LEAN Startups: a primerLearnEntrepreneurialAgilityNow!
a little about me?Norris Krueger, PhDrecovering tech entrepreneurPhD researcher in entrepreneurship(entrep ecosystems & entrep learning)global speaker (next up: Denmark, Cairo)Total lean startup fanboy! Norris.email@example.com@entrep_thinking, LinkedIn, Facebook, G+http://bit.ly/NKblog ; http://bit.ly/NKshortbio
the “Lean” movement• … just a few key names:• Eric Ries• Steve Blank• Dave McClure and other cool cats• …BUT… Is this really that new?• Isn’t this what smart entrepreneurs ALREADYdo? How smart entrepreneurs ALREADY think?• And how the best educators already work?
What is a “Startup”..really?• A startup is simply the vehicle for figuring out asustainable, repeatable, scalable business model• This is no time for a business plan… takes verydifferent planning (and thinking)• Finding your Scalable Business Model:– Test each critical assumption in your model– Measure (qual & quant) ruthlessly– “Pivot” quickly– Iterate
A few quick thoughts…• “Lean” doesn’t mean cheap.. It means FAST• “Lean” could just as easily be called “Learn”!WHEN to be Lean?• Extreme uncertainty• Significant ambiguity (Type III errors)• Startups – scalable startups• Social / Sustainable / BOTP• New Product Development
The Process• from Steve Blank: The search (SBM) we can call“Customer Development”• Implementing SBM = “Agile Development”
Minimize TOTAL time through the loopSource: Eric Ries,The Lean Startup
Build Measure Learn• BUILD: Identify & Test• Minimum Feature Set• Minimum Viable Product (MVP)• MEASURE:• Find out what customers love… and especially hate(Kathy Sierra vs Dave McClure)• LISTEN! (to your metrics & your customers)• LEARN:• Pivot quickly & decisively
• “Failing fast” is also a misnomer – “failFORWARD” which means…• Better your assumptions fail… than your biz• Disrupts the “Inventor Mentality” -forces attention on Value (benefits>>features)• Build Test/Measure Learn (L,R,R)Get Out of the *%^$#@ Building!
Venture formation starts with thesearch for a business modelWhat is a business model?describes how an organization rationalizes the way itcaptures, creates, and delivers valueWhy it is important?Clarifies the makeup and interlacing of fundamental elementsneeded by any organization: customers, offer,infrastructure, and financial viabilityHow is it developed?12Source: Osterwalder & Pigneur, 2010
What’s a Business Model?• Three key questions to answer – identify allkey assumptions for each:1) Value Proposition [what customer values]2) Value Delivery [how to make it happen]3) Value Capture [how to get paid](shall we get started??)
Quipu: online support platformwww.quipuapps.comPowerful new cloud-based platform forsupporting business model evolutionOther strategic analysis toolsUseful for starting a planUseful for developing your pitch(tell Mike Issa at Quipu that Norris sent you!)
for more info…The Lean Gurus & Key Links:• Eric Ries (@ericries,www.startuplessonslearned.com)• Steve Blank (@sgblank, www.steveblank.com)• Alex Osterwalder (@business_design)•Trevor Owens (Lean Startup Machine)GET STARTED HERE: www.slideshare.net/sblank/successful-entrepreneurship-1www.StartupWeekend.org• www.TechStars.org• www.gewusa.org; www.unleashingideas.org• www.ideatoproduct.org (Idea to Product)• Utah Foundry
One exercise:Get Out of the *%^$#@ Building!• Form pairs;• Group into sets of four pairs, numbered 1-4.• #1 is the Brilliant Entrepreneur• #2-#4 are Demanding Customers/Clients• #1 specifies product/service then makes plausibleassumption in each canvas category then...• In turn, asks #2, #3, #4 separately for feedback –>who give plausible but DISconfirming feedback• #1 pivots• (can integrate with “SRI” model)
Making opportunities happen:Causation & Effectuation29M1M2M3M4M5M1M2M3M4M5Given GoalGiven MeansGiven MeansImaginedEndsSource: Sarasvaty et al. 2005; Read et. Al 2010;Causation Logic Effectual Logic- Selecting between a given set of means to achieve apre-determined goal- Presumes a market’s existence and ample resourceand process availability- Begin with the end in mind & generate alternatives- Imagining new possible ends using an existing set ofmeans- No assumptions about a market’s existence- Starts with entrepreneur’s own knowledge, resources,networks, affordable loss, and goes from there