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Results of the Lean Startup Research survey as one part of an Executive MBA master thesis in the area of early stage high-tech entrepreneurship. ...

Results of the Lean Startup Research survey as one part of an Executive MBA master thesis in the area of early stage high-tech entrepreneurship.
You can buy the complete thesis with all the results here: https://www.facebook.com/ideasenabled/app_190322544333196

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The Lean Startup Approach ... reviewed! The Lean Startup Approach ... reviewed! Presentation Transcript

  • The Lean Startup Research Project Results of the Lean Startup Approach surveyChristian Kählig – Executive MBA in Innovation and Business Creation (TUM, HHL, UC Berkeley) FACEBOOK: @ideasenabled -- LINKEDIN: http://de.linkedin.com/in/ckaehlig -- WEB: ideasenabled.com May 10, 2011
  • Preface • The following report contains elements of the research conducted as part of a three month Executive MBA master thesis with the following topic Facilitating Opportunity Development: Increasing Understanding of the Lean Startup Approach in Early Stage High-Tech Entrepreneurship • The focus of this presentation is on the Lean Startup Approach survey which did not strive for statistical significance but qualitative data. • The presentation is primarily designed to be read which is why it contains more text than recommended for an in-person presentation. • In case you are interested in the complete Lean Startup research results, please contact me via email.LS Approach Survey Results © Christian Kählig 2
  • Agenda Executive Summary Complete ResultsLS Approach Survey Results © Christian Kählig 3 View slide
  • The Lean Startup Approach survey was one of four data collectionmeans used to gather data about the Lean Startup phenomenon February 2011 March 2011 CW M T W T F S S M CW T W T F S S CW M T W T F S S CW M T W T F S S 8 21 22 23 24 25 26 27 28 9 1 2 3 4 5 6 10 7 8 9 10 11 12 13 11 14 15 16 17 18 19 20 Lean Startup Approach survey (web-based) Lean Startup Approach survey (web-based) n=78 (1) LSM-BO LSM post-event survey (web-based) LSM-BO LSM post-event survey (web-based) n=14 (2) Semi-structured interviews (via skype) Semi-structured interviews (via skype) Friday Saturday Sunday • Lean Startup briefing • 2nd checkpoint • Team work • Participant Pitches • Challenges & • Final presentation n=8 (3) • Team forming new tactics • Announcement of • 1st checkpoint • 3rd checkpoint winners Note: LSM-BO = Lean Startup Machine Boston; (1) 30 out of 78 responses were completely filled in; (2) 11 out of 14 responses were filled in by LSM Boston event participants; (3) 7 LSM-BO event participants, 1 LSM-BO event mentor;LS Approach Survey Results © Christian Kählig 4 View slide
  • Briefing The Lean Startup Approach survey was conducted between February 24th and March 16th 2011. A web-based SaaS was used to collect quantitative and qualitative data from former, current and prospective LSM participants interested in the Lean Startup Approach. 78 people participated in the survey – 40% filled in the questionnaire completely. The questionnaire was comprised of 10 mandatory and 18 optional questions and covered three main areas of interest: • Lean Startup methodology knowledge, experience and resources used • Startup development progress determination and metrics • Business model documentation The survey was announced in the LS circle group, the LSM Alumni group, the LSM Boston facebook fanpage and tweeted to current and former LSM event participants.LS Approach Survey Results © Christian Kählig 5
  • Executive Summary – Major Findings • The basic profile of all survey participants revealed 18 LSM Boston attendees and overall middle-aged, well- educated US citizens Participants’ • The majority declared extensive professional experience and considerable scalable startup experience profile • While many noted theoretical knowledge, only a few declared extensive practical experience with the Lean Startup methodology • “Question your assumptions” and “Talk to your customers” were the two most important LS principles in the eyes of the participants • At the same time, “Question your assumptions” was seen as most difficult to implement together with “Get out Lean Startup of the building” principles • Comparing the views of advanced and less LS experienced participants yielded notable differences only regarding iteration speed and pivoting • “Validate learning” appeared to be especially difficult to implement for less experienced LS practitioners • A notable third claimed to not document any business model related assumptions despite the stated Assumptions doc importance of Question your assumption Startup • Among the huge variety of elaborated startup development progress metrics, LS principles played a certain role but did not dominate development • Among the different customer interest measures, no clearly dominating theme could be identified progress and • Customer related metrics dominated the most important metrics of strategic decision making about the future metrics direction of the startup • Blogs and tweets of Eric Ries and Steve Blank were the two most frequently noted sources of expert Helpful information resources • Expert advice and local meetups were indicated as most helpful resources for startup and opportunity developmentLS Approach Survey Results © Christian Kählig 6
  • Executive Summary – Discussion • The principles “Question your assumptions”, “Getting out of the building” and “Talk to customers” were recognized as very important, but at the same time also stated as most difficult to implement. Furthermore, no additional principles were mentioned although – for example – Eric Ries mentions “Build-Measure-Learn” as a core principle on his upcoming book landing page. Given the fact that nearly half of the answers (18) came from LSM event participants, the choice of the more customer development related principles in the “most Lean Startup important” part might be related to the nature of the LSM event with its increased emphasis on the customer principles development part of the LS approach potentially causing some kind of bias. • None of the chosen top three principles are actually core LS principles, but rather subordinated tenets or principles belonging to the customer development (CD) model. A likely reason for that result could be that the demarcation between the LS Approach principles as such and the subordinated CD related tenets (or principles) is not strictly differentiated by the practitioners. • A notable third of the participants stated to not document any assumptions with regard to the proposed business model areas at all. Given the stated importance of related principles like “Question your assumptions” and “Pivot as necessary” where one changes direction but stays grounded in what was learned before actually gave reasons to expect a certain, pragmatic degree of model related assumption documentation and ultimately Assumptions doc a higher number of people stating that behavior. A possible explanation that the notion of documentation might have mistakenly evoked the business plan style of documentation – which was not the intention of course – has not been confirmed according to the email feedback of one case interviewee. • The fact that “value propositions” and “customer segments” were among the “most documented” assumptions was not a real surprise and is expected to be in line with other research findings. • Although a variety of approaches, metrics and tools were mentioned when it comes to startup development Startup progress measures and strategic decision making, yet the customer and its attributes appeared to take a central role given the different kind of noted elements. Additionally, not only quantitative, but also qualitative development and even hybrid measures were declared reflecting the variety of approaches and potentially the people’s progress and different mindsets (number-focused vs. people-focused). Only a few people directly referred to LS principles metrics and concepts like validated learning and pivoting which could be related to a lack of awareness, experience or acceptance as a valid means of progress measure.LS Approach Survey Results © Christian Kählig 7
  • Agenda Executive Summary Complete ResultsLS Approach Survey Results © Christian Kählig 8
  • Profile of the Survey participantsLS Approach Survey Results © Christian Kählig 9
  • The basic profile of all survey participants revealed 18 LSM Bostonattendees and overall middle-aged, well-educated US citizens Age n=28, one answ er only 11 11 4 2 16-24 25-34 35-49 50-64 Note. * Mandatory question. LSM Boston participants are highlighted in orange. Highest degree n=28, one answ er only 12 10 3 2 1 High school Professional degree Bachelors degree Masters degree Doctorate degree graduate or (e.g. MD, DDS, DVM, (e.g. BA, AB, BS) (e.g. MA, MS, MEng, (e.g. PhD, EdD) equivalent (e.g. LLB, JD) MEd, MSW, MBA) GED)LS Approach Survey Results © Christian Kählig 10
  • The majority declared extensive professional experience andconsiderable scalable startup experience Professional experience n=28, one answ er only # of scalabe startups (among first 5, > 6 months) n=29, one answ er only 17 10 10 7 6 3 2 2 0 1-2 years 3-5 years 6-10 years 11+ years 0 1 2-3 4-5 6+LS Approach Survey Results © Christian Kählig 11
  • While many noted theoretical knowledge, only a few declaredextensive practical experience with the Lean Startup methodology Breadth of practical Lean Startup knowledge * Depth of practical LS knowledge * n=41, one answ er only n=41, one answ er only 16 20 13 8 9 7 4 5 Not used in a project / Uesd in 2-4 projects / Used in 1 project / startup Used in more than 5 No integration into startup Little to some integration Advanced integration w ith Strong integration w ith startup yet startups projects / startups activities w ith startup activities startup activities almost all startup activitiesNote. * Mandatory question. Note. * Mandatory question. Degree of theoretical Lean Startup knowledge * n=41, one answ er only 15 14 6 6 None Read/know some of the Read/know all of the pre- Consider myself a Lean pre-event information event information Startup expertLS Approach Survey Results © Christian Kählig Note. * Mandatory question. 12
  • Most important and most difficult Lean Startup principlesLS Approach Survey Results © Christian Kählig 13
  • Question your assumptions and Talk to customers were the two mostimportant LS principles in the eyes of the participants Key Lean Startup principles in your view n=40, m ultiple answ ers possible Question your assumptions 73% Talk to customers 68% Get out of the building 60% Validate learning 58% Build minimum viable products 58% Iterate rapidly 53% Pivot as necessary 48% Avoid premature scaling 20% Another principle not listed 0%LS Approach Survey Results © Christian Kählig 14
  • At the same time, Question your assumptions was seen as most difficultto implement together with Get out of the building Most difficult Lean Startup principles to implement n=38, m ultiple answ ers possible Get out of the building 39% Question your assumptions 37% Validate learning 29% Build minimum viable products 26% Talk to customers 26% Pivot as necessary 21% Avoid premature scaling 13% Iterate rapidly 8% Another principle not listed 0%LS Approach Survey Results © Christian Kählig 15
  • Comparing the views of advanced and less LS experienced participantsyielded notable differences only regarding iteration speed and pivoting Lean Startup principles: most important (advanced/strong vs. little experience) n=14 (little experience), n=9 (advanced/strong experience) Most important - group advanced/strong experience Most important - group little experience Question your assumptions 78% 71% Talk to customers 78% 64% Build minimum viable products 67% 50% Iterate rapidly 67% 43% Pivot as necessary 67% 36% Get out of the building 56% 64% Validate learning 44% 64% Avoid premature scaling 11% 14%LS Approach Survey Results © Christian Kählig 16
  • Validate learning appeared to be especially difficult to implement forless experienced LS practitioners Lean Startup principles: most difficult (advanced/strong vs. little experience) n=14 (little experience), n=9 (advanced/strong experience) Most difficult - group advanced/strong experience Most difficult - group little experience Question your assumptions 56% 36% Talk to customers 56% 36% Build minimum viable products 22% 43% Iterate rapidly 22% 14% Pivot as necessary 22% 21% Get out of the building 22% 7% Validate learning 11% 43% Avoid premature scaling 0% 7%LS Approach Survey Results © Christian Kählig 17
  • Documentation of Business Model assumptionsLS Approach Survey Results © Christian Kählig 18
  • A notable third claimed to not document any business model relatedassumptions despite the stated importance of Question your assumption Documentation of business model related assumptions n=34, multiple answ ers possible Value propositions 53% Customer segments 53% Revenue streams 38% Cost structure 38% Key activities 35% I do not document them 32% Channels 26% Key resources 24% Customer relationships 24% Key partners 21%LS Approach Survey Results © Christian Kählig 19
  • Startup development progress, customer interest and metricsLS Approach Survey Results © Christian Kählig 20
  • Among the huge variety of elaborated startup development progressmetrics, LS principles played a certain role but did not dominate Determination or measures of startup development progress (n=29, sorted alphabetically) Categories Elements Classic project metrics roadmap milestones, assignments, working releases #, feedback (+/-), feedback conversion rate, health, value added, # of talks with important results, Customer metrics consider product must-have Lean startup principles validated learning, pivots, # of interviews before P/S fit, first MVP Products/Services metrics level of functionality, transactions per user Revenue metrics general, per customer, # of paying customers Self-assessment actionable steps, degree of focus, qualitiative Time/Cost metrics time and cost to deploy first minimum viable solution, time and cost for subsequent value-adds Tools dashboard, Pivotal Tracker Web(-related) metrics AARRR*, unique visitors, users, activity, bounces, unbounces, social media mentions Note. * AARRR is a term coined by Dave McClure and represents: acquisition, activation, retention, referral, revenue Note. Inductive category creation (Flick, 2009) was used to compile the categories and elements (sub-categories) above based on the participants‘ answers to the respective open-ended question.LS Approach Survey Results © Christian Kählig 21
  • Among the different customer interest measures, no clearly dominatingtheme could be identified Determination or measures of customer interest (n=26, sorted alphabetically) Categories Elements AARRR acquisition, activation, retention, referral, revenue Commitment willingness-to-use, -pay, -refer Conversion funnel, cost Interviews qualitative, face-to-face, phone, reaction, follow-ups, feedback quality, positive feedback, surveys Landing page traffic, activitiy, signups Problem significant pain solved, degree of disappointment in case product/service would disappear Note. Inductive category creation (Flick, 2009) was used to compile the categories and elements (sub-categories) above based on the participants‘ answers to the respective open-ended question.LS Approach Survey Results © Christian Kählig 22
  • Customer related metrics dominated the most important metrics ofstrategic decision making about the future direction of the startup Metrics for important strategic decisions about startup direction (n=27, sorted alphabetically) Categories Elements feedback, interest, passion, problem assumptions validation, scalable acquisition strategy, Customer willingness-to-pay, new per segment, actions vs. expectations, value recognition, types understanding, service cost, new adoption rate Learning pace market size, marketplace awareness, general funnel thinking, product/market fit, main area of Marketing and Sales growth Others business specific, assumed landscape in 6 months, meeting with stakeholders Product and Solution time and cost for first minimum viable solution, problem/solution fit Revenue/Profit general, early profit Strategic positioning change relative to customers and competitors User #, activity, signups, # of signups vs. users, conversion Note. Inductive category creation (Flick, 2009) was used to compile the categories and elements (sub-categories) above based on the participants‘ answers to the respective open-ended question.LS Approach Survey Results © Christian Kählig 23
  • Helpful ResourcesLS Approach Survey Results © Christian Kählig 24
  • Blogs and tweets of Eric Ries and Steve Blank were the two mostfrequently noted sources of expert information Expert blogs or tweets read by practitioners n=32, m ultiple answ ers possible Eric Ries 91% Steve Blank 88% Dave McClure 66% Ash Maurya 53% Patrick Vlaskovits 50% Brant Cooper 44% Sean Ellis 38% Alexander Osterwalder 28% Andrew Chen 6% Cindy Alvarez 6% Tor Gronsund 3% Nathan Furr 3% Tom Eisenmann 3% Trevor Owens 3% Jason Cohen 3% Neil Patel 3% Hiten Shah 3%LS Approach Survey Results © Christian Kählig 25
  • Expert advice and local meetups were indicated as most helpfulresources for startup and opportunity development Most helpful resources so far (n=23, sorted alphabetically) Categories Elements Expert advice blogs (14), books (10), lsc group (4), videos (2), tweets (1) Local meetups local lean startup meetups (3) Tools business model canvas (1) Note. Number of mentions in parantheses. Elements ordered from most to least frequent mentions. Note. Inductive category creation (Flick, 2009) was used to compile the categories and elements (sub-categories) above based on the participants‘ answers to the respective open-ended question.LS Approach Survey Results © Christian Kählig 26
  • Christian Kähligf: facebook.com/ideasenabledw: ideasenabled.coml: de.linkedin.com/in/ckaehlig … for your contribution to this research endeavor! LS Approach Survey Results © Christian Kählig 27