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Learn-Measure-Build
Craft Useful Experiments By
Running Backwards
Janice Fraser
December 2013

Monday, December 16, 13

1
© LUXR.CO 2013
Monday, December 16, 13

2
Luxr.co
Radically helpful workshops for
startup founders
First month free...use discount code:

TEHCARD
© LUXR.CO 2013
Mon...
TWEET!
@clevergirl
@luxrco
#LeanStartup

© LUXR.CO 2013
Monday, December 16, 13

4
• Learn the difference between an experiment and a solution test.
• Discover the seven steps to crafting an experiment wit...
© 2013 LUXr Incorporated, www.luxr.co
Monday, December 16, 13

6
June & Pete’s

Wedding Cake

© 2013 LUXr Incorporated, www.luxr.co
Monday, December 16, 13

6
http://saptstrength.com/

© 2013 LUXr Incorporated, www.luxr.co
Monday, December 16, 13

7
June

Pete

http://saptstrength.com/

© 2013 LUXr Incorporated, www.luxr.co
Monday, December 16, 13

7
http://saptstrength.com/

© 2013 LUXr Incorporated, www.luxr.co
Monday, December 16, 13

8
April
May
June
July
August

http://saptstrength.com/

© 2013 LUXr Incorporated, www.luxr.co
Monday, December 16, 13

8
sedonaweddingcakes.com

© 2013 LUXr Incorporated, www.luxr.co
Monday, December 16, 13

9
freebestpictures.blogspot.com

© 2013 LUXr Incorporated, www.luxr.co
Monday, December 16, 13

10
thekitchn.com

© 2013 LUXr Incorporated, www.luxr.co
Monday, December 16, 13

11
Zoe Clark, The Cake Parlour

© 2013 LUXr Incorporated, www.luxr.co
Monday, December 16, 13

12
Zoe Clark, The Cake Parlour

© 2013 LUXr Incorporated, www.luxr.co
Monday, December 16, 13

12
sedonaweddingcakes.com

© 2013 LUXr Incorporated, www.luxr.co
Monday, December 16, 13

13
sedonaweddingcakes.com

Zoe Clark, The Cake Parlour

© 2013 LUXr Incorporated, www.luxr.co
Monday, December 16, 13

13
LEAN
Startup
© 2013 LUXr Incorporated, www.luxr.co
Monday, December 16, 13

14
LEAN
Startup
© LUXR.CO 2013
Monday, December 16, 13

15
Build
measure
learn!

© LUXR.CO 2013
Monday, December 16, 13

16
© LUXR.CO 2013
Monday, December 16, 13

17
© LUXR.CO 2013
Monday, December 16, 13

17
Lean Startup is NOT

© LUXR.CO 2013
Monday, December 16, 13

18
Lean Startup is NOT

Cheap Startup

© LUXR.CO 2013
Monday, December 16, 13

18
Lean Startup is NOT

Cheap Startup
Fast Startup

© LUXR.CO 2013
Monday, December 16, 13

18
Lean Startup is NOT

Cheap Startup
Fast Startup
Shortcut Startup
© LUXR.CO 2013
Monday, December 16, 13

18
Lean Startup is...

© LUXR.CO 2013
Monday, December 16, 13

19
Lean Startup is...
An approach for building companies that are
creating new products and services in
situations of extreme...
Lean Startup is...
An approach for building companies that are
creating new products and services in
situations of extreme...
1.
2.
3.
4.

List your assumptions.
Understand your customers.
Experiment efficiently.
Adjust direction based on evidence....
1.
2.
3.
4.

List your assumptions.
Understand your customers.
Experiment efficiently.
Adjust direction based on evidence....
Go backward to go forward.
Learn

Build

Measure

© LUXR.CO 2013
Monday, December 16, 13

22
Go backward to go forward.
Learn

Build

Measure

© LUXR.CO 2013
Monday, December 16, 13

22
Go backward to go forward.
Learn

Build

Measure

© LUXR.CO 2013
Monday, December 16, 13

22
Go backward to go forward.
Learn

Build

Measure

© LUXR.CO 2013
Monday, December 16, 13

22
Go backward to go forward.
Learn

Build

Measure

© LUXR.CO 2013
Monday, December 16, 13

22
Think of it like this...

© LUXR.CO 2013
Monday, December 16, 13

23
Think of it like this...

TDD

© LUXR.CO 2013
Monday, December 16, 13

23
Think of it like this...

TDD
A Lean Startup is a test-driven
COMPANY

© LUXR.CO 2013
Monday, December 16, 13

23
Write the test first

© LUXR.CO 2013
Monday, December 16, 13

24
RISK = UNVALIDATED EFFORT

Plot the difference

MAKE
MAKE
MAKE

release

release

release

THINK

TIME

© LUXR.CO 2013
Mon...
RISK = UNVALIDATED EFFORT

Lots of little wiggles

TIME

© LUXR.CO 2013
Monday, December 16, 13

26
RISK = UNVALIDATED EFFORT

Lots of little wiggles

TIME

© LUXR.CO 2013
Monday, December 16, 13

26
RISK = UNVALIDATED EFFORT

Each wiggle is a learning cycle.

MEASURE
MAKE

BUILD

LEARN

release

BUILD

TIME

© LUXR.CO 2...
There’s a pattern to
startup work:
ideation

decision
making

ideation etc.

© LUXR.CO 2013
Monday, December 16, 13

28
In foolproof
experiments, the
results should be selfevident.
© LUXR.CO 2013
Monday, December 16, 13

29
7 steps to foolproof experiments
1.

Choose the problem to tackle. Clarify what’s
uncertain, what you need to learn.

2.

...
The Workshop

© LUXR.CO 2013
Monday, December 16, 13

31
Box Me Up
Provides you with plastic storage boxes
Tranports your stuff to storage
Pay to get your stuff back
Per-box per y...
How Products Work

© LUXR.CO

2013

Monday, December 16, 13

33
How Products Work
Users

© LUXR.CO

2013

Monday, December 16, 13

33
How Products Work
Users
Needs

© LUXR.CO

1. I need...
2. I want...
3. My goal is...

2013

Monday, December 16, 13

33
How Products Work
Users
Needs
Uses

© LUXR.CO

1. I need...
2. I want...
3. My goal is...

Mary can...

2013

Monday, Dece...
How Products Work
Users
Needs
Uses

1. I need...
2. I want...
3. My goal is...

Mary can...

Features

© LUXR.CO

2013

Mo...
How Products Work
Users
Needs
Uses

1. I need...
2. I want...
3. My goal is...

Mary can...

Features
Prototypes
User Stor...
How Products Work
Users
why
what
how

Needs

1. I need...
2. I want...
3. My goal is...

Business thinking goes here

Uses...
How Products Work
Users
why
what
how

Needs

1. I need...
2. I want...
3. My goal is...

Business thinking goes here

Uses...
How Products Work
Users
why
what
how

Needs

1. I need...
2. I want...
3. My goal is...

Business thinking goes here

Uses...
How Products Work
Users
why
what
how

Needs

1. I need...
2. I want...
3. My goal is...

Business thinking goes here

Uses...
How Products Work

THINK
MAKE
CHECK

Users
why
what
how

Needs

1. I need...
2. I want...
3. My goal is...

Business think...
4 Characteristics of
Successful Experiments
1. High-stakes learning goal.
2. Extremely clear, focused hypothesis with
cont...
Thank You!
@clevergirl
@luxrco
#LeanStartup

© LUXR.CO 2013
Monday, December 16, 13

35
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Transcript of "Learn-Measure-Build by Janice Fraser"

  1. 1. Learn-Measure-Build Craft Useful Experiments By Running Backwards Janice Fraser December 2013 Monday, December 16, 13 1
  2. 2. © LUXR.CO 2013 Monday, December 16, 13 2
  3. 3. Luxr.co Radically helpful workshops for startup founders First month free...use discount code: TEHCARD © LUXR.CO 2013 Monday, December 16, 13 3
  4. 4. TWEET! @clevergirl @luxrco #LeanStartup © LUXR.CO 2013 Monday, December 16, 13 4
  5. 5. • Learn the difference between an experiment and a solution test. • Discover the seven steps to crafting an experiment with a clear result. • Practice identifying assumptions and defining testable hypotheses. • Understand the anatomy of an experiment. • Design an experiment to test a real-life hypothesis. • "Get out of the classroom" to run a real-world experiment on your fellow conference-goers. • Define a result and make a go-forward decision. • Refine the experiment based on cost, time, and manpower. • Identify the four characteristics of successful experiments. © LUXR.CO 2013 Monday, December 16, 13 5
  6. 6. © 2013 LUXr Incorporated, www.luxr.co Monday, December 16, 13 6
  7. 7. June & Pete’s Wedding Cake © 2013 LUXr Incorporated, www.luxr.co Monday, December 16, 13 6
  8. 8. http://saptstrength.com/ © 2013 LUXr Incorporated, www.luxr.co Monday, December 16, 13 7
  9. 9. June Pete http://saptstrength.com/ © 2013 LUXr Incorporated, www.luxr.co Monday, December 16, 13 7
  10. 10. http://saptstrength.com/ © 2013 LUXr Incorporated, www.luxr.co Monday, December 16, 13 8
  11. 11. April May June July August http://saptstrength.com/ © 2013 LUXr Incorporated, www.luxr.co Monday, December 16, 13 8
  12. 12. sedonaweddingcakes.com © 2013 LUXr Incorporated, www.luxr.co Monday, December 16, 13 9
  13. 13. freebestpictures.blogspot.com © 2013 LUXr Incorporated, www.luxr.co Monday, December 16, 13 10
  14. 14. thekitchn.com © 2013 LUXr Incorporated, www.luxr.co Monday, December 16, 13 11
  15. 15. Zoe Clark, The Cake Parlour © 2013 LUXr Incorporated, www.luxr.co Monday, December 16, 13 12
  16. 16. Zoe Clark, The Cake Parlour © 2013 LUXr Incorporated, www.luxr.co Monday, December 16, 13 12
  17. 17. sedonaweddingcakes.com © 2013 LUXr Incorporated, www.luxr.co Monday, December 16, 13 13
  18. 18. sedonaweddingcakes.com Zoe Clark, The Cake Parlour © 2013 LUXr Incorporated, www.luxr.co Monday, December 16, 13 13
  19. 19. LEAN Startup © 2013 LUXr Incorporated, www.luxr.co Monday, December 16, 13 14
  20. 20. LEAN Startup © LUXR.CO 2013 Monday, December 16, 13 15
  21. 21. Build measure learn! © LUXR.CO 2013 Monday, December 16, 13 16
  22. 22. © LUXR.CO 2013 Monday, December 16, 13 17
  23. 23. © LUXR.CO 2013 Monday, December 16, 13 17
  24. 24. Lean Startup is NOT © LUXR.CO 2013 Monday, December 16, 13 18
  25. 25. Lean Startup is NOT Cheap Startup © LUXR.CO 2013 Monday, December 16, 13 18
  26. 26. Lean Startup is NOT Cheap Startup Fast Startup © LUXR.CO 2013 Monday, December 16, 13 18
  27. 27. Lean Startup is NOT Cheap Startup Fast Startup Shortcut Startup © LUXR.CO 2013 Monday, December 16, 13 18
  28. 28. Lean Startup is... © LUXR.CO 2013 Monday, December 16, 13 19
  29. 29. Lean Startup is... An approach for building companies that are creating new products and services in situations of extreme uncertainty. © LUXR.CO 2013 Monday, December 16, 13 19
  30. 30. Lean Startup is... An approach for building companies that are creating new products and services in situations of extreme uncertainty. The approach advocates creating small products that test the entrepreneur’s assumptions, and using customer feedback to evolve the product, thereby reducing waste. © LUXR.CO 2013 Monday, December 16, 13 19
  31. 31. 1. 2. 3. 4. List your assumptions. Understand your customers. Experiment efficiently. Adjust direction based on evidence. © LUXR.CO 2013 Monday, December 16, 13 20
  32. 32. 1. 2. 3. 4. List your assumptions. Understand your customers. Experiment efficiently. Adjust direction based on evidence. © LUXR.CO 2013 Monday, December 16, 13 21
  33. 33. Go backward to go forward. Learn Build Measure © LUXR.CO 2013 Monday, December 16, 13 22
  34. 34. Go backward to go forward. Learn Build Measure © LUXR.CO 2013 Monday, December 16, 13 22
  35. 35. Go backward to go forward. Learn Build Measure © LUXR.CO 2013 Monday, December 16, 13 22
  36. 36. Go backward to go forward. Learn Build Measure © LUXR.CO 2013 Monday, December 16, 13 22
  37. 37. Go backward to go forward. Learn Build Measure © LUXR.CO 2013 Monday, December 16, 13 22
  38. 38. Think of it like this... © LUXR.CO 2013 Monday, December 16, 13 23
  39. 39. Think of it like this... TDD © LUXR.CO 2013 Monday, December 16, 13 23
  40. 40. Think of it like this... TDD A Lean Startup is a test-driven COMPANY © LUXR.CO 2013 Monday, December 16, 13 23
  41. 41. Write the test first © LUXR.CO 2013 Monday, December 16, 13 24
  42. 42. RISK = UNVALIDATED EFFORT Plot the difference MAKE MAKE MAKE release release release THINK TIME © LUXR.CO 2013 Monday, December 16, 13 25
  43. 43. RISK = UNVALIDATED EFFORT Lots of little wiggles TIME © LUXR.CO 2013 Monday, December 16, 13 26
  44. 44. RISK = UNVALIDATED EFFORT Lots of little wiggles TIME © LUXR.CO 2013 Monday, December 16, 13 26
  45. 45. RISK = UNVALIDATED EFFORT Each wiggle is a learning cycle. MEASURE MAKE BUILD LEARN release BUILD TIME © LUXR.CO 2013 Monday, December 16, 13 27
  46. 46. There’s a pattern to startup work: ideation decision making ideation etc. © LUXR.CO 2013 Monday, December 16, 13 28
  47. 47. In foolproof experiments, the results should be selfevident. © LUXR.CO 2013 Monday, December 16, 13 29
  48. 48. 7 steps to foolproof experiments 1. Choose the problem to tackle. Clarify what’s uncertain, what you need to learn. 2. Understand the possible answers. 3. Brainstorm “what you could do to prove it”. 4. Choose the most broadly differentiated set of indicators. 5. Run the experiment. 6. Write down the results...on a sheet of paper. 7. Project the results into your future. © LUXR.CO 2013 Monday, December 16, 13 30
  49. 49. The Workshop © LUXR.CO 2013 Monday, December 16, 13 31
  50. 50. Box Me Up Provides you with plastic storage boxes Tranports your stuff to storage Pay to get your stuff back Per-box per year 1 round trip per transaction Is it profitable? Storage facility “outside the city” that they have a long-term lease They keep your stuff for a year Fully secured; all sorts of insurance; 24-hr armed security. 3 sizes of box Target customer is Young Families, 2 incomes, urban, 2 kids, owns home Full “Bill of Lading” Which you fill out online. Max insurance is $500/box. Next-day pickup and delivery COGS: $12/box, avg., $6/box per storage, Assumption 40% capacity yr 2. Within 15 of the city If no-pay, stuff gets auctioned after 90 days of no-pay. Not a Moving company. Drop-off and pickup are same location. Nothing prevents business use RIght now margin is negative, because we’re not at scale. No union issues. Breaks even in year 3. No special handling boxes. Raised $5m series A from Sand Hill Road VCs 150 customers in SF and 42 in NY. Size = boxbee size Committed to pay $28/box/yr. Cost of customer acquisition? Nobody is paying up front. © LUXR.CO 2013 Monday, December 16, 13 32
  51. 51. How Products Work © LUXR.CO 2013 Monday, December 16, 13 33
  52. 52. How Products Work Users © LUXR.CO 2013 Monday, December 16, 13 33
  53. 53. How Products Work Users Needs © LUXR.CO 1. I need... 2. I want... 3. My goal is... 2013 Monday, December 16, 13 33
  54. 54. How Products Work Users Needs Uses © LUXR.CO 1. I need... 2. I want... 3. My goal is... Mary can... 2013 Monday, December 16, 13 33
  55. 55. How Products Work Users Needs Uses 1. I need... 2. I want... 3. My goal is... Mary can... Features © LUXR.CO 2013 Monday, December 16, 13 33
  56. 56. How Products Work Users Needs Uses 1. I need... 2. I want... 3. My goal is... Mary can... Features Prototypes User Stories Themed Releases © LUXR.CO This Week 2013 Monday, December 16, 13 33
  57. 57. How Products Work Users why what how Needs 1. I need... 2. I want... 3. My goal is... Business thinking goes here Uses Mary can... Features Prototypes User Stories Themed Releases © LUXR.CO This Week 2013 Monday, December 16, 13 33
  58. 58. How Products Work Users why what how Needs 1. I need... 2. I want... 3. My goal is... Business thinking goes here Uses Mary can... Features Sketches, wireframes, pixels Prototypes User Stories Themed Releases © LUXR.CO This Week 2013 Monday, December 16, 13 33
  59. 59. How Products Work Users why what how Needs 1. I need... 2. I want... 3. My goal is... Business thinking goes here Uses Mary can... Features Sketches, wireframes, pixels Prototypes User Stories Themed Releases © LUXR.CO This Week 2013 Monday, December 16, 13 33
  60. 60. How Products Work Users why what how Needs 1. I need... 2. I want... 3. My goal is... Business thinking goes here Uses Mary can... Features Sketches, wireframes, pixels Prototypes User Stories Themed Releases © LUXR.CO This Week 2013 Monday, December 16, 13 33
  61. 61. How Products Work THINK MAKE CHECK Users why what how Needs 1. I need... 2. I want... 3. My goal is... Business thinking goes here Uses Mary can... BUILD MEASURE LEARN Features Sketches, wireframes, pixels Prototypes User Stories Themed Releases © LUXR.CO This Week 2013 Monday, December 16, 13 33
  62. 62. 4 Characteristics of Successful Experiments 1. High-stakes learning goal. 2. Extremely clear, focused hypothesis with controlled variables. 3. Broadly differentiated indicators covering all possible outcomes. 4. Right size and scale. © LUXR.CO 2013 Monday, December 16, 13 34
  63. 63. Thank You! @clevergirl @luxrco #LeanStartup © LUXR.CO 2013 Monday, December 16, 13 35
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