December 16, 2010 Lean Startup Chicago hosted their latest installment of their excellent speaker series at the Illinois Technology Association.
Bernhard Kappe of Pathfinder Development introduced the session and made some really cool commentary on what companies started as and what they turned into. For instance, the first Enterprise Search company was Google… and they grew to be a bit more than that.
The first online role playing game (MMOG) called Game Neverending eventually turned into flickr!
The point Bernhard made was, Entrepreneurs need to pivot and are often wrong about their mission. (I have to agree….especially on the pivot- here’s my Pivot).
I’ve been to the Lean Startup series of speakers before and saw Mike Evans of GrubHub speak- if you want to come to an event well worth your time focused on the nuts and bolts of building a lean startup, you should be here.
As Todd started talking he got right into the heart of the matter and laid out these three rules:
1. Establish a dashboard
2. Build a funnel
3. Manage retention
The whole talk followed these three point and delved deeper into them. Point #1 revolved around the cost of customer acquisition as well as the cost of customer retention.
#2 spoke to me…build a funnel. In my time as sales I grew tired beyond words of my sales funnel and this was no different- the fact that I found it tedious doesn’t mean it isn’t important. (Even for this site).
The point of the funnel is that you are looking to take visitors to your site and funnel them down through your process and turn them into profit. This applies to every site (including this one) looking to make revenue from advertising as well as anyone trying to sell a product.
“2% is the average conversion rate in the U.S. whether you’re selling elephants or ipods”
-Avinash Kaushik Analytics Evangelist, Google
Todd was an excellent speaker and rove home his points well. For those starting a new venture the talk was peppered with nuggets like, “Companies that focus on customer retention are 50% – 95% more profitable.”
Some of these things may seem obvious to those with more experience , but they also get lost in the day to day of running a business.
Lean Startup regularly has a packed house and tonight was no different- if anyone in Chicago is looking for an event that has business knowledge you can actually use, attending the Lean Startup meetups are well worth your time.