vidarandersen.com
Lean Startup,
Customer Development &
Business Model Generation
Startup Day - University of Cologne - Jun...
vidarandersen.com
I’m Vidar @blacktar Andersen
Norwegian living in Cologne, Germany
16+ years professional experience crea...
vidarandersen.com
I’ve Been Around :)
vidarandersen.com
PITCHCADEMY.COM
Andersen Dierick & Associates
I’ve Founded a Few
vidarandersen.com
What We Now Know
Startups vs Corporations - Search vs Execute
vidarandersen.com
BONUS MATERIAL!
Take this FREE and AWESOME course with Steve
Blank taught at Stanford, Berkeley and
Colo...
vidarandersen.com
vidarandersen.com
vidarandersen.com
Startup vs Corporation
So what’s the difference?
vidarandersen.com
A Startup is NOT a smaller
version of a large Company!
vidarandersen.com
So What’s a Startup?
A Definition
vidarandersen.com
vidarandersen.com
“A STARTUP is a
TEMPORARY organizatio
in SEARCH of a SCALABLE
and REPEATABLE
business model”
Everybody, ...
vidarandersen.com
“If you can take your
business plan to a bank
and not get laughed at
and thrown out,
you’re NOT a STARTU...
vidarandersen.com
Why is this Important?
Discussion
vidarandersen.com
Startup vs Company
SEARCH for business model VS EXECUTING business model
NOT a smaller version of a larg...
vidarandersen.com
Why Do Most Startups
#FAIL?
The Most Common Reasons
vidarandersen.com
Why do Startups #FAIL?
Co-Founders fight
Cannot build initial spec
No one will fund the idea
Too few peo...
vidarandersen.com
Business Model Generation
Instead of Business Plans
vidarandersen.com
“No Business Plan
Ever Survives First
Contact With a
Customer!”
- Steve Blank
vidarandersen.com
vidarandersen.com
vidarandersen.com
vidarandersen.com
vidarandersen.com
Business Model Generation
vs Business Plans
No business plans survive first contact with customers
Busin...
vidarandersen.com
Value Proposition
+
Customer Segment
=
Product-Market Fit
If you are only going to remember one thing, t...
vidarandersen.com
BMC Workshop
Model the BMC for the Nespresso Company
vidarandersen.com
vidarandersen.com
vidarandersen.com
Market Size & Competition
Are Both Missing from the Business Model Canvas - Do
vidarandersen.com
Market Size
• Total Available Market (TAM)
Theoretical total market size or
customer mass with problem
•...
vidarandersen.com
Competition
There is no such thing as “I have no competitors”
- Anything or anyone standing in between t...
vidarandersen.com
Customer Development
You ain’t a Lean Startup if you ain’t doing this
vidarandersen.com
The discovery process of validating the product-
market fit by conducting customer interviews
Requires y...
vidarandersen.com
CustDev Summary
A) Customer Discovery – Test the Problem
1. Define your hypothesis: map out your guesses...
vidarandersen.com
Customer Interviews
The Do’s and Don’ts of Customer Interviews
vidarandersen.com
Customer Discovery Interview
Dos & Don’ts
NO SELLING ALLOWED - EVER! Listen, listen, listen.
FREQUENCY -...
vidarandersen.com
We believe that people like ___ (customer type)_____
have a need for (or problems doing) ____ (need/
act...
vidarandersen.com
The Lean Process
The Lean Startup by Eric Ries
vidarandersen.com
Key Lean Concepts
Innovation Accounting:
Build a Minimal Viable Product, the minimal thing you need to h...
vidarandersen.com
The Pivot
A PIVOT is when you fundamentally change one
or more element(s) in your Business Model
Canvas
...
vidarandersen.com
vidarandersen.com
The Iteration Cycle
vidarandersen.com
What’s NEXT?
Five week, compressed Lean Launchpad program, 1 evening
meet-up per week:
http://swnext.co
...
vidarandersen.com
vidarandersen.com
Get Out Of The Building!
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Lean Startup 101

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My talk at Startup Day at University of Cologne June 29th 2013. CC Attribution-NonCommercial License: You must attribute Vidar Andersen as author and provide a link back to this original Slideshare page if you want to use this presentation.

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Lean Startup 101

  1. 1. vidarandersen.com Lean Startup, Customer Development & Business Model Generation Startup Day - University of Cologne - June 29th 2013 vidarandersen.com @blacktar
  2. 2. vidarandersen.com I’m Vidar @blacktar Andersen Norwegian living in Cologne, Germany 16+ years professional experience creating enterprise software for F500 and GOs Startup Founder (hits & misses) Corporate Entrepreneurship Consultant to F100 Corps Educator (SW NEXT Instructor, University Lecturer on Startup Entrepreneurship)
  3. 3. vidarandersen.com I’ve Been Around :)
  4. 4. vidarandersen.com PITCHCADEMY.COM Andersen Dierick & Associates I’ve Founded a Few
  5. 5. vidarandersen.com What We Now Know Startups vs Corporations - Search vs Execute
  6. 6. vidarandersen.com BONUS MATERIAL! Take this FREE and AWESOME course with Steve Blank taught at Stanford, Berkeley and Colombia https://www.udacity.com/course/ep245 (A much better investment of your time than reading this presentation!)
  7. 7. vidarandersen.com
  8. 8. vidarandersen.com
  9. 9. vidarandersen.com Startup vs Corporation So what’s the difference?
  10. 10. vidarandersen.com A Startup is NOT a smaller version of a large Company!
  11. 11. vidarandersen.com So What’s a Startup? A Definition
  12. 12. vidarandersen.com
  13. 13. vidarandersen.com “A STARTUP is a TEMPORARY organizatio in SEARCH of a SCALABLE and REPEATABLE business model” Everybody, Repeat After Me:
  14. 14. vidarandersen.com “If you can take your business plan to a bank and not get laughed at and thrown out, you’re NOT a STARTUP”
  15. 15. vidarandersen.com Why is this Important? Discussion
  16. 16. vidarandersen.com Startup vs Company SEARCH for business model VS EXECUTING business model NOT a smaller version of a large company Business Model Generation vs Business Plans & Forecasts Customer Development vs Product Development Agile Build-Measure-Learn vs Waterfall Model Organizational structures and roles are different
  17. 17. vidarandersen.com Why Do Most Startups #FAIL? The Most Common Reasons
  18. 18. vidarandersen.com Why do Startups #FAIL? Co-Founders fight Cannot build initial spec No one will fund the idea Too few people buy or use the product or service Premature scaling (scaling organization before product- market or problem-solution fit is properly validated)
  19. 19. vidarandersen.com Business Model Generation Instead of Business Plans
  20. 20. vidarandersen.com “No Business Plan Ever Survives First Contact With a Customer!” - Steve Blank
  21. 21. vidarandersen.com
  22. 22. vidarandersen.com
  23. 23. vidarandersen.com
  24. 24. vidarandersen.com
  25. 25. vidarandersen.com Business Model Generation vs Business Plans No business plans survive first contact with customers Business Plans are static faith-based monoliths Business Model Generation is a dynamic and iterative process to discover a fact-based repeatable and scalable business model The BMC is a COMMUNICATION TOOL to help you think, talk and share about your business model
  26. 26. vidarandersen.com Value Proposition + Customer Segment = Product-Market Fit If you are only going to remember one thing, this is it
  27. 27. vidarandersen.com BMC Workshop Model the BMC for the Nespresso Company
  28. 28. vidarandersen.com
  29. 29. vidarandersen.com
  30. 30. vidarandersen.com Market Size & Competition Are Both Missing from the Business Model Canvas - Do
  31. 31. vidarandersen.com Market Size • Total Available Market (TAM) Theoretical total market size or customer mass with problem • Serviceable Available Market (SAM) Theoretical total market size or customer mass that can use your solution • Serviceable Obtainable Market (SOM) Your target market cap or customer base for the next 2-3 years 20 TAM SAM SOM
  32. 32. vidarandersen.com Competition There is no such thing as “I have no competitors” - Anything or anyone standing in between the money and you is a competitor
  33. 33. vidarandersen.com Customer Development You ain’t a Lean Startup if you ain’t doing this
  34. 34. vidarandersen.com The discovery process of validating the product- market fit by conducting customer interviews Requires you to get out of the building and find the facts, because inside there’s only faith and opinions Customer Development
  35. 35. vidarandersen.com CustDev Summary A) Customer Discovery – Test the Problem 1. Define your hypothesis: map out your guesses about your business model using a Business Model Canvas as your communication and tracking tool 2. Test the problem you think you are solving by getting out of the building and talking to and listening to potential customers, partners and resources – real people B) Customer Validation – Test the Solution 1. Test the solution you think solves the problem to a known set of customers by building a minimum viable product (MVP) containing just the minimum features needed to allow you to start learning, to start an iterative build-measure-learn cycle 2. Iterate or pivot your business model repeating the steps until you have validated it Once you’ve validated your business model, you move on to the “execute” component which is also divided into two sub-parts, Customer Creation and Company Building, which consist of creating user demand and building the organization to scale.
  36. 36. vidarandersen.com Customer Interviews The Do’s and Don’ts of Customer Interviews
  37. 37. vidarandersen.com Customer Discovery Interview Dos & Don’ts NO SELLING ALLOWED - EVER! Listen, listen, listen. FREQUENCY - You need to do at least 15-20 customer interviews a week, 50-150 in total to notice meaningful patterns NO friends, colleagues or family - only real potential customers You MUST define pass/fail tests IN ADVANCE, results cannot just be anecdotes and after-the-fact feel-good fakery Your GOAL is: Test for the problem, not for the details
  38. 38. vidarandersen.com We believe that people like ___ (customer type)_____ have a need for (or problems doing) ____ (need/ action/behavior)___. We will know we have succeeded when ____(quantitative/measurable outcome)___, or _____(qualitative/observable outcome)__, which will contribute to ______(KPI)____. Test Criteria Example
  39. 39. vidarandersen.com The Lean Process The Lean Startup by Eric Ries
  40. 40. vidarandersen.com Key Lean Concepts Innovation Accounting: Build a Minimal Viable Product, the minimal thing you need to have to get real data, start validating learning and to start the build- measure-learn cycle Using metrics, measure the right and important things, not randomness. How do we know that the changes we’ve made are related to the results we’re seeing? Move the product from the baseline to the ideal, set a path to a sustainable product to reach a decision point Pivot or persevere? Continue doing the same or trying something else.
  41. 41. vidarandersen.com The Pivot A PIVOT is when you fundamentally change one or more element(s) in your Business Model Canvas It is NOT a minor change or iteration of existing element(s)
  42. 42. vidarandersen.com
  43. 43. vidarandersen.com The Iteration Cycle
  44. 44. vidarandersen.com What’s NEXT? Five week, compressed Lean Launchpad program, 1 evening meet-up per week: http://swnext.co “Flipped Classroom”, peer + mentor driven Steve Blank on tap, video lectures, books As taught at Stanford and Berkeley for fraction of cost!
  45. 45. vidarandersen.com vidarandersen.com Get Out Of The Building!
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