Lean Startup: Stage 3 – Searching for Channel/Product Fit (Optimizing the Funnel)Estimated Reading Time: just 3 min

Lean Start-up Framework is based on a lifecycle every successful new company/product goes through.

The third stage is called Searching for Channel/Product Fit (aka Optimizing the Funnel).

The focus is on customer acquisition and growth.

The basis for doing this is the Product/Market Fit that is when the company

  • Found a market where it can operate with a product/service that can satisfy a target
  • Learned how to sell the product/service is ready to go hunting for a mass market

This is the field of Growth Hacking (GH).

GH consists of a fast-paced process made of tests conducted on marketing and product channels to find the best way to:

  • Scale a business
  • Reach the Viral Loop

A Viral Loop is the result of positive customer experience while interacting with a company’s Value Proposition. More precisely if a customer is happy with a product or service, he/she might be so excited that he/she wants to share with others his/her experience as well as news and info about the company’s products or services.

A Viral Loop creates quick and cost-effective Brand Recognition.

Growth Hacking is based on mapping each phase of the company’s relationships with the customers through the A.A.A.R.R.R. Funnel also known as Pirate Funnel.

The funnel consists of 6 phases, each one managed through a metric that is called The Only Metric That Matters:

  • Awareness managed with the Number of Impressions
  • Acquisition managed with Lead Generation metrics (i.e. the Number of Unique Visitors)
  • Activation managed with the Conversion Rate (i.e. first listening to a song on Spotify)
  • Retention managed with the Retention Rate
  • Revenue managed with Net Income
  • Referral managed with Net Promoter Score (NPS)

Once the Funnel is mapped, it is time to activate the Bullseye Framework as well known as the Growth Hacking Cycle.

The Bullseye Framework is an approach based on improving one metric of the funnel at a time to maximize the available budget and it is based on:

  1. Brainstorming (to generate ideas based on 20 possible Traction Channels)
  2. Prioritizing (using Impact-Confidence-Ease methodology)
  3. Testing best ideas
  4. Implementing the 3-5 ideas with best ROIs
  5. Analyzing the implemented ideas
  6. Systemizing the idea with the best ROI

The Output of this stage is called Channel/Product Fit.

The Channel/Product Fit is a stage where the company has a comprehensive knowledge of:

  • its Funnel
  • the ROI of each Channel

The company is now ready to maximize the revenues out of the funnel while keeping on

  • Optimizing it with A/B Testing
  • Activating more Growth Hacking Cycles to generate new ideas

Growth Hacking

And finally, here is your BLACK BELT!!!

As Master Miyagi used to say, “Lesson not just karate only. Lesson for whole life. Whole life have a balance. Everything be better.”

So let Lean Startup improve your business and the way you make innovation.

Before you go, though. There is still something you can learn.

Are you interested in more Growth Hacking? Then follow the White Rabbit through this link!

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Nicola Zaffonato Administrator

Business Strategy | Product Marketing | Executive Master eCommerce Management | Business Innovation Master | MSc

I am driven by my personal growth and of people/contexts that surround me.

I followed a professional path in Valentino Fashion Group and Luxottica during which, thanks to the ability to understand different businesses and interests, I was able to succeed in Operations, Merchandising and Retail.

These organizations have exploited my ability to mediate and translate needs/constraints into practice, assigning me to Project Management roles.

Luxottica relied on my ability to analyze, to anticipate things and to imagine/implement solutions by appointing me in Supply Chain Management department and assigning me to the Product Management of IoT solutions for Anti-counterfeiting and Retail digitalization.

During this professional path, I also developed my leadership by managing teams to build Processes, Organizations, Systems and Governance Tools.

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