Lean Startup - Dr. Tendayi Viki - BCS Kent Branch Event [AUDIO]

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  • Mark Zuckerberg,


  • 1. The lean start-up G. Tendayi Viki School of Psychology University of Kent twitter: @gtviki
  • 2. The Lean Thinkers
    • Steve Blank
    • ( http://steveblank.com/ )
    • Brant Copper & Patrick Vlaskovits
    • (http://market-by-numbers.com/ )
  • 3. The Lean Thinkers
    • Alexander Osterwalder
    • ( http://www.businessmodelgeneration.com/ )
    • Ash Maurya
    • http://www.ashmaurya.com/
  • 4. The Lean Thinkers
    • Eric Ries
    • ( http://www.startuplessonslearned.com )
  • 5. Entrepreneurship is a Great Calling
  • 6.  
  • 7.
    • Your Business Idea SUCKS
    • Your Start-Up Will Fail
    • p<.05
  • 8. At launch...
  • 9. Everybody Wants To Be…
  • 10. What is the Difference?
  • 11. The Difference Is….
    • Most start-ups fail because they don ’ t have a sustainable business model…
      • Building something nobody wants!
        • There is no amount of leadership, team work and marketing that can save a start-up selling stuff that nobody wants!
        • Engineers can sometimes can too focused on how cool their ideas/inventions are:
          • In a technological, rather than commercial sense
  • 12. The Difference Is…
      • Sometimes it is because of bad technology (only 10%).
        • But often there is no sustainable business model (90%).
  • 13. Most Websites on the Internet….
  • 14. Established Business vs. Start-Up
      • Known Problem
      • Known Solution
      • Known Customer.
      • Unknown Problem
      • Unknown Solution
      • Unknown Customer
    • Established Business
    • Start-Up
  • 15. A Start-up Is An Experiment
    • This means a start-up is an experiment:
      • The founders ’ vision is the hypothesis.
      • Validating this hypothesis is the task for a start-up.
      • The goal is to find a sustainable business model.
      • Only when the business model is validated, should money be invested in scaling the start-up.
  • 16. A Start-up Is An Experiment
    • In other words….
  • 17. A Start-up Is An Experiment
    • The business plan, in its conventional form is not a good idea for start-ups.
      • Remember, a Start-Up is:
        • Unknown problem, Unknown Solution, Unknown Customer.
      • So lets just call it what it is…
      • A Business Guess!
  • 18. A Start-up Is An Experiment
    • Interestingly, most start-ups follow the canonical product development model:
    • Build in stealth until the launch party!
    • Executing the business plan…
      • Achieving failure!
  • 19. Is there a better way?
      • Start-ups need different management principles from established businesses.
        • What if we made it explicit that your business idea is a guess?
        • Then developed a rigorous method for testing this.
    • This is what the Lean Startup is about:
      • It is a method for iterating from Plan A , to a plan that works .
  • 20. After Customer Development
  • 21. Customer Development
    • Document your Plan A
      • This is NOT a Business Plan.
      • It is a way to capture your businesses hypotheses.
        • Who are the customers, what problems do they have, what solution are you proposing?
        • What is the path to your customers, marketing channels, what is your revenue model and cost structure?
        • What key metrics are you going to use to measure success?
      • All these are hypotheses that will need to be tested and validated.
  • 22.  
  • 23.  
  • 24.  
  • 25.  
  • 26. Customer Development
    • You then systematically test this plan.
    • You have to leave the building.
      • The founders have to do this!
        • Some of us love coding too much!
          • Please just let me add one more feature!
  • 27.  
  • 28. Customer Development
      • 1) Problem/Solution Fit
      • Do you have a problem worth solving?
        • Before you build a product, first find out if there is sufficient pain in your customer base to make your business viable.
        • This is where you find out if people are going to want what you are proposing to build.
        • It is also a chance to discover a minimal feature set.
    • Nail the Pain!
  • 29. Crossing the Chasm (Moore, 1995)
  • 30.  
  • 31. Customer Development
      • 2a) Product/Market Fit
      • Have you built something people want?
        • Once you have a problem worth solving, you can start building the product.
        • You have to take this product, as you are building it , to customers for their feedback.
        • It is recommended that you build an MVP.
          • Not the bells and whistles version.
        • Nail the solution!!
  • 32. Customer Development
      • 2b) Product/Market Fit
        • This is the time to also test whether your path to customers is scalable.
        • This is also the point to test pricing, and actually ask customer to pay for the product.
        • Nail the go-to-market strategy
        • Nail the business model!
  • 33. Problems
    • Remember that at any point in customer development you might run into problems.
      • People don ’ t have the problem you were hypothesising.
      • People don ’ t like the solution you built.
      • People don ’ t want to pay for the solution you developed.
      • People use the product once and don ’ t come back.
  • 34. The Pivot
    • If you run into any of these problems you don ’ t quit!
    • Also don ’ t just persevere “ the plane into the ground ” .
    • You can do a PIVOT.
      • Keep one foot in what you have learnt and then change one other thing and test again!
      • This is why the companies that can run these tests quickly and get to a plan that works quickly, are more likely to succeed.
  • 35.  
  • 36. Challenging Myths
    • Hero myth:
      • Believing in your product can lead to failure.  
        • All too often, founders fall in love with their products or technology, ignore negative feedback from customers, and spend years building a product based on a vision that no one else shares.
        • Directly Quoted From:
        • Martin Zwilling, Forbes.com
        • http://ow.ly/6zlYL
  • 37. Challenging Myths
    • Process myth:
      • Why building a product leads to failure.  
        • Conventional wisdom is that after a great idea, the next steps are raise some money, build a product, then go sell the product.
        • This doesn ’ t work when attacking unknown problems with untested solutions.
        • Directly Quoted From:
        • Martin Zwilling, Forbes.com
        • http://ow.ly/6zlYL
  • 38. Challenging Myths
    • Money myth:
      • Why having too much money leads to failure.  
        • The old saying that “ it takes money to make money ” isn ’ t so simple.
        • Money allows entrepreneurs to execute a flawed business plan far too long, rather than stay focused on the market and adapt.
        • Directly Quoted From:
        • Martin Zwilling, Forbes.com
        • http://ow.ly/6zlYL
  • 39. What About Vision?
    • So are we saying vision is unnecessary?
    • Vision is actually critical…
      • Customers often don ’ t know what they what.
    • Entrepreneurship should be based on vision.
      • Don ’ t just ship and see what happens…
      • You must make explicit your initial assumptions.
    • But these have to be validated, before vast resources are poured into scaling.
  • 40. What About Vision?
    • Methods of validation should be business relevant.
      • Get customers to use the product and see what they struggle with.
        • It doesn ’ t have to be perfect before you show it to customers.
    • Avoid vanity metrics…
      • The number one test is get customers to start paying you for the solution.
        • This is when you find out if you really have a business!
  • 41. Designing Good Research
    • Implementing lean methodology is not simple/easy:
      • Design good research questions.
      • Analysing and interpreting data.
      • Choosing your pivots.
    • This is where I think social scientists can add value:
      • The School of Psychology has expertise on this.
        • Research Methods
        • Statistical Analyses
  • 42.  
  • 43.  
  • 44.  
  • 45.  
  • 46. Thank you! Q&A twitter: @gtviki
  • 47. The Places to Get More…
    • Steve Blank
    • ( http://steveblank.com/ )
    • Eric Ries
    • ( http://www.startuplessonslearned.com )
    • Ash Maurya
    • http://www.ashmaurya.com/
    • Brant Copper
    • (http://market-by-numbers.com/ )
    • Alexander Osterwalder
    • ( http://www.businessmodelgeneration.com/ )