Demystifying Lean Startups

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Lean Startup comes with its own new vocabulary, and quite often, we either misunderstand those new terms, or try to find a parallel from the old world. This presentation is more like a Lean Startup …

Lean Startup comes with its own new vocabulary, and quite often, we either misunderstand those new terms, or try to find a parallel from the old world. This presentation is more like a Lean Startup 101

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  • 1. Demys&fying     Lean  Startups   Tathagat  Varma  
  • 2. Discussion  Points   Challenges  with  tradi&onal  startups  and  NPD   The  Lean  Startup  Model,  Principles  and  Methods   Does  it  work  for  New  Product  Development?   Case  Studies  
  • 3. Once  upon  a  &me…  
  • 4. Welcome  to  the  Bold  New  World!   “AJer  about  a  week  of  coding,  Zuckerberg  launched  thefacebook.com  last   Wednesday  aJernoon.  The  website  combines  elements  of  a  standard  House   face  book  with  extensive  profile  features  that  allow  students  to  search  for   others  in  their  courses,  social  organiza&ons  and  Houses.     “Everyone’s  been  talking  a  lot  about  a  universal  face  book  within  Harvard,”   Zuckerberg  said.  “I  think  it’s  kind  of  silly  that  it  would  take  the  University  a   couple  of  years  to  get  around  to  it.  I  can  do  it  be-er  than  they  can,  and  I  can   do  it  in  a  week.”     As  of  yesterday  aJernoon,  Zuckerberg  said  over  650  students  had  registered   use  thefacebook.com.  He  said  that  he  an&cipated  that  900  students  would   have  joined  the  site  by  this  morning.     “I’m  prey  happy  with  the  amount  of  people  that  have  been  to  it  so  far,”  he   said.  “The  nature  of  the  site  is  that  each  user’s  experience  improves  if  they   can  get  their  friends  to  join  it.”   hp://www.thecrimson.com/ar&cle/2004/2/9/hundreds-­‐register-­‐for-­‐new-­‐facebook-­‐website/#    
  • 5. Ok,  I  have  an  idea…a  BIG  idea!!!   How  should   I  proceed?  
  • 6. I  could  do…   OR   Dot-­‐com-­‐era  style     “Stealth  Mode”   Startup   Cowboy  style   “Just  Do  It”   Startup  
  • 7. hp://datacatalyst.marsdd.com/accelerators-­‐worth-­‐the-­‐hype/    
  • 8. hp://www.emilianosoldipmp.info/wp-­‐content/uploads/2012/08/Stacey.png     That’s  the   problem  we   need  to  solve!   And  these  are   the  methods  we   are  using!!!  
  • 9. Lean  Startup  Model   •  The  Lean  Startup  provides  a  scien=fic  approach  to   crea&ng  and  managing  startups  and  get  a  desired   product  to  customers'  hands  faster.  The  Lean  Startup   method  teaches  how  to  drive  a  startup-­‐how  to  steer,   when  to  turn,  and  when  to  persevere-­‐and  grow  a   business  with  maximum  accelera&on.  It  is  a  principled   approach  to  new  product  development.   •  Lean  Startup  favors     –  experimenta=on  over  elaborate  planning,     –  customer  feedback  over  intui&on,  and     –  itera=ve  design  over  tradi&onal  ‘big  design  up  front’   development  
  • 10. What’s  a  Startup?   “A  startup  is  a  human  ins.tu.on  designed  to   create  a  new  product  or  service  under   condi.ons  of  extreme  uncertainty”   The  products  a  startup  builds  are  really   experiments;  the  learning  about  how  to   build  a  sustainable  business  is  the  outcome   of  those  experiments.  
  • 11. Lean  Startup  Principles   Entrepreneurs  are  everywhere   Entrepreneurship  is  management   Validated  Learning   Build-­‐Measure-­‐Learn   Innova&on  Accoun&ng  
  • 12. Customer  Development  
  • 13. GET OUT OF THE BUILDING…
  • 14. Minimize   TOTAL  =me   through  the   loop   Instead  of  making  complex  plans   that  are  based  on  a  lot  of   assump&ons,  you  can  make   constant  adjustments  with  a   steering  wheel  call  the  Build-­‐ Measure-­‐Learn  feedback  loops.   Through  this  process  of  steering,   we  can  learn  when  and  if  it’s  &me   to  make  a  sharp  turn  called  a  pivot   or  whether  we  should  persevere   along  the  current  path   The  MVP  is  that  version  of  a  new   product  which  allows  a  team  to   collect  the  maximum  amount  of   validated  learning  about   customers  with  the  least  effort  or   development  &me.  The  MVP  lacks   many  features  that  may  prove   essen&al  later  on.       MVP  is  not  a  minimal  product!  
  • 15. A/B  Tes&ng   hp://wp.streetwise.co/wp-­‐content/uploads/2012/07/A-­‐B-­‐tes&ng.jpg    
  • 16. Validated  Learning   •  Validated  learning  about  customers  is  the  measure  of  progress  in  a  Lean   Startup  –  not  lines  of  working  code  or  achieving  product  development   milestones.   •  Process  in  which  one  learns  by  trying  out  an  ini&al  idea  and  then   measuring  it  to  validate  the  effect.  Each  test  of  an  idea  is   single  itera&on  in  a  larger  process  of  many  itera&ons  whereby  something   is  learnt  and  the  lessons  applied  to  the  succeeding  tests.[1]   •  Typical  steps  in  validated  learning:   –  Specify  a  goal   –  Specify  a  metric  that  represents  the  goal   –  Act  to  achieve  the  goal   –  Analyze  the  metric  -­‐  did  you  get  closer  to  the  goal?   –  Improve  and  try  again  
  • 17. Innova&on  Accoun&ng   •  Enables  startups  to  prove  objec&vely  that  they  are  learning   how  to  grow  a  sustainable  business   –  Use  an  MVP  to  establish  real  data  on  where  the  company  is   right  now   –  Startups  must  aempt  to  tune  the  engine  from  the  baseline   toward  the  ideal.  This  could  take  many  aempts.   –  Pivot  or  persevere   •  Ac&onable  vs.  Vanity  Metrics   –  For  a  report  to  be  considered  ac&onable,  it  must  demonstrate   clear  cause  and  effect.  Otherwise,  it  is  a  vanity  metric.   –  Ac&onable  metrics  can  lead  to  informed  business  decisions  and   subsequent  ac&on.[24][1]  These  are  in  contrast  to  'vanity  metrics'   -­‐  measurements  that  give  “the  rosiest  picture  possible”  but  do   not  accurately  reflect  the  key  drivers  of  a  business.  
  • 18. Pivot  
  • 19. Kanban  
  • 20. Con&nuous  Deployment  
  • 21. Products  and  Services  that  have   benefited  from  Lean  Startup  
  • 22. Conclusions   Complex  solu&ons  need  feedback-­‐based  adap&ve   approach   Managing  a  ‘startup’  successfully  requires  early   valida=ons  on  key  hypotheses   Lean  Startup  model  offers  an  integrated  approach  to   solve  complex  problems  in  an  uncertain  environment  
  • 23. References   •  hp://theleanstartup.com/#casestudies   •  hp://agbeat.com/entrepreneur/why-­‐11-­‐out-­‐of-­‐every-­‐12-­‐startups-­‐fails/   •  hp://techcrunch.com/2011/09/13/instagram-­‐and-­‐intuit-­‐founders-­‐discuss-­‐lean-­‐ startups-­‐pivots-­‐and-­‐what-­‐makes-­‐a-­‐product-­‐successful/   •  hp://www.forbes.com/sites/hbsworkingknowledge/2013/02/25/lean-­‐startup-­‐ strategy-­‐not-­‐just-­‐for-­‐startups/   •  hp://steveblank.com/   •  hp://www.startuplessonslearned.com/2009/04/validated-­‐learning-­‐about-­‐ customers.html     •  hp://www.startuplessonslearned.com/2008/09/lean-­‐startup.html     •  hp://www.startuplessonslearned.com/2008/11/what-­‐is-­‐customer-­‐ development.html     •  hps://en.wikipedia.org/wiki/Validated_learning     •  hp://www.ashmaurya.com/2010/04/3-­‐rules-­‐for-­‐building-­‐features-­‐in-­‐a-­‐lean-­‐ startup/     •  hp://www.ashmaurya.com/2011/06/your-­‐product-­‐is-­‐not-­‐the-­‐product/     •  hp://www.ashmaurya.com/2009/11/achievingproductmarkeuit/