Ash Maurya is Best Workbook for Running Lean Startups

Ash Maurya is Best Workbook for Running Lean Startups

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- November 15, 2011

I downloaded the latest version on Ash Maurya ‘s book Running Lean. I read it over 6 months ago but now we are more into the whole lean methodology and I read Eric Ries’ Lean Startup book recently also Ash’s book made more sense.

When reading Nail it then Scale it from Paul Ahlstrom, then Eric Ries Lean Startup I wanted to get working on metrics for Convert Insights. I came up with the following findings (below) only to find out that Ash actually gives a valuable insight on how to measure a idea in the very early stages.

You should get Ash’s book! It will cost you one tweet you will understand that Dave McClure’s metrics, Eric Ries and Paul Ahlstrom are most helpful for the stage where you beyond the very early customer development. Ash’s book is very valuable on the questions that arise after you read Paul’s and Eric’s book.

So thanks Eric Ries, you made me I love lean, now how do I actually implement it? Thank you Ash, for helping me getting lean actually implemented!


Below my thoughts before I read Ash’s book, hope it helps you all that are already in that stage. You might wonder why we run lean? Well we are thinking of some innovative product to place in the market to complement the Convert Insights Conversion Optimization and we would like to make them lean and not our work one year from the basement cycle like last time.

Things we should measure in our Nail It and Scale it Phase after we get finish one-to-one interviews, demo’s and MVP’s

Dave McClure’s AARRR metrics, development cycle, measure feature use in time (so we can kill some), viral coefficient (V-Co), Viral Cycle Time (CT). Customer Life Time Value (LTV), Customer Aquistition Cost (CAC) and Churn (how many people stop playing) and I think we should consider connecting every feature to hard metrics like these to see the impact. We need to go forward some key metrics that show how much we are getting closer to the Nail It moment is important.

Key Metrics

First AARRR. For phase product/market fit the activation and retention are most important. Followed by Revenue to proof viable business in B2B market.

  • Acquisition
    • Visit Site: all visits
    • Does not abandon: 2 views or stay 10 secs or 2 clicks
  • Activation
    • Happy 1st Visit: 5 views or stays 20 secs oe 10 clicks
    • Email us or Whitepaper download (pay per tweet or facebook wallpost http://www.paywithatweet.com/, http://www.estago.com/) or Site-check (pay with tweet or facebook wall-post) both to increave Viral Cycle Time and Viral Coefficient.
    • Sign-up for trial (+3 secs in app)
  • Retention
    • Open weekly email
    • Repeat visitor of app (3+ visits on seperate days in last 30 days)
  • Referral
    • Refer 1+ users who visits site. viral coefficient (V-Co) is connected to this since it shows referrals/active-users. So anything over 1 is good.
    • Refer 1+ users who sign up for trial
  • Revenue
    • User generates minimal revenue
    • Users generates break-even revenue.

More Metrics

  • Customer Acquisition Cost (CAC)
  • Customer Lifetime Value (LTV) where in the beginning we need to figure our life-time.
  • Viral Cycle Time (ct) the shorter the better to gain maximum benefit from groth. Focus is 1-3 days ct. We can shorten this time by Register -> Tell Friends -> Use Product -> Evaluate. We could even experiment with pay for tweet on trial instead of free.
  • Churn: what percentage of clients stop paying
  • Measure every features use, so we can kill features and discover key features.
  • Everything is analysed with Cohort graphs since placing customers and trial users in cohorts gives clear evidence of each metric in time.

What do we do with these metrics?

  1. We measure then in two cohorts (trial and paid users) we try and get start before next development cycle finishes (hopefully 4-5 days).
  2. When each additional experiment leads to less progress we pivot (Eric Ries)
  3. When 40% of clients are very disappointed without your product (Dan Martell)
  4. When do we have product market fit? When 50% of the 30 cold-call clients return our call
  5. LTV should be greater then CAC and preferred 3x CAC to have a sustainable SaaS business
  • 15 Nov, 2011
  • Posted by Dennis van der Heijden
  • 1 Tags
  • 0 Comments

Written by Dennis van der Heijden

Co-founder and CEO of Convert.com passionate in building communities that care. Trying to make that happen inside and outside Convert. I love working with my team to make our A/B testing software better for agencies and e-commerce clients.

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