Lean Startup - by Hristo Neychev (bring your ideas to life faster, smarter, and cheaper)

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Lean Startup ideas, trends, and best practices through the lens of my experience in four industries, three startups, and two continents. …

Lean Startup ideas, trends, and best practices through the lens of my experience in four industries, three startups, and two continents.

Lean Startup methodologies are applicable to both small and large organisation focused on creating new products and services under conditions of extreme uncertainty.

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  • 1. LEAN STARTUP HristoNeychev HristoNeychev @HristoNeychev
  • 2. I’M HRISTO NEYCHEV I bring new ideas to life INTERESTS cloud, mobile, web EXPERIENCE 13 years, 4 industries, 3 startups
  • 3. neychev dance studio
  • 4. what is the most resilient parasite? bacteria? virus?
  • 5. IDEA
  • 6. GROWS LIKE A VIRUS 1+1 = 1+1 1+1 = 2+2
  • 7. “…and even the smallest seed of an idea can grow. It can grow to define or destroy you!”
  • 10. BRIGHT IDEA Time Resources Funding People Etc… SUCCESSFUL BUSINESS
  • 11. SUCCESSFUL BUSINESS Time Resources Funding People Etc… BRIGHT IDEA
  • 13. THE LEAN STARTUP by Eric Ries LEAN MANUFACTURING (JIT) Just In time Delivery JAPAN Manufacturing Industry
  • 14. Lean startup methodologies apply to any individual, team, or company looking to introduce new products or services into the market.
  • 15. LEAN slender agile quick fast rapid swift nimble…
  • 16. STARTUP “A human institution designed to create a new product or service under conditions of extreme uncertainty” Eric Ries
  • 17. CREATE
  • 19. „If you don’t know what you are doing… …better do it fast“
  • 20. Put a process/methodology around it. VALIDATED LEARNING!
  • 21. Get ready to FAIL!
  • 22. You rarely hit the bull's-eye, but this never stopped you from playing!
  • 24. US HQ 50+ Manufacturing Labs 500+ Sales Reps 30,000+ 1.9 years repurchase cycle Eye Care Professionals (ECPs) 150,000,000+ People wearing eyeglasses
  • 25. EYE EXAM
  • 28. THE IDEA Tablet device will educate patients while they are waiting
  • 29. • Educate patients • Help make the right decision • Improve eye-care • Better eye health • Increase market share • Improve capture rate • Increase revenue per customer
  • 30. Can this be done? …why and how? ?
  • 31. WHY AND HOW • Tablet or TV? Why? • Education or advertising? Or both? How? • Before or after the eye exam? Why? • Self-service or someone will help? Who? Why? • Should we sell it or give it away? Why? How?
  • 32. Business Model Canvas I prefer the LEAN CANVAS
  • 33. Problem (1) Solution (4) Unique Value Proposition (3) Unfair Advantage (5) Customer Segment (2) Can’t be easily copied or bought Top 3 features Top 3 problems Key Metrics (8) Key activities you measure Single, clear, compelling message that states why you are different and worth buying Channels (9) Path to customers Cost Structure (7) Revenue (6) Customer Acquisition Costs Distributing Costs Hosting People, etc. Revenue Model Lifetime Value Revenue Gross Margin Target customers
  • 34. Problem (1) Solution (4) Unique Value Proposition (3) Unfair Advantage (5) Customer Segment (2) Tablet + videos Customers are unaware of the key benefits of premium lenses Opticians do a poor job explaining them Key Metrics (8) Learn all you need to know about your eyes and the lenses you need. Make the right choice. Take care of your eyes’ health. Capture rate Revenue per customer Share of ECP sales We sell the most premium lenses on the market Channels (9) Eyeglass wearers Path to customers Cost Structure (7) Revenue (6) Tablets, videos, software, distribution Increased purchases in ECP channel
  • 35. TOOLS TO HELP YOU • Research • Surveys • Interviews – ask for commitment • Focus groups • Test market • [Genchi Genbutsu] – “go and see for yourself” • EXPERIMENT
  • 36. COMMITMENTS TIME – meetings, trials, etc. REPUTATION – intro, testimonial, CASH case study, etc.
  • 37. "go and see for yourself" 現地現物 [Genchi Genbutsu] “the real place” “the crime scene” 現場 [Gemba] A key principle of the Toyota Production System
  • 38. “Design an EXPERIMENT that attempts to answer the question!” Eric Ries Create series of FAST and CHEAP micro-experiments that lead you to VALIDATED LEARING!
  • 39. VALIDATED LEARNING The unit of progress for Lean Startups
  • 42. THE TRADITIONAL APPROACH 1. Slow 2. Expensive 3. Gives you ONLY ONE attempt to succeed/fail (in a 20%/80% game)
  • 43. RESULT: You build something that nobody wants! • PIC
  • 44. Build it and they will come!
  • 45. Traditional Sequential Approach Lean Startup Approach
  • 46. THE LEAN STARTUP APPROACH 1. FAST and Cheap 2. MULTIPLE full iteration cycles 3. Gives you MULTIPLE opportunities to LEARN/VALIDATE your thinking 4. Gives you MULTIPLE attempts to SUCCEED/FAIL 5. Gives you MULTIPLE opportunities to PIVOT
  • 47. Traditional Sequential Approach Lean Startup Approach
  • 48. Minimum Viable Product
  • 49. MVP Crappy products nobody wants MINIUM VIABLE Expensive products that require to much time and money
  • 50. “Any additional work beyond what was required to start learning is waste, no matter how important it might have seemed at the time.” The Dropbox MVP
  • 51. “The first version of Gmail was literally written in a day.” – Paul Buchheit (creator and lead developer of Gmail) “Entrepreneurship in a lean startup is really a series of MVP’s” – Eric Ries “If Apple can launch a smartphone without Find or Cutand-Paste, what can you cut out of your product requirements?” – Sramana Mitra
  • 52. MVP
  • 53. MVP #5
  • 54. MVP #1 PowerPoint Deck + Hristo Neychev
  • 55. VALIDATED ASSUMPTIONS/HYPOTHESIS • Customers are willing to spend time to learn more about eyeglass lenses • Explaining the benefits of high quality lenses changes customers buying decision (upsell)
  • 56. MVP #2 Info in the deck fits your prescription
  • 57. MVP #3 Self-service deck (no Hristo Neychev)
  • 58. MVP #4 Simple video playing from my laptop
  • 59. MVP #5 Ugly tablet plays 5 videos based on your prescription
  • 60. KEY LEARNING • Build multiple MVPs • Don’t spend months waiting for a nice product and then change the company's direction • Adapt your plan incrementally, inch by inch, minute by minute • Genchi Genbutsu - "go and see for yourself"
  • 61. WHAT DO I VALIDATE? Test the founders hypothesis about: 1. Customer problem 2. Product concept 3. If the minimum feature set solve that problem What if I fail to validate the hypothesis?
  • 62. Change in the strategy without changing the vision
  • 63. PIVOT “Structured course correction designed to test a new fundamental hypothesis about the product, strategy, and engine of growth” Eric Ries The direction of your PIVOT depends on your vision!
  • 64. PIVOT EXAMPLE 1 WAS: “The Point” began as a platform for mobilizing groups of people towards action for various causes PIVOTED TO: only one group action - group buying
  • 65. PIVOT EXAMPLE 2 WAS: blended elements of Foursquare and Mafia Wars in a mobile app PIVOTED TO: remove everything except the photosharing feature, thus renamed to “Instagram”
  • 66. PIVOT EXAMPLE 3 WAS: “application that will allow individuals to "beam" sums of money between handheld devices such as mobile phones, Palm Pilots, and pagers” 07.27.99 PIVOTED TO: online payments
  • 67. PIVOT EXAMPLE 4 WAS: Cloud-based IDE for desktop development THEN: Cloud-based IDE for Mobile development THEN: Cloud services for hybrid mobile developers NOW: Cloud platform for Mobile development
  • 68. Action Plan
  • 69. Idea MVP3 First product PIVOT or PERSEVERE Quick research MVP3 PIVOT or Business model canvas Hypothesis / Assumptions PERSEVERE MVP1 MVP2 Abandon this direction
  • 70. ASSUMPTIONS 1. List all assumptions 2. Create MVP(s) to VALIDATE all assumptions 3. BUILD-MEASURE-LEARN 4. List all new assumption 5. Create MVP(s) to VALIDATE all new assumptions 6. BUILD-MEASURE-LEARN …rinse and repeat
  • 71. YOUR BIGGEST FEAR? •No money? •No time? •No good ideas? •No motivation? •No co-founder?
  • 73. CLOSING WORDS Build PRODUCT IDEAS Learn Measure DATA • Move as fast as possible • Learn as much as possible • Don’t be afraid to PIVOT • Don’t be afraid to FAIL • VALIDATE everything
  • 74. HAPPY VALIDATION! Thank you! Hristo Neychev HristoNeychev HristoNeychev @HristoNeychev