Lean Startups: a Learning Organization

Lean Startup™: a Learning Organization
@vladblagojevic
@nickboucart
@sirris_be

Agile Development
is good for…

Will agile help them build better products?
Welcome to the world of startups

Google Wave
Build it, and they will come…
(good products = big bucks)
Right?

Startup is more than product alone
What do you need for a successful business?

Tool #1: Business Model Canvas
What do you offer?
Value?
Uniqueness?
Who are your customers?
How to communicate & deliver?
Auto/personal/communities?
How will you make money?
What do you need to build up?
What will you need to master?
What can you outsource to whom?
What are my costs?

Let’s fill in a canvas
Groupon: deal of the day in your inbox.
Get 50%-90% off the best stuff your city has to offer.

Merchant Acquisition
Personal/Call Centers
Copy-writing
Automated/E-mail
Merchants
New, local customers (guarantee #)
Deal selection
Consumers
Discounts
Direct sales
Email DB
Google ads
Personalization engine
Social media
50% commission
Cust. acquisition (30% of revenue)
Merchant Acquisition (sales = ½ employees)
20% unfulfilled groupons
Churn

Part II
Entrepreneurship as a science

began as a MMO game
What happened
here?
began with PDA payment tool

Conditions of extreme uncertainty
Who is the customer?
What do they value?
What is our product anyway?

The guessing game
guess
guess
guess
guess
guess
guess
guess
guess
guess

Startup is a temporary organization with purpose to search for a repeatable and scalable business model.
S. Blank
Startup ~ research

Entrepreneurship as a science

State your Hypotheses

Sketch your Business
parkr™
Bootstrapping: parking scouts
SMS
Help find parking
Drivers in cities
Mobile app
GPS producers
Monetize unused parking
Near-location notifier + UI
App store
Community
Viral
User credit cards
Micro commission
Community (parking spotter)
Platform

Identify Major Risks
parkr™
SMS
Help find parking
Drivers in cities
Mobile app
GPS producers
App store
Community
Viral
User credit cards
Micro commission
Community (scouts)
Platform

Good start: problem-solution fit
Customers
do I know who they are & how to reach them?
Segment? Early adopter?
Roles: user, economic buyer, influencer, saboteur?
How do they search for products?
Problem
top 3 customer problems?
Pain level: must have vs nice to have
Awareness: active vs. latent
Alternatives : how do they deal with these problems today?
cheatsheet
Solution
top 3 product features?
Do they solve the top 3 problems?
Barriers to adoption (e.g. fit/integration with existing workflow)?
Is my price accepted?

Experiment

Example 1: Problem-Solution Interview
Would you pay $20 a month to use a tool like this?
A 1stproblem is…
Does this resonate with you? How do you deal with it today?
Is it a must-have?...
Use Mocks
This is how our solution looks today (screen per problem).
Which of the screens resonated the most? Which could you live without? Are there any additional features you think are missing?

Example 2: Landing Page Experiment
Call to action
Trouble Parking in Brussels?
www.parkr.com
Find parking when you need it.
Park easily in busy streets of Brussels
Paying too much for parking?
www.parkr.com
Monetize your unused parking time and help others find free parking!

Example 3: Fake your Product
Concierge MVP
Wizard of Oz

Pivot or persevere

What is a pivot?
CHEATSHEET
Customer problem pivot: same product, same segment, different problem
Starbucks : started selling coffee beans & espresso makers
Segment pivot: same product , similar problem, different set of customers
e.g. consumers aren’t buying, enterprises have a similar problem
Sometimes a pure marketing change
Technology pivot: repurpose the technology to solve a more pressing or marketable problem
Product feature pivot: remove features for focus, or to add features for a more holistic solution
pay close attention to what real customers are doing
Revenue model pivot
e.g. from a premium customized, to a low price commoditized solution
e.g. from a one-time sale to monthly subscription or license fees
e.g. razor versus blade strategy
Sales channel pivot: use lessons learned from customers to switch from direct sales
E.g. distribution channel, ecommerce, white-labeling …
Product versus services pivot: if products are too different or too complex to be sold effectively to the customer with the problem
bundle support services with the product, education offerings...
Major competitor pivot: react when a major new player or competitor jumps into your space
one of the above pivots to build your differentiation and stay alive
Change of an aspect of a business model
Successful startups change direction quickly
Based on learning
Grounded in the vision
They keep one foot in the past and place one foot in a new possible future
Vision: search space

Gather data, draw conclusions
Parkr™ foursquare for parking spots
SMS
Help find parking
Drivers in cities
Community
GPS producers
App store
Cities
Community
Viral
Promoting public transport
User credit cards
Mobile app
App fee
Micro commission
Building Community (critical mass)
Subvention
Platform

Closing words

Onto the Product Development
Continuous
deployment
Pivot
Root-cause
Metrics
Feedback
Lean startup
build-measure-learn loop
by Eric Ries

#tips from the trenches
Counter-intuitive and beyond comfort zone
Learn from the data
You don’t get a gold star for following the process
It’s okay to be opportunistic
…but stay grounded in your vision
Speed
If you’re really on to something, there are other 4-5 companies pursuing a similar vision
Techniques helpful, but you need to be very creative
Emotional rollercoaster
Find mentors

References
Lean Startup by Eric Ries
startuplessonslearned.com
theleanstartup.com/book
sllconf.com
Steve Blank
steveblank.com
steveblank.com/books.html
Ash Maurya
ashmaurya.com
runningleanhq.com (book)
Dave McClure
AARRR: Startup metrics for pirates
Tools
leancanvas.com leanlaunchlab.com
usertesting.com
KissMetrics, Piwik
uservoice.com
More references
businessmodelgeneration.com
venturehacks.com
500hats.typepad.com
paulgraham.com
news.ycombinator.com/
Even more: steveblank.com/tools-and-blogs-for-entrepreneurs

Local
Startup Weekend Brussels 21-23 October
Featuring Ash Maurya
brussels.startupweekend.org
betagroup.be
Founder Institute & MIC
westartup .eu
techbrew.be
Talk to us
Vladimir Blagojevic
vladimir .blagojevic@sirris.be
blog.launched.be
@vladblagojevic
Nick Boucart
nick.boucart@sirris.be
sinnobok.org
@nickboucart
Book: The art of software innovation

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Lean Startups: a Learning Organization

by Vladimir Blagojevic

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