1. Copyright 2014 Cowan Publishing
The
Lean
Startup
Model

2. Copyright 2014 Cowan Publishing
ALEX COWAN!
AlexanderCowan.com!
@cowanSF
ABOUT ME
Entrepreneur (5x)!
Intrapreneur (1x)

3. Copyright 2014 Cowan Publishing
ALEX COWAN!
AlexanderCowan.com!
@cowanSF
ABOUT ME

4. Copyright 2014 Cowan Publishing
ALEX COWAN!
AlexanderCowan.com!
@cowanSF
ABOUT ME
www.alexandercowan.com

5. Copyright 2014 Cowan Publishing
ALEX COWAN!
AlexanderCowan.com!
@cowanSF
WHAT DRIVES VALUE HAS CHANGED
Then Now

6. Copyright 2014 Cowan Publishing
ALEX COWAN!
AlexanderCowan.com!
@cowanSF
THE ARITHMETIC IS THE SAME
Profit!
Drivers
Revenue!
Drivers
Tighter Proposition (website, pres., etc.)
Finite Cost
Finite Deliverables
Increased Use of Channels
Ease of Entry
Easy to See What's on MenuUpsell
Intellectual Property Multipliers
Tighter Talent Definition
Simpler Training, Eval., Promotion
Cost of Delivery
Cost!
Drivers
Less Consultative Selling
Simplified Contracting
Cost of Sales
Standard Project Management
Comparable Post Mortems
Engagement!
Management
(example: product-driven consulting)

7. Copyright 2014 Cowan Publishing
THE MIX OF BUSINESS TYPES HAS CHANGED
Infrastructure-Driven
UTILITIES TELECOM COMMODITIES
Scope-Driven
RETAIL BANKING CORP. LAW
Product-Driven
PACKAGED GOODS APP. SOFTWARE MEDIA

8. Copyright 2014 Cowan Publishing
OLD SCHOOL VS. NEW SCHOOL
How it
was done
How to
do it
$ !?
? ! ? ? ?

9. Copyright 2014 Cowan Publishing
THE STARTUP IS DIFFERENT
≠

10. Copyright 2014 Cowan Publishing
OLD SCHOOL VS. NEW SCHOOL
Output != Outcome
(not equal to)
Scaling != Learning
(not equal to)

11. Copyright 2014 Cowan Publishing
THINK SEE
FEEL DO
PERSONAS
Who?
X
PROBLEM!
SCENARIOS &
ALTERNATIVES
What?
VALUE
PROPOSITIONS
& ASSUMPTIONS
What if?
!
USER
STORIES &
PROTOTYPES
How?
Scale?
Pivot?
PRODUCT &
PROMOTION
/
CUSTOMER
DISCOVERY &
EXPERIMENTS
Tell me…?
APPLYING LEAN STARTUP

12. Copyright 2014 Cowan Publishing
ALEX COWAN!
AlexanderCowan.com!
@cowanSF
DISCOVERY & LEARNING: PERSONAS

13. Copyright 2014 Cowan Publishing
ALEX COWAN!
AlexanderCowan.com!
@cowanSF
DISCOVERY & LEARNING: PERSONAS

14. Copyright 2014 Cowan Publishing
NOT A GOOD PERSONA
• Women!
• Age 28-45!
• Has kids!
• Socialize with other mom’s!
• Online with Facebook!
• 86% said they’d like to be more
organized!
• 70% said they’d use an
application that organizes them

15. Copyright 2014 Cowan Publishing
• Women!
• Age 28-45!
• Has kids!
• Socialize with other mom’s!
• Online with Facebook!
• 86% said they’d like to be more
organized!
• 70% said they’d use an
application that organizes them
NOT A GOOD PERSONA
Bullet points are almost
never vivid or detailed
Stock photo- not real
This is a huge
population- not exact
These responses are ‘fake
actionable’- survey responses
like this are unreliable

16. Copyright 2014 Cowan Publishing
A BETTER PERSONA
Mary is a mom by choice. She had a successful career in accounting,
but welcomed the opportunity to be a stay at home mom. She loves it.
But it’s not like having kids purged her creative, social instincts. She
wants to connect, she wants to learn, she wants to interact. Being a
mom is a job and she wants to do it well. That means corresponding
with other mom’s on child education and keeping track of what works.
She posts to Facebook at least twice a week and responds to other
moms’ items more often than that. !
She has a few blogs and publications she reads regularly…
Mary the Mom

17. Copyright 2014 Cowan Publishing
A BETTER PERSONA
the use of a first name helps
w/ vividness (a little)
these full sentences look like a
good start towards something
vivid and detailed
this is a real photo of a
relevant person taken with an
iPhone in the real world
Mary is a mom by choice. She had a successful career in accounting,
but welcomed the opportunity to be a stay at home mom. She loves it.
But it’s not like having kids purged her creative, social instincts. She
wants to connect, she wants to learn, she wants to interact. Being a
mom is a job and she wants to do it well. That means corresponding
with other mom’s on child education and keeping track of what works.
She posts to Facebook at least twice a week and responds to other
moms’ items more often than that. !
She has a few blogs and publications she reads regularly…
Mary the Mom

18. Copyright 2014 Cowan Publishing
A DAY IN THE LIFE

19. Copyright 2014 Cowan Publishing
DISCOVERY & LEARNING: PROBLEM SCENARIOS
ALEX COWAN!
AlexanderCowan.com!
@cowanSF

20. Copyright 2014 Cowan Publishing
ALEX COWAN!
AlexanderCowan.com!
@cowanSF
XPROBLEM SCENARIO
DISCOVERY & LEARNING: PROBLEM SCENARIOS

21. Copyright 2014 Cowan Publishing
ALEX COWAN!
AlexanderCowan.com!
@cowanSF
XWhat job(s) are you doing for
the customer?
What existing need or
behavior are you fulfilling?
PROBLEM SCENARIO
DISCOVERY & LEARNING: PROBLEM SCENARIOS

22. Copyright 2014 Cowan Publishing
ALEX COWAN!
AlexanderCowan.com!
@cowanSF
?
X
ALTERNATIVE(S)
PROBLEM SCENARIO
DISCOVERY & LEARNING: PROBLEM SCENARIOS

23. Copyright 2014 Cowan Publishing
ALEX COWAN!
AlexanderCowan.com!
@cowanSF
?
X
If they currently use
spreadsheets, watch them
use it and get a copy of it.
If they currently put notes on the
family fridge, ask about it,
photograph it.
ALTERNATIVE(S)
PROBLEM SCENARIO
DISCOVERY & LEARNING: PROBLEM SCENARIOS

24. Copyright 2014 Cowan Publishing
ALEX COWAN!
AlexanderCowan.com!
@cowanSF
YOUR VALUE PROPOSITIONS
!
ALTERNATIVE(S)
?
PROBLEM SCENARIO
X
DISCOVERY & LEARNING: PROBLEM SCENARIOS

25. Copyright 2014 Cowan Publishing
ALEX COWAN!
AlexanderCowan.com!
@cowanSF
X
Are they better enough than the
alternative(s)?
!
?
YOUR VALUE PROPOSITIONS
ALTERNATIVE(S)
PROBLEM SCENARIO
DISCOVERY & LEARNING: PROBLEM SCENARIOS

26. Copyright 2014 Cowan Publishing
… and they have a certain
PROBLEMS(S) …
… where they’re currently using
certain ALTERNATIVE(S) …
… and I have a VALUE
PROPOSITION that’s better enough
than the alternatives to cause the
persona to act (purchase, use, etc.).
A certain PERSONA exists…
AND NOW THE PRODUCT HYPOTHESIS
!
?
X

27. Copyright 2014 Cowan Publishing
PLANNING
!5,000,000%
0%
5,000,000%
10,000,000%
15,000,000%
20,000,000%
25,000,000%
30,000,000%
35,000,000%
40,000,000%
45,000,000%
2012% 2013% 2014% 2015% 2016% 2017% 2018% 2019% 2020%
Revenue%
Expense%
EBITDA%
Five Year
Plan
Then
Lean
Now

28. Copyright 2014 Cowan Publishing
EXPERIMENTATION & VALIDATION
Do I have real evidence from my buyer
that this is compelling?
01 IDEA!
What are the key assumptions required
to make this business work?
02 HYPOTHESIS
How do I definitely prove or disprove the
assumptions with a minimum of time
and effort?
03 EXPERIMENTAL DESIGN
04 EXPERIMENTATIONAm I reacting or am I focused on
validating my pivotal assumptions?
‘Pivot or persevere?’

29. Copyright 2014 Cowan Publishing
ASSUMPTIONS
Priority Key Assumption Needs Proving? Experimentation
1
[A key assumption about the
business]
[Whether it needs
proving!
[Experiment to !
prove or disprove]
1
Parents want to organize the
distribution of allowances
with an app
Yes
* Post the proposition in ads
online!
* Measure sign-up’s on a landing
page
2
Parents want to link
allowances to chores
Yes
* Show prototypes with choices
* Test in beta
2 Parents have smart phones No n/a
Focus on strategic,
pivotal assumptions

30. Copyright 2014 Cowan Publishing
FOCUS AND THE LEAN STARTUP
Crossing t’s
Dotting i’s
Doesn’t matter unless it helps
prove (or disprove) your
pivotal assumptions

31. Copyright 2014 Cowan Publishing
CASE STUDY #1: DROPBOX
Startup looking to fund a better file sharing
product. !
!
Many existing direct competitors but few
have traction. !
!
Fairly involved cross-platform product
development project - substantial time and
money required.!
!
Youch.

32. Copyright 2014 Cowan Publishing
CASE STUDY #1: DROPBOX
Persona
Tom the Techie- early adopter who works on projects that require swapping a lot of files between a
shifting network of collaborators.
Problem
Scenario
It’s difficult to share files between a network of collaborators, particularly if they’re: big or numerous or
change a lot.
Alternatives
Many existing products, but none of them super compelling and widely adopted.!
Also, custom setup’s which work but are cumbersome to set up and maintain.
Value Prop.
A file sharing service that truly feels transparent to the user across all major platforms- OSX, iOS,
Windows, etc.
What Minimum Viable Product (MVP)? "
!
That you can bootstrap?"
!
That doesn’t require software at all?

33. Copyright 2014 Cowan Publishing
DROPBOX MVP & EXPERIMENTATION
Result: Excellent traction and
conversion to sign-up’s. Strong
validation signal.
Create a ‘Wizard of Oz’ demo
tailored for early market
(techies) and measure sign-
up’s.

34. Copyright 2014 Cowan Publishing
CASE STUDY #2: ZAPPOS
In the beginning, just a guy with an idea to
sell shoes online. !
!
At the time, online retail still nascent. !

35. Copyright 2014 Cowan Publishing
CASE STUDY #2: ZAPPOS
Persona Sam the shoe-hound- knows what he wants but not where to get it.
Problem
Scenario
Sam is unable to find the shoe he wants at local retailers, wasting time and getting frustrated.
Alternatives Possibly mail order or wait until he’s in a bigger market to go to the store.
Value Prop.
Make the shoe Sam wants accessible online and make sure he has a great experience so he’ll come
back and not have to think about where to find the shoe he wants anymore.
What Minimum Viable Product (MVP)? "
!
That you can bootstrap?"
!
That doesn’t require software at all?

36. Copyright 2014 Cowan Publishing
CASE STUDY #2: ZAPPOS
Result: It worked and the rest
is history.
Photographed shoes and put
them online to observe
whether anyone bought them.

37. Copyright 2014 Cowan Publishing
DEVELOPMENT
Waterfall
Then
Agile
Now

38. Copyright 2014 Cowan Publishing
AGILE & THE BEAUTY OF SMALL BATCHES
PERSONAS
PROBLEM SCENARIOS
STORIES
Epic Stories
Stories
Test Cases
“As a [persona],
I want to [do something]
so that I can [derive a benefit]”

39. Copyright 2014 Cowan Publishing
AGILE & THE BEAUTY OF SMALL BATCHES

40. Copyright 2014 Cowan Publishing
STAY ON PLAN AND HAVE A BUSINESS MODEL
This work is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported License. To view a copy of this license, visit http://
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(Cost Structure)
(Key
Partners)
(Key
Activities)
(Key
Resources)
(Revenue Streams)
(Customer
Relationships)
(Channels)
(Value
Propositions)
(Customer
Segments)

41. Copyright 2014 Cowan Publishing
FULL CIRCLE
!
PRODUCT &
PROMOTION
USER
STORIES &
PROTOTYPES
Did the implementation
deliver on the story?
/
CUSTOMER
DISCOVERY
&
EXPERIMENT
How did the
customer/user
react?
VALUE
PROPOSITIONS
& ASSUMPTIONS
!
Was the
implemented
story relevant to
the proposition?
X
PROBLEM"
SCENARIOS &
ALTERNATIVES
Is problem
relevant? Is the
proposition
better vs.
alternatives?
THINK SEE
FEEL DO
PERSONAS
Do we
understand this
person? What
makes them
tick?

42. Copyright 2014 Cowan Publishing
acowan@alexandercowan.com
@cowanSF
www.alexandercowan.com/venture-design
www.alexandercowan.com
www.alexandercowan.com/startup-sprints

43. Copyright 2014 Cowan Publishing
IMAGE CREDITS
FACTORY FLOOR
By Ministry of Information Photo Division Photographer [Public domain], via Wikimedia Commons
http://commons.wikimedia.org/wiki/File%3ABritain_Builds_Light_Cars-_the_British_Automobile_Industry%2C_UK%2C_1945_D26138.jpg
!
MUMBAI WOMAN
By Victorgrigas (Own work) [CC-BY-SA-3.0 (http://creativecommons.org/licenses/by-sa/3.0)], via Wikimedia Commons
http://commons.wikimedia.org/wiki/File:Mumbai_Woman_using_phone_November_2011_-9-3.jpg
!
SPOTIFY SLIDE
Spotify, Inc.