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What Is A Startup?• A startup is a human institution designed todeliver a new product or service underconditions of extreme uncertainty• Nothing to do with size of company, sectorof the economy, or industry
Entrepreneurship ismanagement• Goal is create an institution, not just aproduct• Traditional management practices fail• Need practices & principles geared to thestartup context of extreme uncertainty
Achieving Failure• If we are building something nobody wants,what does it matter if we accomplish it:• On Time?• On Budget?• With High Quality?• With Beautiful Design?• Achieving Failure = Successfully Executing ABad Plan
The Lean Revolution“The customer is the most important part of the production line.” - DemingW. Edwards Deming(1900 – 1993)Taiichi Ohno(1912 – 1990)
Lean Startup MythsMyth #1Lean means cheap. Lean startups try to spendas little money as possible.TruthThe Lean Startup method is not about cost.It is about speed.
Lean Startup MythsMyth #2The Lean Startup is only for Web2.0/Internet/Consumer software companies.TruthThe Lean Startup applies to all companies thatface uncertainty about what customers willwant.
Lean Startup MythsMyth #3Lean Startups are small bootstrapped startups.TruthLean Startups are ambitious and are able todeploy large amounts of capital.
Lean Startup MythsMyth #4Lean Startups replace vision with data orcustomer feedback.TruthLean Startups are driven by a compelling visionand are rigorous about testing each element ofthis vision.
Minimum Viable Product• The minimum set of features needed tolearn from earlyvangelists• Earlyvangelists – visionary early adopters• Avoid building products that nobody wants• Maximize the learning per amount of money spent• Probably much more minimum than youthink
Minimum Viable Product• Visionary customers can “fill in the gaps” onmissing features, if the product solves a realproblem• Allows us to achieve a big vision in smallincrements without going in circles• Requires a commitment to iteration
Fears• False negative: customers would have likedthe full product, but the MVP sucks, so weabandoned the vision• Visionary complex: but customers don’tknow what they want• Too busy to learn: it would be faster to justbuild it right, all this measuring distractsfrom delighting customers
The AAAs of Metrics• Actionable• Accessible• Auditable
Innovation Accounting1. Establish the baseline• Build a minimum viable product (MVP)• Measure how customers behave right now1. Tune the engine• Experiment to see if we can improve metricsfrom the baseline towards the ideal1. Pivot or Persevere• When experiments reach diminishing returns,it’s time to pivot
Five Whys• A technique for continuous improvement ofcompany process• Ask “why” five times when somethingunexpected happens• Behind every supposed technical problem isusually a human problem• Fix the cause, not just the symptom