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Why Lean Startup changes everything


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The myth goes that the more perseverance, brilliance, good timing and a good product, the higher the chance for success. I will show you why exactly the opposite is true: Survival and, even more so, …

The myth goes that the more perseverance, brilliance, good timing and a good product, the higher the chance for success. I will show you why exactly the opposite is true: Survival and, even more so, success are highly correlated with the successful application of the “Build-Measure-Learn Feedback Loop”. The fact that this lean framework can be learned and taught is the final kill of the myth. I will give examples of how you can deliver more business value earlier and with less risks by testing everything as soon as possible using a so-called Minimum Viable Product.

The Agile Company Series
January 23, 2014, Afternoon and Early Evening
This is a free event. For registration:

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  • 1. Why Lean Startup changes everything Fredi Schmidli & Adrian von Orelli Agile_Company_Series Zürich, 23.1.2014 23.1.2014 1
  • 2. Adrian von Orelli Fredi Schmidli • Business Angel and Boardmember: • Entrepreneur • Community Builder: - - Agile Breakfasts 23.1.2014 • • • • EE PhD ETHZ R&D leader Innovator 15 years of high tech product development 2
  • 3. Your expectations? • ... ? • ... ? • ... ? 23.1.2014 3
  • 4. Collective experience? • Who heard about • Lean Manufacturing? • Scrum/Kanban? • Lean Startup? • Who worked with it? 23.1.2014 4
  • 5. What is a start up? A human institution designed to create new products and services under condition of extreme uncertainty (Eric Ries) A Start up is a temporary organization in search of a scalable, repeatable business model (Steve Blank) Business Model must be found before you run out of money >> Efficient searching required 23.1.2014 5
  • 6. Two ways to build a Startup 1. Plan then Execute (Conventional way) • Assumption: excellent plan and execution > success • Focus: do the things right / Perseverance myth • Business plan / Waterfall product innovation 2. Lean startup way • Assumption: Dynamic systems require self-organization and fast learning. • Focus: do the right things • Business Model Canvas / Agile product innovation 23.1.2014 6
  • 7. Feedback loop Hypothesis verified by experiment, facts based approach Pivot or persevere? weeks not years Turn hypothesis in ...... Minimum viable Product (MVP) Innovation accounting 23.1.2014 7
  • 8. Lean is … a company culture touching all aspects: Values, Leadership, Employee Development, Empowerment, Performance, Accountability, … not a collection of tools A culture can not be copied 23.1.2014 8
  • 9. Lean startup way Culture: Embrace to learn core aspects every day to master condition of extreme uncertainty Pre-requisites: Transparency, trust and courage Method: Choose right metric, learn fast by using short feedback loop, agile development Goal: MVP asap / minimize cycle time to learn fast Characteristics: Handle all nine dimensions of Business Model Canvas Every relevant business aspect is verified by an experiment 23.1.2014 9
  • 10. Lean EcoSystem Classic Lean Management Lean EcoSystem Invented by Toyota after WW2 Lean Startup Blank /Ries /Osterwalder 5 years old Maximize efficiency under “stable” conditions Failed in the creative field Maximize innovation efficiency under extreme uncertainty Focus on continuous improvement and execution excellence Agile development (not waterfall) customer development (not market research) It took 50+ years until agile SW development methods finally started to successfully combine innovation with lean management principles 23.1.2014 10
  • 11. Lean Startup Components Apply scientific method to validate customer and business assumptions. Docu with BM canvas Customer discovery Customer validation Customer creation Company building “Eric Ries” Lean Startup Agile Development Short cycle time MVP learn fast Innovation accounting growth engine types Validate assumptions pivot or persevere choose relevant metric sticky, viral, paid “Alexander Osterwalder” Consider all nine business dimensions Tackle highest risks first Common language to talk about business “Steve Blank” Customer Development opposed to market research Lean Startup Components Business Model Generation 23.1.2014 11
  • 12. Lean Startup in a Nutshell: A Startup which combines fast, iterative development methodologies with customer development principles (Brant Cooper) 23.1.2014 12
  • 13. Minimal Viable Product (Wikipedia) The minimum viable product is that version of a new product which allows a team to collect the maximum amount of validated learning about customers with the least effort. (Eric Ries) An MVP is not a minimal product, it is a strategy and process directed toward making and selling a product to customers. 23.1.2014 13
  • 14. Examples of MVP 4. Test vision of service offering for Dropbox 23.1.2014 14
  • 15. Exercise (5 minutes) Define the MVP for your current product idea Hint: • Where is your largest risk? • What do you want to learn with your MPV? • What metric will you measure? 23.1.2014 15
  • 16. Examples 5. Test business model for Drone based imaging system MVP: Rent camera and plane instead of building a drone 23.1.2014 16
  • 17. Examples 3. Test vision for flat TV MVP From Tom Kelly „the ten faces of innovation“ 23.1.2014 17
  • 18. Customer Development 23.1.2014 18
  • 19. More information HBS article „Why lean start up changes everything“ Steve lank: “Startup Owners Manual” Eric Ries: „Lean start up“ Alexander Osterwalder: “Business Model Generation” Brant Cooper: “Entrepreneurs Guide to Customer Development” 23.1.2014 19
  • 20. Expectations met? • Yes? • Somehow? • No? 23.1.2014 20
  • 21. Contact Information Fredi Schmidli Adrian von Orelli 23.1.2014 21