about disruption, and there’s no better case study of an industry being turned on its head than book publishing. Laura gets this. She is forward thinking, open to new ideas, and infinitely patient. Note to Wiley: Promote Laura.
The most common question we get from frustrated intrapreneurs who see their efforts at real innovation inside their large organizations continuously thwarted is “How do we convince senior management to adopt lean startup principles?” We always have one answer: “Buy Eric Ries’s book The Lean Startup. Ries’s book is, hands down, the best way for big business to understand why they need to turn their continuously thwarting organization into a continuous learning one. Thank you, Eric, for leading the change and for supporting our efforts.
Similarly, when we encounter MBA students or professors seeking to actually teach entrepreneurship and not just market the teaching of entrepreneurship, we point them to Steve Blank. It’s truly great that forward-thinking universities are using technology to make their courses available online, but the real disruption to education is coming from the few entrepreneurs who are changing what is being taught and how it’s being taught. Blank’s class at Stanford is the best example of that we’ve seen. Instead of a lab-to-market program that results in a business plan (ugh!), Blank’s course results in real, live, functioning startups with validated business models and paying customers. Thank you, Steve, for leading the change and continuing to support our efforts.
We would like to single out one individual in particular. Hiten Shah embodies today’s value-creation startup culture. He is a lean startup thought leader, kind hearted, magnanimous, and a great friend who has supported our efforts from the moment we first met. Thank you, Hiten.
We are grateful to Fake Grimlock for providing the artwork that makes this book special.
We are fortunate and privileged to be able to travel around the world and speak to entrepreneurs, investors, and other big thinkers. They’ve all influenced the way we view the world, what’s happening globally, and, of course, this book. For taking time out of their busy schedules to speak with us, we would like to thank Paul Kedrosky, Bill Gross, Mike Maples Jr., Alan Cooper, Bill Burnett, Scott Summitt, Nick Pinkston, Patrick O’Neil, Brian Clark, Mike Volpe, Brad Feld, Andy Butler, and David ten Have.
Similarly, thanks to Rob Fan, Bennett Blank, Hugh Molotsi, Marti Frederickson, Mark Frauenfelder, Nate Oostendorp, Tom Fishburne, Alex Douzet, Stephen Devereux, Tim McCoy, Yoav Lurie, Lucas Carlson, Chris Lindland, Nick Fellers, Chirag Patel, Richard Caro, Rob Emrich, Drake Pruitt, Steven Cox, Chris Waldron, Brent Freeman, Jeff Gothelf, Andres Glusman, David T. Lang, Dan Palacios, Danny Kim, Ryan James, Noah Kagan, Jeff Titterton, Patrick Llewellyn, Jason Sew Hoy, Lachlan Donald, Venkat Subramaniam, Bill Scott, Dave McClure, and Paul Singh for sharing their stories.
Special shout-outs to friends Jonas Koffler, Giff Constable, Trevor Owens, Eric Otterson, Eric Galen, Sean Murphy, Sean Ellis, Tristan Kromer, Jeremey Lavoi, Abbey Lavoi, Julian Bergquist, Kate Rutter, Janice Fraser, Jason Fraser, Venkatesh Rao, Al Bsharah, Bryan Hall, Aaron Eden, Parker Thompson, Nik Souris, Ryan Holiday, Michael Ellsberg, Stephen Sammut, Venkat Chandrasekar, Jin Lee, Salim Virani, Dan Martell, Ben Yoskovitz, Alistair Croll, Gary Whitehill, Sisha Ortuzar, Jeffrey Zurofsky, Johnny Chan, Rodney Rumford, Lindsay Dayton LaShell, Abby Fichtner, Alline Oliveria, Cindy Alvarez, Nate Berkopec, Casey Armstrong, Taylor Miles, Shervin and Vafa Talieh, Farsheed Atef, Keyvan Raoufi, Anthony Singhavong, Faiza Tajammul, Avesta and Cameron Rasouli, Joe Zulli, Pete Mauro, Molly Matthieson, Ryan Tanaka, Amir Banifatemi, Andres Buritica, Olin Hyde, Willy Huang, Maggie Finch, Lauren Gard, Tarek Pertew, Maciej Skierowski, Neil Patel, Philip Rosedale, Danny Beckett Jr., John Fries, Josh Payne, Chris Johnson, Alexander Osterwalder, Julien Smith, Steve Cheney, Derek Holt, Scott Case, Peter Hargittay, Debbie Landa, Clare Ryan, Brian Hall, Greg Isenberg, and Stephen Davies for providing some combination of content, review, big thinking, stories, inspiration, support, and friendship.
We would also like to acknowledge others whose thinking and writing are important influences: Seth Godin, Mark Suster, Marc Andresseen, Ben Horowitz, David Cohen, Brad Feld, David Skok, Tony Hsieh, Nassim Nicholas Taleb, Clayton Christensen, and Fred Wilson.
Thanks again to our early adopters who contributed to the book by diving in early, reviewing content, providing feedback, and otherwise supporting us through pre-orders.
Of course, the book is simply not possible without the support and patience of our family and friends.
Brant: I send love and thanks to daughters Riva and Eliza Cooper for being inspirational, smart and not least of which great human beings and excellent writers in their own regard! Thanks also to my parents, Ross and Cynthia, for all their support throughout the twists and turns of life. My brothers Craig and Todd and sister Stephanie, who also contributed to the book, are all big, independent, and inspirational thinkers. I’m not sure at all how my folks pulled that off, but I should probably thank them again for putting up with all that entailed. I’d also like to thank Daniella and Jackie Zucker for help with the family, Eve Zucker, and Karl Malone for their support.
Patrick: First and foremost, I could not have tackled this book without the loving support of my wife, Katalin Vlaskovits and our son, Shane. Kati and Shane truly know the burden of having a husband and a father not always present in the moment as The Lean Entrepreneur (unfairly) occupied my thoughts all too frequently. Thank you both for bearing with me, I love you.
It should go without saying, and perhaps too often does, but my parents Ludmilla and Joseph, my brother Jet and sister Vivienne have always been there for me. Thank you.
I am incredibly lucky to have an amazing extended family. My in-laws are a blessing: Istvan Csucsy, Gergo Csucsy, and of course, the indefatigable Krisztina Albert.
Alan Jones for his saint-like patience, unending generosity, good humor, and firm friendship since high school in Saratoga, thank you buddy.
It’s important to know who the true entrepreneurs are in this world. Let us tell you: They are not the stewards of wealth creation. They are not those who claim that taxes kill entrepreneurship. They are not those whose motivation is purely money. They are not the gamblers posing as innovators, nor the smarmy marketing types trying to trick, guilt, or scare you into buying. They are not the self-promoters, real estate tycoons, the bankers, or the slash-and-burn business vultures.
The true entrepreneurs are those seeking to create value. Whether trying to support themselves or change the world, we thank you for facing down uncertainty, putting yourself out there on the line, risking it all to do what you believe has to be done. Above it all, you are optimistic, passionate doers, and we are fortunate to work for you.
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