Ash Maurya

Ash Maurya

Author of Running Lean and Creator of Lean Canvas

THIS CHAT HAPPENED ON July 01, 2016

Discussion

Ash Maurya
Ash Maurya@ashmaurya · Founder, LEANSTACK
Hi Product Hunt, I'm Ash Maurya. I created the one-page business modeling tool “Lean Canvas” and have also written two books on the topic, Running Lean and my new book Scaling Lean: Mastering the Key Metrics for Startup Growth. Excited to be here, please ask away.
Levi Heiple
Levi Heiple@leviheiple
What tool(s) do you use to create a dashboard for your "customer factory"? The concepts make a lot of sense but the difficulty for me right now is in actually pulling all the needed data together.
Ash Maurya
Ash Maurya@ashmaurya · Founder, LEANSTACK
@leviheiple We use lots of tools for this ranging from Google Analytics to Amplitude for our online products. And even low-tech counting for earlier stage products. The more important thing is to figure out what the 5 AARRR metrics map to in terms of user/customer behaviors and scope your measurement to just those to start.
Emily Hodgins
Emily Hodgins@ems_hodge · Operations @ Product Hunt
Hi Ash thanks for being here today. What's the number one piece of advice you often find yourself giving to new founders?
Ash Maurya
Ash Maurya@ashmaurya · Founder, LEANSTACK
@ems_hodge Love the Problem, Not Your Solution. Starting with a solution is like building a key without knowing what door it will open.
Thomas Stöcklein
Thomas Stöcklein@tomstocklein · FoundersFundersFuture.com
@ashmaurya @ems_hodge 2 quick follow-up questions: 1) Are there specific problems out there that you think more founders should tackle? 2) Are there too many entrepreneurs trying to build the same solutions?
Ash Maurya
Ash Maurya@ashmaurya · Founder, LEANSTACK
@tomstocklein @ems_hodge 1) I think every segment has problems worth solving. But what you consider "worth solving" is determined by your personal why and ambition. 2) Yes, I believe there's a lot of the bandwagon effect going on where startups copy whatever is trendy versus digging into root causes -- what Peter Thiel describes as "secrets" in his book. Uncovering those is where long lasting value is created.
Stas Pavlov
Stas Pavlov@stas_pavlov · http://bewater.ninja/
What do you think is the optimal composition in terms of skill and personality for a founding/ startup team in order to succeed?
Ash Maurya
Ash Maurya@ashmaurya · Founder, LEANSTACK
@stas_pavlov I generally look for competencies in design, development (build), and marketing. These can be spread across one or more people. Beyond this, - a willingness to search vs execute ideas. - the ability to hold conflicting ideas in their head at the same time - drive to challenge their own assumptions Strong opinions, held weakly.
Stas Pavlov
Stas Pavlov@stas_pavlov · http://bewater.ninja/
@ashmaurya Thanks a lot Ash.
Shian Han
Shian Han@shianhan
Any tips on how to incorporate customer lifetime value into a cash flow spreadsheet projecting 2-3 years? Also shouldn't we also be concerned about "user lifetime value"?
Ash Maurya
Ash Maurya@ashmaurya · Founder, LEANSTACK
@shianhan In a direct business model, where your users become your customers, the two are the same. In multi-sided models (like Facebook), you need to estimate your user lifetime value in terms of the monetizable value they create (like data/attention) that you turn into customer lifetime value (revenue). In both cases, you want to build a user/customer behavior model bottoms up i.e. figure out your input pricing, usage, and retention assumptions for your value proposition. Then ballpark your business model. To ballpark a business model 2-3 years out, 1. Start with your minimum success criteria (typically revenue based) 2. Convert that into a customer throughput rate by using your input pricing and life time assumptions. 3. Test whether this model even works on paper. If not, refine your input assumptions. Then get outside the building and start validating the input assumptions immediately -- from small scale to progressively larger scale.
Thomas Stöcklein
Thomas Stöcklein@tomstocklein · FoundersFundersFuture.com
1. What's something you believe (regarding business or life) that most people would disagree with? 2. On the other hand, what are some popular beliefs or practices that you disagree with?
Ash Maurya
Ash Maurya@ashmaurya · Founder, LEANSTACK
@tomstocklein 1. A lot of what I have learned over the years sounds like common sense in retrospect but for some reason is rare in practice. One in particular is that stifles the search of good ideas is the "curse of specialization" -- where we limit what ideas we act on based on who is giving them. Good ideas can come from anywhere. 2. I generally strive to live by this quote: Whenever you find yourself on the side of the majority, it is time to pause and reflect. - Mark Twain
Thomas Stöcklein
Thomas Stöcklein@tomstocklein · FoundersFundersFuture.com
@ashmaurya Love that answer!
Robert Warren
Robert Warren@robert_warren1
@ashmaurya @tomstocklein Ash your first response is best represented by another quote - "There's nothing more uncommon than common sense." Frank Lloyd Wright
Thomas Stöcklein
Thomas Stöcklein@tomstocklein · FoundersFundersFuture.com
How are you getting around Austin now that Uber and Lyft are gone?
Ash Maurya
Ash Maurya@ashmaurya · Founder, LEANSTACK
@tomstocklein Rather painfully. Austin is still largely a car and bike culture which I rely on for most daily use. I have a home office so don't have to go too far. I miss Uber the most when I have to get to and from the airport which is once a month.
Niv Dror
Niv Dror@nivo0o0 · VC at Shrug Capital
Hey Ash, thanks for joining us! When looking at metrics, what time frame would you suggest making decisions based on? For example, if you'r trying to grow X metric 10% every week, and one week is up, then the next week is flat, does that indicate change what you're doing, or maybe take action when looking at 4 weeks of up/down/flat?
Ash Maurya
Ash Maurya@ashmaurya · Founder, LEANSTACK
@nivo0o0 This is largely dependent on the stage and type of product. I generally default to weekly metrics unless user behavior is more appropriate for a monthly batch. I also try to build in systems that lend themselves to predictable metrics. In other words flat growth is still better than no growth.
Stefan Kooistra
Stefan Kooistra@sakooistra
Hi Ash! Thanks for doing this. If someone is starting with a very small team and needs a jack of all trades designer and jack of all trades developer, what advice would you give on finding those unicorns?
Ash Maurya
Ash Maurya@ashmaurya · Founder, LEANSTACK
@sakooistra I generally look for passion for the customer problem in my all my founding teams and early hires. In my current business, because my audience/customers are entrepreneurs so are my designers, developers, and marketers. I found all these people by sharing my work in places where they first consumed them, then decided to join me on my journey.
Emily Hodgins
Emily Hodgins@ems_hodge · Operations @ Product Hunt
What's the number 1 metric new founders should be focusing on for success?
Ash Maurya
Ash Maurya@ashmaurya · Founder, LEANSTACK
@ems_hodge Understanding the key traction metric in their business. TRACTION: Rate at which their business model captures monetizable value from its users. Note: Monetizable value is NOT the same as revenue but a leading indicator that turns to revenue.
Nikhil Saraf
Nikhil Saraf@nikhilsaraf · Entrepreneur
Hi @ashmaurya, I'm building a P2P social app that depends on network effects to grow, but is useful independently too. Usability studies and focus groups show that the basic product is good. I'm currently focusing on making my app available on as many platforms and countries as possible, and then focusing on building different user acquisition methods into the app (SMS, Facebook, Twitter, BranchMetrics, Apptentive for app ratings) to allow the app to become viral. Any advice on this approach?
Ash Maurya
Ash Maurya@ashmaurya · Founder, LEANSTACK
@nikhilsaraf If possible, narrow down on where you can get the most engagement first versus spreading yourself too thin. Think Facebook on 1, then 3, then 10 college campuses versus on all of them from day 1. Constraints are gifts and I find key to prioritizing the right actions at the right time.
Nikhil Saraf
Nikhil Saraf@nikhilsaraf · Entrepreneur
Very insightful. Thanks for the reply, @ashmaurya !
Thomas Stöcklein
Thomas Stöcklein@tomstocklein · FoundersFundersFuture.com
If you had to pick 3 pre-revenue startups to invest in, which companies would you choose and why?
Ash Maurya
Ash Maurya@ashmaurya · Founder, LEANSTACK
@tomstocklein I'm still developing an investing thesis and not actively investing. But I'd generally look for the characteristics I outlined above on team makeup and attitude towards big problems versus solutions.
Thomas Stöcklein
Thomas Stöcklein@tomstocklein · FoundersFundersFuture.com
@ashmaurya Follow-up question: Are there currently any VC funds out there whose investment thesis you admire? Maybe Founders Fund, since you mentioned Peter Thiel's awesome book "Zero to One"?
Thomas Stöcklein
Thomas Stöcklein@tomstocklein · FoundersFundersFuture.com
What are your favorite tools, tactics and strategies for measuring and adjusting a) product/market fit b) pricing for a product/service?
Ash Maurya
Ash Maurya@ashmaurya · Founder, LEANSTACK
@tomstocklein a) Lean Canvas + Traction Model + Customer Factory blueprint These are models that help to describe the business and where you currently stand. b) Starting price is best determined by studying and anchoring against your customer's existing alternatives. The best way to test this is in a f2f conversation. Beyond that, price optimization is more science. A/B tests and lots more conversations is what we rely on.
VirtualMob
VirtualMob@virtualmobuk
How do you determine at what stage the startup is at - Product Market fit or Scale (when you have few hundred paid customers)?
Ash Maurya
Ash Maurya@ashmaurya · Founder, LEANSTACK
@virtualmobuk I would start by building a traction model which is something I cover in great detail in the Scaling Lean book. You have to model what early scale looks like based on customer behavior. You can then scale it down to Product/Market fit and Problem/Solution fit using a 10X rule that I've found to be quite universal. Then plot your current customer production rate against the traction model to locate where you are. A key point to make the a few hundred paid customers is NOT a rate. You need to translate this to the rate at which you are creating new customers per week or per month first.
Sanjay Jadhav
Sanjay Jadhav@sanj_jadhav · Founder - AR & VR, Product Strategy, CTO
@ashmaurya thanks Ash, so we use the success criteria to get the customer throughout and work it backwards based on 10x. Cheers
Ash Maurya
Ash Maurya@ashmaurya · Founder, LEANSTACK
@sanj_jadhav that's right.
Robert Warren
Robert Warren@robert_warren1
How much time would you recommend a startup spend seeking out non-dilutive government financing?
Ash Maurya
Ash Maurya@ashmaurya · Founder, LEANSTACK
@robert_warren1 I am a bootstrapper at heart and will often push teams to search for evidence of customer traction before *any* kind of funding. Traction has a funny way of accelerating resource acquisition. Every case is slightly different, but I have found 4-12 weeks (8 week average) to be the sweet spot for getting an idea to Problem/Solution Fit.
Robert Warren
Robert Warren@robert_warren1
@ashmaurya Thanks for the answer. I completely agree but have noticed a trend where founders want to get the money before proving traction.
Jacqueline von Tesmar
Jacqueline von Tesmar@jacqvon · Community at Product Hunt ⚡️
What industries would you place your bets on in the next 10-20 years?
Ash Maurya
Ash Maurya@ashmaurya · Founder, LEANSTACK
@jacqvon I am not a futurist. I think there are tons of problems/jobs in the present that represent tremendous opportunity. You just have to pick any customer segment and dig in.
Jacqueline von Tesmar
Jacqueline von Tesmar@jacqvon · Community at Product Hunt ⚡️
What are the first tabs you open on your computer/phone every morning?
Ash Maurya
Ash Maurya@ashmaurya · Founder, LEANSTACK
@jacqvon I reserve my mornings for maker activities like writing. So the very first thing I open is my favorite writer tool: IA Writer. Once that is done, email/social media is next.
VirtualMob
VirtualMob@virtualmobuk
What tools can you suggest to use for implementing Pirate metrics (after we have mapped out our AARRR) for setting up micro funnel?
Ash Maurya
Ash Maurya@ashmaurya · Founder, LEANSTACK
@virtualmobuk Again if you are in software/online space, there are lots of options there. Our preference is to log a whole bunch of events (we use keen.io for this) and then visualize the data ourselves.
janfsauer
janfsauer@janfsauer · Sr. Global Director, SAP
Thx a lot for doing this. What is in you r opinion true customer validation...as we know interviews are not always useful in. Turning into money?
Ash Maurya
Ash Maurya@ashmaurya · Founder, LEANSTACK
@janfsauer The key is measuring what customers did in the past or do in the present versus what they say they'll do in the future. Measure actions not words. Revenue is first form of validation but there are several reasonable proxies in lieu of revenue if that is still further away.
Satyaveer Paul
Satyaveer Paul@satyaveer_paul · CEO at Woobly
Hi Ash, as Lean Canvas is for Business Plan, What do we do for Business Model Forecast??? The Investors in India want Revenue but we want Happy Customer because Create Capture & Deliver Value we are burning money how to Sustain to develop a Sustainable Business Model. Though we started monetizing on day 1.
Ash Maurya
Ash Maurya@ashmaurya · Founder, LEANSTACK
@satyaveer_paul Yes -- the Lean Canvas is NOT enough. In my new book, I introduce additional models for the business model forecast that extend the Lean Canvas and help to tell a more complete entrepreneur to stakeholder story.