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Pivotal Failure - Lessons Learned from Lean Startup Machine DC
This document summarizes the lessons learned from a case study of a startup business. The business aimed to recommend third-party software solutions to small businesses but found through customer feedback that this model was not sustainable. The document notes that creating a recurring revenue stream requires a high volume of customers, but acquiring that many customers would not be cost effective. It concludes that the startup's initial assumptions were flawed and that it will need to pivot its business model based on the lessons learned through applying the lean startup process.
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Pivotal Failure - Lessons Learned from Lean Startup Machine DC
- 1. Pivotal Failure A case study by Arrgyle We focused on small businesses and recommending third-party software solutions to help them solve un-met business problems. Based on customer and mentor feedback, we have learned that this business is not sustainable in its current form.
- 2. Validated Learning 1. Businessesadmit there are problems within their business they are not aware of. 2. They believe technology could potentially help them realize and solve these problems. 3. They value money over time. 4. They say they would sign up for a free or cheap service based only on web content if it was relevant to solving a business problem.
- 3. It’s a NumbersGame Creating a recurring revenue stream is difficult because it requires volume and demand. In order to gross $250,000 in a year, assuming a 2% conversion rate, we would need to put our product in front of over 450,000 small business owners. The expense of this exposure is not cost effective.
- 4. Summary Through the leanprocess, we have determined which of our assumptions are accurate and which are inaccurate. Because of this we have learned that our model is flawed and will require us to pivot. If it weren’t for the Lean Startup Machine, this might have been a very expensive error. We wish we had started with this idea on Friday so we could have pivoted during the event. Thank you LSM for all your help!