STARTUP BIG EXPERIMENTS ARE WHAT WILL GET IN CRUCIAL VALIDATED LEARNING.
A Startup should avoid dabbling into countless ideas tending only to improve its product at the margins and concentrate on the big experiments that will get in crucial validated learning. The growth mechanism or model gets it focused on the metrics connected to customer behaviour that matter. It is the startup big experiments that will have in the crucial metrics necessary for identifying the critical customer behaviour and optimising its product or service for the better.
A growth model could see a Startup designing its product to retain customers for the long-term. For such a product to continue getting up steady growth nicely, it has to offer satisfying new capabilities that would string customers along. The startup big experiments are quite useful in this facilitating this process. The product will grow if the rate of new customer acquisition exceeds the rate of customers failing to engage with the product at any given period. The effects of steady growth could be sustained through limited period sales and special offers.
A viral growth model is born when customers take up the major share of marketing and spreading out awareness about the product; the awareness spreads rapidly from person to person. The viral coefficient measures the number of new customers that would be recruited by a customer who engages with the product. A high coefficient indicates that the product will spread very fast. A viral coefficient of 1.0 shows that one in every ten customers will recruit one friend. To sustain growth, the viral coefficient must be greater than 1.0. This means that on average an engaged customer will bring more than one person along.
The paid mechanism of growth goes in for increasing the revenue from each customer and driving down the cost of acquiring a new customer. Cost of advertising is often of consequence here.
Startup big experiments provide it with the relevant metrics that point to crucial customer behaviour and guides it to optimise its product. An optimised product provides more value to customers and helps the startup to sustain its business over the long term.
