Lars Lofgren – Unlocking the 4 Gateways of Growth – MicroConf Europe 2014

The MicroConf Europe 2014 Hub Page has notes on all the talks and additional information.

Website: LarsLofgren.com
Twitter: @larslofgren
Slides: here

• When picking metrics, always ask:
  • What is biggest constraint right now?
  • Which metric help me measure, if I am making progress?
• Main metric: Get someone to pay AND/OR use your product regularly
• Bad metrics for this gateway:
  • Asking people if they will pay
  • AdWords clicks
  • Beta or waiting list signups
  • Traffic

Gateway #2: Is your product good enough?

• main metric: Ask 500 users the Product/Market Fit Question
  • “How would you feel when you could no longer use [PRODUCT] ?”
  • At least 40% of users should say “Very disappointed”
• P/M Fit Question isn’t perfect, verify with a retention metric

Gateway #3: Can you grow?

• Pick just one channel
• Work on it for 3 months. Assume it will work & get ressources needed to execute
• main metrics:
  • main business metric
    • SaaS: Monthly Recurring Revenue
    • Ecommerce: Monthly Revenue
    • Consumer Tech: Monthly Active Users
  • acquisition funnel (e.g. visitors, signups, used product, converted to paid)

Gateway #4: Do you have a stable model?

• main metric: Depending on business model
• SaaS:
  • LTV >= 3x CAC
  • Recover acquisition cost within 12 months
  • Get monthly churn below 2%
• Consumer Tech:
  • Virality > 1
  • Usage 3 out of 7 days
  • 30% of users active day after signup
  • Organic growth of 100s signups/day
  • Clear path to 100,000+ users
• Find someone in your industry that knows the key benchmarks
• Start with constraints, hack together what you need to measure them

Big Win Hunting

• Get qualitative insights for hypothesis
  • Use words that your leads/customers use when talking about the problem
• Launch, do it LIVE
• Use the eyeball test

Finding Ideas to Test

• Whenever you’re not sure what to test, get qualitative data
• Your customers want to help you, go talk to 20 of them
• How to structure your interviews:
  • Brief overview of who they are
  • Deep dive into their problems
  • Present solution for feedback
  • Tell them that this is NOT a sales call
• Start running surveys:
  • Expect 10% response rate
  • Only ask questions that you need
  • Don’t exceed 10 questions
  • Start with open response
  • Categorize responses to see trends
• Use Qualaroo surveys to target steps in funnel (“What is preventing you from wanting to start a free trial?”)
• Pull user activity logs on two groups
• Find 20 of each:
  • Ideal customers
  • Customers that started but left
  • How are these two groups different?
• Start doing usability testing – e.g. through Amazon Mechanical Turk
  • great for general UX
  • no good for market-specific insights

-Christoph