Lean Startup presentation at Kellogg Entrepreneurship Conference
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Lean Startup presentation at Kellogg Entrepreneurship Conference

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I gave a Lean Startup presentation at Kellogg Entrepreneurship Conference on Wed May 25, 2011. It's an intro presentation so if you know lean well already, it's all review.

I gave a Lean Startup presentation at Kellogg Entrepreneurship Conference on Wed May 25, 2011. It's an intro presentation so if you know lean well already, it's all review.

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  • In particular, eliminate work that doesn’t create value (for Customers)\n\nWhat is the greatest source of waste in a startup? Innovation process or product development?\n\nBuilding something no one wants\n
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  • Mention the religious wars on lean methodology\n\nThis is about the Meta principles, not a checklist or cookie cutter formula\n
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  • Ask audience about how many of them are or were entrepreneurs, created new products etc.\n
  • Ask audience for reasons\n
  • They had no interest, thought it sucked, it was too expensive etc. etc.\n
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  • Hold up Kellogg brochure\n
  • No. So, why is that?\n
  • The capacity for vision (cough) combined with our bias for action (cough) makes innovators prone to jumping over knowledge gaps and running through indifference without even noticing.\n\nThat gets us in a lot of trouble.\n
  • The capacity for vision (cough) combined with our bias for action (cough) makes innovators prone to jumping over knowledge gaps and running through indifference without even noticing.\n\nThat gets us in a lot of trouble.\n
  • A startup is a human institution designed to deliver a new product or service under conditions of extreme uncertainty\n
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  • Tell John Boyd’s story of discovering patterns in aerial combat in Vietnam \n
  • Tell John Boyd’s story of discovering patterns in aerial combat in Vietnam \n
  • Tell John Boyd’s story of discovering patterns in aerial combat in Vietnam \n
  • Tell John Boyd’s story of discovering patterns in aerial combat in Vietnam \n
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  • What is Validated learning?\n
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  • The premise of the lean startup is simple: if we can reduce the time between these major iterations, we can increase the odds of success.\n
  • The premise of the lean startup is simple: if we can reduce the time between these major iterations, we can increase the odds of success.\n
  • The premise of the lean startup is simple: if we can reduce the time between these major iterations, we can increase the odds of success.\n
  • We knew these ideas were big when we saw this\n
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  • If we can reduce the time between pivots\n \n We can increase the odds of success\n \n Before we run out of money, support etc.\n \n Runway = # of iterations remaining\n
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  • Talk through stories and examples of using these tactics\n
  • Talk through stories and examples of using these tactics\n
  • Talk through stories and examples of using these tactics\n
  • Talk through stories and examples of using these tactics\n
  • Talk through stories and examples of using these tactics\n
  • Talk through stories and examples of using these tactics\n
  • Talk through stories and examples of using these tactics\n
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Lean Startup presentation at Kellogg Entrepreneurship Conference Lean Startup presentation at Kellogg Entrepreneurship Conference Presentation Transcript

  • Lean StartupsThe Manufacturing of Innovation
  • Who am I?john@blueleaf.com - @johnprendergast - About.Me/JohnPrendergast
  • Founder of Blueleaf.com Who am I?john@blueleaf.com - @johnprendergast - About.Me/JohnPrendergast
  • Founder of Blueleaf.com Board Member oneforty Who am I?john@blueleaf.com - @johnprendergast - About.Me/JohnPrendergast
  • Founder of Blueleaf.com Mentor at Techstars Board Member oneforty Who am I?john@blueleaf.com - @johnprendergast - About.Me/JohnPrendergast
  • Founder of Blueleaf.com Mentor at Techstars Board Member oneforty Who am I? One of the first Boston Chicken Franchiseesjohn@blueleaf.com - @johnprendergast - About.Me/JohnPrendergast
  • Founder of Blueleaf.com Mentor at Techstars Board Member oneforty Who am I? One of the first Boston Chicken FranchiseesProduct Management at a series of startups john@blueleaf.com - @johnprendergast - About.Me/JohnPrendergast
  • Founder of Blueleaf.com Mentor at Techstars Board Member oneforty Who am I? One of the first Boston Chicken FranchiseesProduct Management at a series of startups Investment Banker for Tech Cos john@blueleaf.com - @johnprendergast - About.Me/JohnPrendergast
  • Lean Startups
  • Name has caused confusion
  • Toyota Production System Lean Manufacturing
  • Minimize waste ... http-//www.flickr.com/photos/editor/172690560/sizes/l/in/photostream/.jpg
  • Not cheap or bootstrapped
  • Startups?
  • It’s where innovation happens
  • What is a startup?
  • What is a startup?• A startup is a human institution designed to deliver a new product or service under conditions of extreme uncertainty• Nothing to do with size of the company, sector of the economy or industry
  • Said Differently ...
  • Innovation
  • Innovation Manufacturing
  • Innovation ManufacturingRepeatable process for creating market accepted innovation
  • Innovation ManufacturingApply lean manufacturing principles and the scientific method to the process of innovation
  • Lean StartupsApply lean manufacturing principles and the scientific method to the process of innovation
  • CAUTION_http-//www.flickr.com/photos/32315759@N00/452776240/sizes/z/in/photostream/
  • Methodology Can’tReplace Judgement
  • Or Replace Vision
  • Why bother with this?
  • Source: Eric Ries
  • Most Innovations Fail Source: Eric Ries
  • It doesn’t need to be that way . . .
  • Why Do Startups Fail?
  • Lack of Customers
  • Question?
  • Does it make sense that we haveproduct development process ... Source: Steve Blank
  • ... but a not a Customer Development Process?
  • Entrepreneurial Superpowers
  • Vision / Delusional CapacityEntrepreneurial Superpowers
  • Vision / Delusional Capacity Bias for ActionEntrepreneurial Superpowers
  • Steve Blank Hypotheses• Entrepreneurs and Investors are generally executing on guesses• Startups aren’t small versions of large organizations• They are about learning/discovery, not execution• Need to surface hypotheses/assumptions and test against facts• However, the Facts Live Outside of the Building
  • Led to CustomerDevelopment Model Source: Steve Blank
  • Customer Development is at the Heart of Lean Startups
  • Surface Hypotheses & Test
  • Facts Live Outside of the Building
  • Separate Vision from Delusion
  • Customer Development
  • Eric Ries Extended Model• Steve realized the Problem was unknown,• Eric’s Insights • Given that the Solution is also unknown • Agile development needed to match Customer development speed
  • Built To Learn IDEAS LEARN BUILD DATA CODE MEASURE
  • John Boyd’s Insight IDEAS LEARN BUILD DATA CODE MEASURE
  • John Boyd’s InsightOODA Loop IDEAS LEARN BUILD DATA CODE MEASURE
  • John Boyd’s Insight OODA Loop IDEAS• Observe, Orient, Decide, Act LEARN BUILD DATA CODE MEASURE
  • John Boyd’s Insight OODA Loop IDEAS• Observe, Orient, Decide, Act LEARN BUILD• Depends on accurate external data DATA CODE MEASURE
  • John Boyd’s Insight OODA Loop IDEAS• Observe, Orient, Decide, Act LEARN BUILD• Depends on accurate external data DATA CODE MEASURE• Speed through the loop beats quality of iteration
  • Changes Context of Progress
  • Not About Working Big Plan
  • Progress =Validated Learning About Customers
  • Or we can accelerate into a brick wall
  • Changes scope ofdevelopment efforts
  • Changes scope of development efforts• Huge feature lists don’t make sense
  • Changes scope of development efforts• Huge feature lists don’t make sense
  • Changes scope of development efforts• Huge feature lists don’t make sense• Actual working product may not make sense
  • Changes scope of development efforts• Huge feature lists don’t make sense• Actual working product may not make sense
  • Changes scope of development efforts• Huge feature lists don’t make sense• Actual working product may not make sense• Create the smallest amount of “product” necessary to learn
  • Minimum Viable Product
  • Product / Market Fit“Do whatever is required to get to product/market fit. Including: changing out people, rewriting your product, moving into a different market, telling customers no when you don’t want to, telling customers yes when you don’t want to, raising that fourth round of highly dilutive venture capital —whatever is required.” — Marc Andreessen http://blog.pmarca.com/2007/06/the-pmarca-gu-2.html
  • Great Startups Adjust To Facts
  • The Pivot http://startuplessonslearned.blogspot.com/2009/06/pivot-dont-jump-to-new-vision.html
  • The Pivot• What do successful startups have in common? • They started out as digital cash for PDAs, but evolved into online payments for eBay. • They started building BASIC interpreters, but evolved into the worlds largest operating systems monopoly. • They were shocked to discover their online games company was actually a photo-sharing site. http://startuplessonslearned.blogspot.com/2009/06/pivot-dont-jump-to-new-vision.html
  • The Pivot• What do successful startups have in common? • They started out as digital cash for PDAs, but evolved into online payments for eBay. • They started building BASIC interpreters, but evolved into the worlds largest operating systems monopoly. • They were shocked to discover their online games company was actually a photo-sharing site. http://startuplessonslearned.blogspot.com/2009/06/pivot-dont-jump-to-new-vision.html
  • The Pivot• What do successful startups have in common? • They started out as digital cash for PDAs, but evolved into online payments for eBay. • They started building BASIC interpreters, but evolved into the worlds largest operating systems monopoly. • They were shocked to discover their online games company was actually a photo-sharing site.• Pivot: change directions but stay grounded in what we’ve learned. http://startuplessonslearned.blogspot.com/2009/06/pivot-dont-jump-to-new-vision.html
  • The Pivot PIVOTCARTOON_http-//www.newyorker.com/humor/issuecartoons/2010/04/26/cartoons_20100419#slide=2
  • On Pivots @dbinetti
  • On Pivots @dbinetti
  • On Pivots• Pivots are restatements of your business model; not synonymous with product change @dbinetti
  • On Pivots• Pivots are restatements of your business model; not synonymous with product change @dbinetti
  • On Pivots• Pivots are restatements of your business model; not synonymous with product change• Pivots are a consequence of learning about your business, not just your product @dbinetti
  • On Pivots• Pivots are restatements of your business model; not synonymous with product change• Pivots are a consequence of learning about your business, not just your product @dbinetti
  • On Pivots• Pivots are restatements of your business model; not synonymous with product change• Pivots are a consequence of learning about your business, not just your product• Pivots are vision-driven, not testing driven @dbinetti
  • Speed Wins ...
  • What about management process?
  • Leading & Managing Lean
  • Leading & Managing Lean• People don’t rally around experiments - “It’s the vision stupid”
  • Leading & Managing Lean• People don’t rally around experiments - “It’s the vision stupid”
  • Leading & Managing Lean• People don’t rally around experiments - “It’s the vision stupid”• Everything starts with vision then rigorously test against actual results
  • Leading & Managing Lean• People don’t rally around experiments - “It’s the vision stupid”• Everything starts with vision then rigorously test against actual results
  • Leading & Managing Lean• People don’t rally around experiments - “It’s the vision stupid”• Everything starts with vision then rigorously test against actual results• Optimize Total Time through the loop
  • Leading & Managing Lean• People don’t rally around experiments - “It’s the vision stupid”• Everything starts with vision then rigorously test against actual results• Optimize Total Time through the loop
  • Leading & Managing Lean• People don’t rally around experiments - “It’s the vision stupid”• Everything starts with vision then rigorously test against actual results• Optimize Total Time through the loop• Traditional management tools are not built for extreme uncertainty
  • Leading & Managing Lean• People don’t rally around experiments - “It’s the vision stupid”• Everything starts with vision then rigorously test against actual results• Optimize Total Time through the loop• Traditional management tools are not built for extreme uncertainty
  • Leading & Managing Lean• People don’t rally around experiments - “It’s the vision stupid”• Everything starts with vision then rigorously test against actual results• Optimize Total Time through the loop• Traditional management tools are not built for extreme uncertainty• Iteration speed is governed by speed of learning not “building”
  • Start with Vision and adjust
  • Unit Economics & Biz model NOT projections
  • Openness NOT command and control
  • Learning Can Be Scary
  • Innovation accounting
  • Innovation accounting• Establish the Baseline • Build the minimum viable product • Measure how customers behave right now
  • Innovation accounting• Establish the Baseline • Build the minimum viable product • Measure how customers behave right now
  • Innovation accounting• Establish the Baseline • Build the minimum viable product • Measure how customers behave right now• Tune the Engine • Experiment to move metrics from baseline to ideal
  • Innovation accounting• Establish the Baseline • Build the minimum viable product • Measure how customers behave right now• Tune the Engine • Experiment to move metrics from baseline to ideal
  • Innovation accounting• Establish the Baseline • Build the minimum viable product • Measure how customers behave right now• Tune the Engine • Experiment to move metrics from baseline to ideal• Pivot or persevere • When experiments reach diminishing returns some distance from goal
  • In Action - Stanford Lean Launchpad
  • Tactical fun with MVPs
  • Minimum Viable Product• Minimum set of features needed to learn from earlyvangelists - visionary early customers • Avoid building products that nobody wants • Max learning per $• Probably much more minimum than you think
  • Minimum Viable Product• Visionary customers can “fill in the gaps” on missing features, if the product solves a real problem• Allows us to achieve a big vision in small increments without going in circles• Requires a commitment to iteration• MVP is only for BIG VISION products; unnecessary for minimal products
  • Minimum Viable Product
  • Minimum Viable Product• Smoke testing with landing pages, adwords
  • Minimum Viable Product• Smoke testing with landing pages, adwords• SEM on $5 per day
  • Minimum Viable Product• Smoke testing with landing pages, adwords• SEM on $5 per day• In-product split testing
  • Minimum Viable Product• Smoke testing with landing pages, adwords• SEM on $5 per day• In-product split testing• Paper prototypes
  • Minimum Viable Product• Smoke testing with landing pages, adwords• SEM on $5 per day• In-product split testing• Paper prototypes• Keynote products
  • Minimum Viable Product• Smoke testing with landing pages, adwords• SEM on $5 per day• In-product split testing• Paper prototypes• Keynote products• Concierge tests
  • Minimum Viable Product• Smoke testing with landing pages, adwords• SEM on $5 per day• In-product split testing• Paper prototypes• Keynote products• Concierge tests• Cohort and Engagement
  • MVP Fears
  • MVP Fears• False negative: “customers would have liked the full product but the MVP sucks, so we abandoned the vision
  • MVP Fears• False negative: “customers would have liked the full product but the MVP sucks, so we abandoned the vision
  • MVP Fears• False negative: “customers would have liked the full product but the MVP sucks, so we abandoned the vision• Visionary complex “Customers don’t know what they want”
  • MVP Fears• False negative: “customers would have liked the full product but the MVP sucks, so we abandoned the vision• Visionary complex “Customers don’t know what they want”
  • MVP Fears• False negative: “customers would have liked the full product but the MVP sucks, so we abandoned the vision• Visionary complex “Customers don’t know what they want”• Too busy to learn: “it would be faster to just built it right, all this measuring distracts from delighting customers”
  • Lean Startup Principles
  • Lean Startup Principles• Innovation & Entrepreneurship is management
  • Lean Startup Principles• Innovation & Entrepreneurship is management
  • Lean Startup Principles• Innovation & Entrepreneurship is management• Validated Learning
  • Lean Startup Principles• Innovation & Entrepreneurship is management• Validated Learning
  • Lean Startup Principles• Innovation & Entrepreneurship is management• Validated Learning• Build - Measure - Learn
  • Lean Startup Principles• Innovation & Entrepreneurship is management• Validated Learning• Build - Measure - Learn
  • Lean Startup Principles• Innovation & Entrepreneurship is management• Validated Learning• Build - Measure - Learn• Speed through the loop beat quality
  • Lean Startup Principles• Innovation & Entrepreneurship is management• Validated Learning• Build - Measure - Learn• Speed through the loop beat quality
  • Lean Startup Principles• Innovation & Entrepreneurship is management• Validated Learning• Build - Measure - Learn• Speed through the loop beat quality• Innovation Accounting
  • People and Resources Textjohn@blueleaf.com - @johnprendergast - About.Me/JohnPrendergast
  • People and Resources• Steve Blank - www.steveblank.com, includes the Standford Lean Launchpad Text john@blueleaf.com - @johnprendergast - About.Me/JohnPrendergast
  • People and Resources• Steve Blank - www.steveblank.com, includes the Standford Lean Launchpad - Book: 4 Steps to the Epiphany Text john@blueleaf.com - @johnprendergast - About.Me/JohnPrendergast
  • People and Resources• Steve Blank - www.steveblank.com, includes the Standford Lean Launchpad - Book: 4 Steps to the Epiphany• Eric Ries - www.startuplessonslearned.com Text john@blueleaf.com - @johnprendergast - About.Me/JohnPrendergast
  • People and Resources• Steve Blank - www.steveblank.com, includes the Standford Lean Launchpad - Book: 4 Steps to the Epiphany• Eric Ries - www.startuplessonslearned.com - Book: The Lean Startup Text john@blueleaf.com - @johnprendergast - About.Me/JohnPrendergast
  • People and Resources• Steve Blank - www.steveblank.com, includes the Standford Lean Launchpad - Book: 4 Steps to the Epiphany• Eric Ries - www.startuplessonslearned.com - Book: The Lean Startup Text• Patrick Vlaskovits & Brant Cooper - Vlaskovits.com, market-by-numbers.com john@blueleaf.com - @johnprendergast - About.Me/JohnPrendergast
  • People and Resources• Steve Blank - www.steveblank.com, includes the Standford Lean Launchpad - Book: 4 Steps to the Epiphany• Eric Ries - www.startuplessonslearned.com - Book: The Lean Startup Text• Patrick Vlaskovits & Brant Cooper - Vlaskovits.com, market-by-numbers.com - The Entrepreneurs Guide to Customer Development john@blueleaf.com - @johnprendergast - About.Me/JohnPrendergast
  • People and Resources• Steve Blank - www.steveblank.com, includes the Standford Lean Launchpad - Book: 4 Steps to the Epiphany• Eric Ries - www.startuplessonslearned.com - Book: The Lean Startup Text• Patrick Vlaskovits & Brant Cooper - Vlaskovits.com, market-by-numbers.com - The Entrepreneurs Guide to Customer Development• Meetup.com, local Lean Startup Circle Meetups - ~20,000 members globally john@blueleaf.com - @johnprendergast - About.Me/JohnPrendergast
  • People and Resources• Steve Blank - www.steveblank.com, includes the Standford Lean Launchpad - Book: 4 Steps to the Epiphany• Eric Ries - www.startuplessonslearned.com - Book: The Lean Startup Text• Patrick Vlaskovits & Brant Cooper - Vlaskovits.com, market-by-numbers.com - The Entrepreneurs Guide to Customer Development• Meetup.com, local Lean Startup Circle Meetups - ~20,000 members globally http://lean-startup.meetup.com/ john@blueleaf.com - @johnprendergast - About.Me/JohnPrendergast
  • People and Resources• Steve Blank - www.steveblank.com, includes the Standford Lean Launchpad - Book: 4 Steps to the Epiphany• Eric Ries - www.startuplessonslearned.com - Book: The Lean Startup Text• Patrick Vlaskovits & Brant Cooper - Vlaskovits.com, market-by-numbers.com - The Entrepreneurs Guide to Customer Development• Meetup.com, local Lean Startup Circle Meetups - ~20,000 members globally http://lean-startup.meetup.com/• Lean Startup Circle online - ~4,000 members with active discussions john@blueleaf.com - @johnprendergast - About.Me/JohnPrendergast
  • People and Resources• Steve Blank - www.steveblank.com, includes the Standford Lean Launchpad - Book: 4 Steps to the Epiphany• Eric Ries - www.startuplessonslearned.com - Book: The Lean Startup Text• Patrick Vlaskovits & Brant Cooper - Vlaskovits.com, market-by-numbers.com - The Entrepreneurs Guide to Customer Development• Meetup.com, local Lean Startup Circle Meetups - ~20,000 members globally http://lean-startup.meetup.com/• Lean Startup Circle online - ~4,000 members with active discussions https://groups.google.com/group/lean-startup-circle john@blueleaf.com - @johnprendergast - About.Me/JohnPrendergast