How Do You Know You Are Learning? Lean Startup and Innovation Accounting

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How do you know you are learning? That’s the question that faces many an entrepreneur — not just to measure his or her own progress, but to continually justify the venture’s existence to investors (at …

How do you know you are learning? That’s the question that faces many an entrepreneur — not just to measure his or her own progress, but to continually justify the venture’s existence to investors (at a startup) or to management (at established companies). The people who invest time, money, and resources into your idea are probably going to have to wait a long time to see a return on their investment. But they still need to know that things are moving in the right direction.

This is where innovation accounting comes in. It’s a core part of the Lean Startup framework described in the book by Eric Ries. But how exactly do you implement this concept?

As a lean startup coach, Brian Gladstein has helped dozens of companies establish their go-to-market plan and get new products off the ground quickly. In this webcast, he will review some common approaches to Innovation Accounting, introduce some templates and spreadsheets that can help you build your method, and provide some pointers to building a culture that fosters innovation and rewards learning.

In this webcast, we will

- Review what Innovation Account is, and how it fits into Lean Startup practices
- Show some examples of innovation accounting
- Discuss what you need to think about when implementing your own innovation account framework
- Demonstrate some basic innovation account tools

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Transcript

  • 1. Living Lean Startup:Innovation Accounting @explorics Aggressive Market Testing Lean Startup Coaching
  • 2. @exploricswww.explorics.com@briangladsteinbg@explorics.com
  • 3. how do we know we arelearning?
  • 4. innovationaccountingTurn leap-of-faithassumptionsinto aquantitativefinancial model
  • 5. missing the point!Innovation accounting sounds good–butaccounting is accounting.Standard accounting simply needs to beinterpreted differently for early-stageventures, not ignored or deemed irrelevant. http://www.inc.com/jon-burgstone/flaws-in-the-lean-start-up.html
  • 6. it’s NOT financial accounting it IS quantified learning
  • 7. 3 learning milestones1. Build a Minimal Viable Product (MVP) to establish real data on the assumption that you require to be tested. This is your baseline.2. Use experiments to tune your “engine” from the baseline to the stated ideal.3. Review progress toward the stated ideal and decide to either pivot (change direction) or persevere.
  • 8. getting practical
  • 9. 3 variables, 3 unknowns Channel & Message Target Growth Customer & leap-of-faith Pain Point Value Compellingleap-of-faith Offer
  • 10. • It doesn’t need to be product.get your MVP as “M” as it can get
  • 11. your dashboard leaps of faithpipeline
  • 12. we believe that…(hypothesis tracking)
  • 13. Write code to answer ahypothesis, not toproductize an idea.
  • 14. welcome to pirate metricsA ACQUISITION How do users find you?A ACTIVATION Do users sign up & have a great experience?R RETENTION Do users come back?R REFERRAL Do users tell others?R REVENUE How do you make money?
  • 15. defining your own pirate metrics Metric to trackA ACQUISITION meaningful phone conversation or visit the download page for offerA ACTIVATION 1. 2. fill out the form successfully download and installR RETENTION logs in 2x per week after 1 monthR REFERRAL share a positive experience through forum or directly refer a friendR REVENUE convert to paid
  • 16. the human element executives go-to-market project marketing sponsors Meet daily (or every other day) customer engineering relations tech support What did we try? What did we learn?What should we try next?
  • 17. Thank you!Follow Us! Questions?explorics.com/blog @briangladstein @exploricsUpcoming Webcasts www.explorics.comexplorics.com/upcoming-webcastsThursday 6/21, 2pm ETGreat Apps For MeasuringCustomer EngagementThursday 7/12, 2pm ETLiving Lean Startup:Pirate Metrics (AARRR)