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Lean Startups from LEI


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  • 1. The Lean Startup p #leanstartup Eric Ries (@ericries)
  • 2. Housekeeping • To enlarge slides, use the magnifying glass icon just beneath the slides and to the right on your display console • To adjust the sound, use the volume control on the console or on your computer • T ask a question, type it i t th b at th b tt To k ti t into the box t the bottom of the console and hit “submit” 2
  • 3. About the Speaker • E i Ri Eric Ries – Entrepreneur – Co-founder Co founder and CTO of IMVU – – Co author Co-author of several books – Featured in the NY Times 4/25/10 (“The Rise of the Fleet-Footed Start-Up”) Fl t F t d St t U ”) 3
  • 4. Myth #1 Myth Lean means cheap. Lean startups try to spend as little money as possible possible. Truth The Lean Startup method is not about cost, it is about speed. speed 4
  • 5. Myth #2 Myth The Lean Startup is only for Web 2 0/internet/consumer software companies 2.0/internet/consumer companies. Truth The L Th Lean Startup applies to all companies that St t li t ll i th t face uncertainty about what customers will want. want 5
  • 6. Myth #3 Myth Lean Startups are small bootstrapped startups. Truth T th Lean Startups are ambitious and are able to deploy large amounts of capital. 6
  • 7. Myth #4 Myth Lean Startups replace vision with data or customer feedback feedback. Truth Lean Startups are d i L St t driven by a compelling vision, b lli i i and are rigorous about testing each element of this vision vision. 7
  • 8. What is a Startup? A startup is a human institution designed to deliver a new product or service under conditions of extreme uncertainty uncertainty. Nothing to do with size of company, sector of the economy, or industry. 8
  • 9. Most Startups Fail 9
  • 10. Most Startups Fail 10
  • 11. Most Startups Fail 11
  • 12. Most Startups Fail • But it doesn’t have to be that way doesn t • We can do better • This talk is about how 12
  • 13. Entrepreneurship is Management • Our goal is to create an institution, not just a g j product • Traditional management practices fail • “general management” as taught to MBAs g g g • Need practices and principles geared to the startup context of extreme uncertainty • Not just for “two guys in a garage” two garage 13
  • 14. The Pivot • What do successful startups have in common? – They started out as digital cash for PDAs, but evolved into online payments for eBay – They started building BASIC interpreters, but evolved into the y g p , world's largest operating systems monopoly – They were shocked to discover their online games company was actually a p y photo-sharing site g • They were shocked to discover their online games company was actually a photo-sharing site • Pivot: change directions but stay grounded in what h d b d d h we’ve learned 14
  • 15. Speed Wins If we can reduce the time between major iterations We can increase our odds of success 15
  • 16. A Tale of Two Startups 16
  • 17. Startup 1 17
  • 18. Stealth Startup Circa 2001 18
  • 19. All About the Team 19
  • 20. A Good Plan? • Start a company with a compelling long-term vision • Raise plenty of capital • Hire the absolute best and the brightest • Hire an experienced management team with tons of startup experience t t i • Focus on quality • Build a world-class technology platform • Build buzz in the press and blogosphere 20
  • 21. In Memoriam 21
  • 22. Achieving Failure • Product launch failed - $40MM and five years of pain • … but the plan was executed well • C i l d by “shadow beliefs” that destroyed the Crippled b “ h d b li f ” th t d t d th effort of all those smart people 22
  • 23. Shadow Belief #1 We know what customers want want. 23
  • 24. Shadow Belief #2 We can accurately predict the future future. 24
  • 25. Shadow Belief #3 Advancing the plan is progress. progress 25
  • 26. A Good Plan? • Start a company with a compelling long-term vision p y p g g • Raise plenty of capital • Hi the absolute best and the b i ht t Hire th b l t b t d th brightest • Hire an experienced management team with tons of startup experience t t i • Focus on quality • Build a world-class technology platform • Build buzz in the press and blogosphere 26
  • 27. Startup 2 27
  • 28. IMVU 28
  • 29. IMVU 29
  • 30. New Plan • Shipped in six months – a horribly buggy beta product • Charged from day one • Shipped multiple times a day (by 2008 (b 2008, on average 50 times a day) ti d ) • No PR, no launch • Results 2009: profitable, revenue > $20MM 30
  • 31. Making Progress • In a lean transformation, question #1 is – which ,q activities are value-creating and which are waste? • In traditional business, value is created by delivering , y g products or services to customers • In a startup, the product and customer are unknowns p, p • We need a new definition of value for startups 31
  • 32. Traditional Product Development Unit of Progress: Advance to Next Stage Waterfall Requirements Specifications Design Problem: known Solution: known Implementation Verification Maintenance 32
  • 33. Agile Product Development Unit of Progress: A line of Working Code “Product Owner” or in-house customer Problem: known Solution: known 33
  • 34. Product Development at Lean Startup Unit of Progress: Validated Learning About Customers ($$$) Hypotheses, Experiments, Problem: known Insights Solution: known Data, Feedback, Insights 34
  • 35. Minimize TOTAL time through the loop 35
  • 36. There’s much more… Learn Faster Build Faster Split Tests Unit Tests Customer Interviews Usability Tests Customer Continuous Integration Development Incremental Five Whys Root Cause Deployment Analysis Free & Open-Source Customer Advisory Components Board Cloud Computing Falsifiable Hypotheses Cluster Immune System Product Owner Just-in-time Scalability Accountability Measure Faster Measure Faster Refactoring Customer Archetypes Split Tests Funnel Analysis Developer Sandbox Cross-functional Clear Product Owner Cohort Analysis Teams Minimum Viable Product Continuous Deployment Net Promoter Score Semi-autonomous Teams T Usability Tests Search Se h Engine Marketing M keting Smoke Tests Real-time Monitoring Real-Time Alerting Customer Liaison Predictive Monitoring 36
  • 37. Thanks! • Startup Lessons Learned Blog – – In print: • Getting in touch (#leanstartup) – p – • Lean Startup Intensive at Web 2 0 Expo 2.0 May 3, 2010 in San Francisco – 37