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Stephen Yang

Product Manager at Skillshare

35

4

New York Entrepreneurs Group

*Last Updated: Sunday November 11, 2012 at 2:30pm ET

This is a group project. I'll be representing my group, New York Entrepreneurs, as the group lead. All work see here is the work of the following group members:

1. What surveys should Firestarter run to their early users? What questions should they be asking in this survey?

  • How disappointed would you be if you couldn't use Firestarter anymore?
  • For the power users, what were the motivating factors for making such a high donation?
  • Why are you using Firestarter as opposed to our competitors?
  • How likely are you to recommend Firestarter to a friend?
  • How likely are you to make another investment on Firestarter?
  • What are your expectations for when you are going to get your return on investment?
  • What do they dislike about the product?
  • Why did they sign up?
  • What else do you use to accomplish that?
  • What could make the experience better?

2. What are the metrics they should track to determine if they have product/market fit? What are the vanity metrics they should avoid?

  • Growth of the amount of investments made on Firestarter
  • Growth of the number of investments made on Firestarter
  • Market metric: the amount of capital that's being invested in startups for the past 10-20 years
  • Market metric: how many startups are being funded each year and if there's a surplus in capital or demand for investment
  • Avoid: pageviews, signups, and # startups on Firestarter

3. How will Firestarter know when they’ve hit Product-Market fit? What should Firestarter do next within the next month to get there?

  • Retention: # of repeat investments and the ceiling amount of investments per user per time period
  • Knowing how to scale up the business in a sustainable fashion

4. (Optional) Is the market big enough? If so, how can Firestarter be differentiated in the marketplace?

  • How long is the return on investment?
  • # startups that can get funded on a yearly basis?
  • Firestrater can be differentiated in the market by leveraging trust in the service, communication & transparency in the startups' performance, and success stories & financial validation for why you should use Firestarter.
  • From our initial analysis, we concluded that the startup market is too small to warrant expected growth to be venture-backed. So, we decided that Firestarter should start with the startup market to refine their product and UVP and grow by scaling into different investment verticals, such as real estate, student loans, or renewable energy sources.

5. Notes from discussions

Since the Firestarter founders were in the trough of sorrow, we thought that their main and only focus is to hit product/market fit. This means iterating very fast with their product as well as conducting in-depth customer development. Because of this, we assumed that no time or resources would be spent on acquisition or marketing.

A main question we came up with for customer segmentation was the breakdown of the 771 who actually did invest in projects. The average investment is $475, but our hunch given the law of averages (the 90-9-1 principle http://en.wikipedia.org/wiki/1%25_rule_(Internet_culture)) was that a small subset of the active users invested a much higher amount. So, the other "9%" had a lower average investment of say somewhere around $250.

We thought that an important question to figure out, however, was what specifically motivated those 1% and the 9% of active users to invest that high of an amount of money and doubling down to make that experience even better. Another thing that came from it was the frequency of repeat investments. Is this just a one time investment that users would make? Or, is there an opportunity for a bunch of repeat investments, much like how people back multiple projects on Kickstarter.

Regarding market size, which I think is the most the single most important question to ask ourselves, we wanted to do more research into the amount of capital that gets invested into startups year-over-year for the past 10-20 years. This should give a good indication of the ceiling for how much investment can be invested from the JOBS act.

Our solution to this was expanding into other investment verticals, such as real estate, student loans, or renewable energy sources.

Project cover photo attributed to Renée Amanda Dunn.

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