Introduction to Lean Startups with Steve Guengrich
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Introduction to Lean Startups with Steve Guengrich

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Introduction to Lean Startups with Steve Guengrich Introduction to Lean Startups with Steve Guengrich Presentation Transcript

  • Introduction to Lean Startups Steve Guengerich May 22, 2014
  • You are here
  • How many know or would identify themselves as a Lean Startup
  • new product ideas to get 1 successful product58
  • change their original plans drastically66%
  • Not a better Plan A But a path to a plan that works.
  • Lean Startup is a rigorous process for iterating from a Plan A to a plan that works
  • Agenda 1. What is a Lean Startup? 2. What does a Lean Startup look like? 3. How can you use Lean to define and measure progress?
  • New Idea “Stages of Adoption” • Ignored • Misunderstood • Obvious – now and before
  • We are Lean because… • we got a great deal on our furniture…
  • We are Lean because… • we got a great deal on our furniture… • we surveyed all our customers and found that…
  • We are Lean because… • we got a great deal on our furniture… • we surveyed all our customers and found that… • we’ve implemented continuous deployment…
  • A Lean Startup is about speed Startups that succeed are those that manage to iterate enough times before running out of resources. - Eric Ries
  • A Lean Startup is about focus Focus on the right actions that are important to the startup, and ignore the rest.
  • Characteristics of a Lean Startup
  • Business Model vs. Business Plan
  • Business model hypothesis 1. What is the problem I’m solving? 2. Who is the customer? 3. How – business model
  • Business Model Canvas (lean edition) Problem Solution Unique Value Proposition Unfair Advantage Customer Segments Key Activity Channels Cost Structure Revenue Streams Top 3 problems Top 3 features Single, compelling clear message that states why you are different and worth buying Can’t be easily copied or bought Target customers Activity that drives retention/ revenue Path to customers Customer acquisition costs Distribution costs Hosting People, etc. Revenue model Life time value Revenue Gross margin
  • Business Model Canvas (nonprofit & lean edition) Problem Solution Unique Value Proposition Competitive Advantage Customer Segments Key Activity Channels Cost Structure Revenue/Outcome Streams Top 3 problems you are trying to solve Top 3 features of your solution Single, compelling clear message that states why you are different and worth buying or investing in Can’t be easily copied or bought Target customers, clients, and stakeholders served Activity(ies) that drives revenue / success Path(s) to reaching/serving customers Customer acquisition costs Distribution costs Hosting People, etc. 1. Financial outcomes • Revenue model • Lifetime value • Revenue • Gross margin 2. Non-financial outcomes • Social impact • Mission-related objectives • Behavior changes Key Resources & Internal Alignment • Degree of board and other critical path stakeholder buy-in • Physical resources needed • People resources needed • Intellectual resources needed
  • Validate Problem / Solution Fit Do I have a problem worth solving? Problem/solution fit Product/market fit Scale
  • Problem/Solution Fit - Lean Canvas P S UVP UA CS KA CH C$ R$ Top 3 problems Top 3 features Single, compelling clear message that states why you are different and worth buying Can’t be easily copied or bought Target customers Activity that drives retention/ revenue Path to customers Customer acquisition costs Distribution costs Hosting People, etc. Revenue model Life time value Revenue Gross margin
  • Achieve Product / Market Fit Have I built something people want? Problem/solution fit Product/market fit Scale
  • Product development gets in the way of learning Very little learning Requirements Development QA Release Some learning Most learning happens here
  • Involve customers throughout product dev Requirements Continuous Deployment Release Customer Validation Customer Discovery
  • Product/Market Fit - Lean Canvas P S UVP UA CS KA CH C$ R$ Top 3 problems Top 3 features Single, compelling clear message that states why you are different and worth buying Can’t be easily copied or bought Target customers Activity that drives revenue/ retention Path to customers Customer acquisition costs Distribution costs Hosting People, etc. Revenue model Life time value Revenue Gross margin
  • Scale - Lean Canvas P S UVP UA CS KA CH C$ R$ Top 3 problems Top 3 features Single, compelling clear message that states why you are different and worth buying Can’t be easily copied / bought Target customers Activity that drives revenue/ retention Path to customers Customer acquisition costs Distribution costs Hosting People, etc. Revenue model Life time value Revenue Gross margin
  • After Product / Market Fit Problem/solution fit Product/market fit Scale Validated learning Pivots Growth Optimizations
  • Start with what matters P S UVP UA CS KA CH C$ R$ Problem #1 Problem #2 Problem #3 Feature #1 Feature #2 Feature #3 Founders Marketers
  • But also tackle the riskiest part P S UVP UA CS KA CH C$ R$ Problem #1 Problem #2 Problem #3 Feature #1 Feature #2 Feature #3 Founders Marketers Something that can’t be copied or bought Personal authority Website Subscription model: $49 / mo.
  • Formulate falsifiable hypotheses Leap of Faith: Being known as an “expert” will drive early adopters Hypothesis: Blog post will drive > 100 early sign-ups
  • Build accessible dashboards Hypothesis Metrics Week 1 Week 2 Hypothesis Metrics Week 1 Week 2 Hypothesis Metrics Week 1 Week 2 CH CS P Personal authority will drive early adopters Early adopters will primarily be pre-product/market fit companies Problem fit Blog post will drive > 100 early sign-ups Number of teaser 72 20 page sign-ups Conduct 30-50 customer interviews within Number of customer 5 9 4 weeks interviews 80% of early adopters will be founders Percentage of 4/5 6/9 interviewees that fit this description 80% of early adopters will vote problem Number of must- 3/3 7/9 as must-have have votes from customer interviews
  • Make the results auditable
  • Run board meetings in a lessons learned format
  • Scale vs. product/market fit Problem/solution fit Product/market fit Scale Validated learning Pivots Growth Optimizations
  • After product/market fit, some level of success is almost always guaranteed.
  • True False False True Revenue No Yes No Usage Yes Beware the “false positives”
  • Pivots are about finding a plan that works Optimizations are about accelerating that plan
  • Pivots Experiments: Validate Goal: Course correction Optimization Experiments: Refine Goal: Efficiency
  • You stand to learn the most when the probability of the expected outcome is 50%; that is, when you don’t know what to expect.
  • Scale - Lean Canvas P S UVP UA CS KA CH C$ R$ Top 3 problems Top 3 features Single, compelling clear message that states why you are different and worth buying Can’t be easily copied / bought Target customers Activity that drives revenue/ retention Path to customers Customer acquisition costs Distribution costs Hosting People, etc. Revenue model Life time value Revenue Gross margin
  • While revenue is the first form of validation, retention is the ultimate form of validation
  • Every process works until you add people; key is balancing your hiring with equal number of Experimenters Specialists
  • Problem/solution fit Product/market fit Scale Your goal: Learning Your investor’s goal: Growth Your goal: Growth Your investor’s goal: Growth Ideal time to raise funding
  • Leverage your advisors for good advice but don’t follow it, apply it. Advice <> judgment or validation Advice = identifying and prioritizing risk
  • Thanks! Steve Guengerich @sguengerich 703-957-0797