Lean Startup in 1 Hour

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An overview to the Lean Startup methodology and Lean Canvas tool, meant for an audience with little previous exposure to entrepreneurism or strategic project development. This overview can be provided …

An overview to the Lean Startup methodology and Lean Canvas tool, meant for an audience with little previous exposure to entrepreneurism or strategic project development. This overview can be provided in a 1-hour time slot, then follow-up can happen with an extended Lean Startup workshop or consulting session.

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  • 1. LeanStartup Roadmap Matt Rutter CCI Gagauzia
  • 2. Matt Rutter CCI Gagauzia Small Enterprise Advisor matt@mattrutter.com
  • 3. Entrepreneurial
  • 4. The reason most startups fail is not because they build a bad product, it’s that they build a product nobody needs. -Eric Ries
  • 5. “A startup is not a ‘doll house’ version of a large company.” - Eric Ries
  • 6. What is а “Lean Startup?” • “Startup” – a temporary organization designed to search for a repeatable and scalable business model. • Tradition – Write and Execute – Assumptions – Static (Unchanging) • Lean – Model and Test – Customer Development – Agile (Iteration, Pivots))
  • 7. “Startups that succeed are those that manage to iterate enough times before running out of resources.” - Eric Ries
  • 8. Eric Ries, The Lean Startup
  • 9. LeanStartup Roadmap • Idea – Problem Interviews – Market Research
  • 10. Need TalentInterest
  • 11. IDEA Customer/Problem Fit Determine if the problem exists and is worth solving • Problem Interviews • Market Research
  • 12. Customers care about their problems – not your solution. IDEA - Dave McClure
  • 13. Problem Interview Goal: To understand… 1. What is the problem? Why is it a problem? 2. Who has the problem? 3. How do they currently solve the problem? Ash Maurya, Running Lean 81
  • 14. Problem Interview • Example Script 1. What’s the hardest part about [problem context]? 2. Can you tell me about the last time that happened? 3. Why was that hard? 4. What, if anything, have you done to solve that problem? 5. What don’t you love about the solutions you’ve tried? Justin Wilcox – How I Interview Customers http://customerdevlabs.com/2013/11/05/how-i-interview-customers/
  • 15. Market Research • What current solutions/alternatives exist? – Cost – Function – Revenue model • What barriers to entry exist? • Is this a rising or dying trend? Resources: – google.com/trends, google.com/think – entrepreneur.com/businessideas/index.html – hbr.org, forbes.com, wsj.com, techcrunch.com
  • 16. LeanStartup Roadmap • Idea – Problem Interviews – Market Research • Model – Lean Canvas – Solution Interviews
  • 17. MODEL Problem/Solution Fit Determine if your model solves the problem • Lean Canvas • Solution Interviews
  • 18. Why Lean Canvas? • Fast • Concise • Dynamic
  • 19. “Your Product is not The Product” - Ash Maurya
  • 20. A business model describes the rational of how an organization creates, delivers, and captures value. -Alex Osterwalder, Business Model Generation
  • 21. Customer Segments • The specific group of people or organizations a business intends to serve. – Who has the problem? – For whom are we creating value? – Who must we sell to or make happy? • Early Adopters: The characteristics of the first group of people who will purchase your product. • Sketch: – Title – Age – Family Details – Income Level – Amount of Free Time – Location – Their Values/Morals – Social Groups – Professional Associations – Hobbies – Where They Shop
  • 22. Problems • The top 1-3 problems your Customer Segments need solved. – What problem are we curing? – How strong is this problem? – Will the customer pay to have this problem removed? • Existing Alternatives: How the problem is currently solved by the Customer Segments. • Sketch: – Frequency – Expense – Awareness – Reaction – Newness
  • 23. Solution • The minimum activities or features needed to solve the Customer Segments’ top 1-3 Problems. – Outline a feature set to solve each problem (description of your product or service) – Only include what is necessary (according to Solution Interviews) • Sketch: – How problem is solved – Time needed for solution – Resources needed – Partners needed
  • 24. Unique Value Proposition • A clear and short message stating the business’ unique Solution to the Customer Segments’ Problem. – The value you create for the Customer Segment – How are you improving the lives of our customers? – How are you different? • High-Level Concept: Brief relation of your UVP to something commonly understood (i.e. ВКонтакте: “Facebook for Russians”). • Sketch: – How your solution relates to the customer’s #1 problem – Finished story benefit of purchasing your product – How the solution will make your customer feel Note: The UVP represents the emotional trigger that will convince your customer to purchase your product/service
  • 25. Channels 1. Product: How a company delivers its Value Proposition to the Customer Segments. 2. Marketing: How a company attracts the interest of its Customer Segments. • Customer Relationship – The closeness and frequency of the relationship developed with the Customer Segments. • Sketch: – How will you deliver your solution? – How will your customer make a purchase? – How will you find your first 10 paying customers? – What is the most resource efficient way to attract Early Adopters?
  • 26. Revenue Streams • The various income- generating activities of a business. – Customer Segment paying money to receive the business’ Value Proposition – Charge as early as the customer will permit – Determine price based on the value you add, not the cost of production • Sketch: – For what features will the customer pay? – What features will be free? – How will you position your business against alternative solutions? – Are you adding value to non-customers who would be willing to pay?
  • 27. Cost Structure • All operational expenses of running your business. • Sketch: – Immediate fixed costs – Immediate variable costs (including your labor) – Break-even point
  • 28. Key Metrics • The 3-5 indicators of a business’ health (success). – How you track your customer’s behavior and preferences – Monitoring the implementation of your business’ key activities – Informs a business whether or not it needs to pivot/iterate • Sketch: – Customer Segment Awareness – New Customer Acquisition – Inventory Turnover – Time Needed to Complete Job – On-Time Payments – Customer Retention – Customer Referral
  • 29. Unfair Advantage • The features of your business that are difficult for competitors to copy or buy. – What keeps new competitors from taking your customers? – If someone “steals” your idea, how will you continue to exist? • Sketch: – Current advantages (often based on existing relationships or networks) – Advantages your business could develop over time – Note: passion, existing resources, and being “first to market” are not sustainable competitive advantages.
  • 30. MODEL • Lean Canvas • Solution Interviews – Return to the earlier interviewees and propose the Solution and UVP you sketched • Do you have the right feature set? – Discuss your business model (the interaction of all 9 boxes) with mentors or fellow entrepreneurs • Do you have a realistic path to profit?
  • 31. LeanStartup Roadmap • Idea – Problem Interviews – Market Research • Model – Lean Canvas – Solution Interviews • Test – MVP – Early Adopter Sales
  • 32. TEST Solution/Product Fit Determine how to effectively offer your solution in a minimal product • Minimal Viable Product (MVP) • Early Adopter Sales
  • 33. Minimum Viable Product
  • 34. Minimum Viable Product • Strategy used for fast and qualitative market testing of a product or product feature • The most resource-efficient (time, money, energy) method of creating and capturing value from the Customer Segment – MUST solve the problem of customer – Should not require a loan or long timeframe
  • 35. Early Adopter Sales • Begin selling to very specific Customer Segment (10-15 people) • Learn which features are “must-have” and which are unnecessary • Determine price point – High enough the customer must contemplate the purchase, low enough the customer will buy Goal: Validate business model not # of sales
  • 36. LeanStartup Roadmap • Idea – Problem Interviews – Market Research • Model – Lean Canvas – Solution Interviews • Test – MVP – Early Adopter Sales • Scale – Product 1.0 Launch – Business Plan – Investors
  • 37. SCALE Product/Market Fit Determine if your product will attract demand from regional / national / international markets • Product 1.0 Launch • Business Plan • Investors
  • 38. What is Success? Know the impact you wish to make in the world and scale accordingly.
  • 39. Discussion Matt Rutter Entrepreneurial Development Consultant Chamber of Commerce and Industry of Gagauzia +(373) 60 735 102 matt@mattrutter.com Skype: matthewlrutter