We are in the midst of launching our new Manifast product. In fact we are committing to launching our MVP in November 2011. This has gotten me to thinking about marketing, sales and most importantly our revenue model. Do we have our engine of growth defined?
In “The Lean Startup” Eric Ries talks about three engines of growth for startups:
- The Sticky Engine of Growth (customer retention (churn) is key)
- The Viral Engine of Growth (customer referral rate is key)
- The Paid Engine of Growth (cost of customer acquisition versus customer lifetime value is key)
I agree with Eric, it is best to pick one engine and focus on it as when you are in product launch (startup mode). It is fairly easy to pick one top contender. It is not so easy to not focus on all three at once. But it is necessary.
Working on the Business
Our Manifast product targets helping small businesses balance “working on the business” with “working in the business” in an agile and lean fashion; just in time planning and execution. Coaches and consultants will also be able to offer their services on top of Manifast to streamline the interactions and allow them to focus on value added areas rather than information gathering.
We are planning on offering the tool on monthly subscription basis.
Being realistic, business owners have better things to do than tell their friends to sign up for our product. We hope that they will see value in our product and do so but this is not like Facebook (yet) or similar so we shouldn’t count on that. So Viral is out for now.
The Paid Engine could work if our customer acquisition cost is low and we can keep businesses around for a few months. But our mission is to “Help people achieve their full potential; including living a fulfilling life.” So unless our product succeeds in a very short time frame and then it is no longer required; Paid is out.
What is Left is Sticky (Engine of Growth)
I believe that in order to achieve our mission, we need to either have a long-term relationship with our customers or have lasting impact.
The Manifast product is designed to help new and existing small businesses (under 150 employees) work on their businesses using just in time planning. The only reason a customer should leave us is if they grow too big or they shut down shop to retire (sell).
The subscription model also works best with customers that stick around.
But the biggest reason of all is we want to deliver long-term value for our customers.
We need Sticky in order to fulfill our mission. And it should lead to more success in the other two engines later.
So the Sticky Engine of Growth it is.
Your growth strategy and revenue model tie directly to how you should approach customer service, sales, and marketing. If you would like to discuss this further sign-up for a free marketing assessment and we can get the conversation going.