Lean Startup: Insider's Story

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There is a new approach to growing startups popularized by Eric Ries: "Lean Startup". Basic idea is that each startup should be as flexible as possible, should create rapid prototypes and test market assumptions using these prototypes. Flexibility is key to success (or at least to find out that your idea is not that good :-).

Bayram and Oleg will explain how this approach is being used in Empatika and will present a real story about Squeek app they developed and marketed.

Key topics covered:
1. Lean Startup - a new approach to growing startups
2. Flexibility is key to success
3. Pivots: don't afraid to fail
4. Key performance indicators (KPI) for an IT startup
6. Lessons Learned and action items.

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Lean Startup: Insider's Story

  1. 1. Lean Start-up Insider’s Story http://squeek.ru
  2. 2. Bayram Annakov Oleg Parinov crazy CEO JDI Project Manager
  3. 3. WTF is start-up? WTF is lean?
  4. 4. WTF = wikipedia to foolsLean Startup is a concept coined (and trademarked) by Eric Ries. Ries writes that lean startups are born out of the following three trends: 1. use of free and open source software, 2. application of agile software development methods, and 3. ferocious customer-centric rapid iteration, as exemplified by the Customer Development process[1].Lean Startup initially advocates the creation of rapid prototypes designed to test market assumptions, and uses customer feedback to evolve them much faster than via more traditional softwareengineering practices, such as the Waterfall model. It is not uncommon to see Lean Startups release new code to production multiple times a day[2], often using a practice known as ContinuousDeployment[3].According to the New York Times, "The term lean start-up was coined by Mr. Ries, 31, an engineer, entrepreneur and blogger. His inspiration, he says, was the lean manufacturing process, fine-tuned in Japanese factories decades ago and focused on eliminating any work or investment that doesnʼt produce value for customers." [4]Lean Startup is sometimes described as Lean Thinking applied to the entrepreneurial process[5]. A central tenet of Lean Thinking is to reduce waste. Lean Startup processes reduce waste byincreasing the frequency of contact with real customers, therefore testing and avoiding incorrect market assumptions as early as possible[6]. This approach attempts to improve on historicalentrepreneurial tactics by reducing the work required to assess assumptions about the market, and to decrease the time it takes a business to find market traction. This is referred to as MinimumViable Product.In The Entrepreneurs Guide to Customer Development, Brant Cooper and Patrick Vlaskovits add a fourth element, and that is the use of powerful, low-cost and easy-to-use analytics. While somecharacteristics of lean startups have been practiced for years, the confluence of these trends is a recent phenomenon and offers the potential for unprecedented "speed of iteration" or "number oflearning cycles per dollar" as business hones in on product-market fit[7].[edit]
  5. 5. Our story
  6. 6. Nov2010 Mobile Ad
  7. 7. Mobile AdDeveloper Advertiser Advertising Network
  8. 8. Prototype Feb2011
  9. 9. Two-sided market more...Developer Advertiser more...
  10. 10. Others
  11. 11. Insight #1 Focus
  12. 12. Focus on developersMar2011 We need a success story
  13. 13. Change of plans!
  14. 14. Change of plans! - security systems
  15. 15. Change of plans! - security systems - online project management
  16. 16. Change of plans! - security systems - online project management - first personal computers
  17. 17. Change of plans! - security systems - online project management - first personal computers - collection of links to research papers
  18. 18. Change of plans! - security systems - online project management - first personal computers - collection of links to research papers - online game
  19. 19. Change of plans! - security systems - online project management - first personal computers - collection of links to research papers - online game - printer drivers
  20. 20. SqueekApr2011 Get in touch with people nearby
  21. 21. •Group messaging•Location-based•Simple!•and no ads...
  22. 22. Insight #2 Understand your market
  23. 23. First user testingApr2011 Be closer to user
  24. 24. First user testingApr2011 Be closer to a user
  25. 25. What is happening? How many people? What are they doing?May What is the cost of ad2011 campaigns?
  26. 26. Key PerformanceIndicators (KPI)
  27. 27. Customers (users) funnel iPhone users Visited the site Downloaded the app Opened the app Wrote the first message Visited more than once
  28. 28. Customers acquisition iPhone users Visited the site Downloaded the app Opened the app Wrote the first message Visited more than once
  29. 29. Retention iPhone users Visited the site Downloaded the app Opened the appWrote the first message Visited more than once
  30. 30. next steps in counting• lifetime value of a customer (LTC)• crash rate• revenue/acquisition cost
  31. 31. Insight #3 Count everything and double-checkThere is no product feature without counting
  32. 32. «Zero problem» People need people to talk toMay2011
  33. 33. TacticsFeel free not to choose Push notifications Invite
  34. 34. Insight #4:Strategy thinking
  35. 35. Why realtime?June2011
  36. 36. Action items
  37. 37. Flexibility Market Changes Fails
  38. 38. Tools for flexibility• Mock-ups and prototypes• A/B testing• Business models
  39. 39. Mock-ups• Mock Flow• Simple Diagrams• Post-its
  40. 40. A/B testingHard to decide? Test both!
  41. 41. A/B for e-mail
  42. 42. Business model
  43. 43. Lean Start-up idea prototype test
  44. 44. idea • brainstorm • self-usage • ask!
  45. 45. prototype • developing new product • adding new feature • can we test our idea without implementing?
  46. 46. test• give it to the market• take data how the customers use the feature (what indicators?)• decide the necessity of the feature
  47. 47. example: share button Idea: let the users share the room to their friends Prototype: share button to facebook or vkontakte wall, to twitter or via email Test: nobody uses the button
  48. 48. example: topics Idea: people need topics for discussion Prototype: creating rooms the number of for different topicsmessages per day Test: how many people discussed topics Decision: let’s create topics
  49. 49. Next step for topics• How we can test without implementing and waiting?• We have got Squeek - a dolphin bot• Let the bot give the topic (or ask about it)• How can we evaluate the result?
  50. 50. Summary• Be flexible• Test your ideas on the market• Analyze the data• and...
  51. 51. and...love your product!
  52. 52. thankshttp://squeek.ru

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