Lean Startup - Marcus WhitneyPresentation Transcript
hiThanks for coming to this session.
You Are Here• Interested in startups that create products• Interested in the concept of “lean startups”• Have been, currently are, or are thinking about founding a startup
I hope to get you here• Clear, high level understanding of Market Validation, Customer Development and The Lean Startup• Some level of understanding of how these benefit the creation of a successful product• Excited to look into these three models and try them out and see what works for you
Market ValidationWhat does this mean to you?
What is Market Validation?A process fordetermining whetheror not your targetmarket is:• Real• Worthy of your idea• Addressable
Really. What is Market Validation?• Primary (Proprietary) Market Research 1. Face to Face Interviews 2. Phone Interviews 3. On Line Interviews / Surveys• Secondary Market Research – Analysts – Market Research
What does Market Validation Teach Us?• What state is the market in? – Early adopter, early majority, late majority, laggards• What is the competition? – Actual competitors – Alternatives to a true solution• What are customers willing to pay?• How serious is the need?• What is the operational cost to adopting your proposed solution?
Takeaway:Market Validation ensures that youactually have an opportunity worthpursuing, and helps you understand what solution will actually capture that market opportunity.
Customer Development What does this mean to you?
What is Customer Development?A process for achievingproduct-market fit thathelps you todefinitively:• Define yourcustomer• Define your marketstate• Define your go tomarket strategy• Ensure thesedefinitions are all real
Customer Development:“The Four Steps To Epiphany” Achieve Achieve Market Fit Market Dominance
Really. What is Customer Development?• Business Visionary (CEO) – Customer (Day to day user, Economic buyer, decision maker) – Problem / Solution • Scale of recognition (Latent or Active) – Impact of pain / Mission Critical? – How does the customer spend their day now?• Tech Co-Founder (CTO or Chief Maker) – Product (Features, Benefits, IP, TCO, Dependency Analysis)
Takeaway: Customer Development is a discipline for bringing a product tothe market successfully in a startup.
Lean StartupWhat does this mean to you?
What is a Lean Startup?A learningorganization, seekingto discover a workingbusiness model
How does a Lean Startup Work? The Lean Startup Loop
Customer Development Engineeringhttp://www.startuplessonslearned.com/2008/09/customer-development-engineering.html
Takeaway:A Lean Startup is a solution findingorganization, who’s sole purpose is to validate a business model.
Business ModelWhat does this mean to you?
What is a Business Model?A business modeldescribes therationale of how anorganizationcreates, delivers, andcaptures value(economic, social, orother forms of value).
Business Model Canvas
Business Model Design + Customer Development
Sounds Nice. Here’s Reality• Startups are hard. It’s REALLY difficult to actually execute. Don’t ask me why. It just is.• You will be way better off if you are highly skilled and experienced in your endeavor than otherwise.• Building a quality team is key, and also hard. A-Level players with good chemistry have the best chance of winning.
More Reality• You may need money to achieve product-market fit. Raising money sucks for most of us, and has nothing to do with innovation or doing great work.• Competition validates your market, but can throw you off your path when you start losing deals to it.• Unless you have innovated before and gone through the pain of mistakes, you will likely make a lot of them.
How to deal with reality• Lone founder is a tough road. Get a co-founder.• Get advisors and mentors. You have blind spots.• Get laser focused on a minimum viable product. (makes raising money easier when you have success, or maybe not necessary at all)• Make goals and measure everything.• Make sure you can’t not do the startup. It’s the only thing that will get you through.
Practical Application:• Find a balance of Market Validation & Customer Development that works for you.• Check yourself against your Business Model Canvas.• Try Squared Circle Agile for Product Development (I made this crap up).• Say AAARR! To Determine your MVP. (Acquisition, Activation, Retention, Referral & Revenue)• Be a Data Driven Founder.
Squared Circle Agile:“The Perfect Square Has No Corners” Tao Te Ching 41
Product Market Validation as Metrics
AARRR Model (Viral, Sticky or Paid)http://500hats.typepad.com/500blogs/2010/01/startup-metrics-for-pirates-lean-startup-circle-jan-2010.html
Data Driven Startup Philosophy & Framework The point of testing is to prove or disprove assumptions quickly Optimize Your Startup for Learning not DataChecklist for Data Driven Startup:★ Operating Dashboard★ Conversion Funnel Analysis★ Cohort Analysis http://www.slideshare.net/dcancel/data-drivenstartups
Data Driven Operating Dashboard http://www.slideshare.net/dcancel/data-drivenstartups
Data Driven Conversion Funnel http://www.slideshare.net/dcancel/data-drivenstartups
Data Driven Cohort Analysis http://www.slideshare.net/dcancel/data-drivenstartups