Lean 101                   @rafaelbalbijr//rafael@leanstartupmachine.comThursday, January 24, 13
About Me                   Rafael Balbi On twitter @rafaelbalbijr           •       Lean Startup Machine Director of Opera...
200 WORKSHOPS IN 2013       New York            Philadelphia    San Diego   Shanghai   Moscow      Riyadh       Boston    ...
Making Sh* HappenThursday, January 24, 13
Funded Startups                               Instacanvas                             Borrowmydog.gy                      ...
LET’S       ADVANCE THE       SCIENCE OF       ENTREPRENEURSHIPThursday, January 24, 13
Let’s break some ice  About Me//About YouThursday, January 24, 13
The	  AbyssThursday, January 24, 13
Lean  I will code  I will get funding,  I will write a business     planThursday, January 24, 13
Don’t be a super heroThursday, January 24, 13
There’s an easier way             A Startup, is a human institution designed to                 create and build new produ...
Lean is about...Thursday, January 24, 13
Experiment - An operation or procedure carried out in        order to discover and test            Planning - A detailed p...
Experimenting vs PlanningThursday, January 24, 13
Thursday, January 24, 13
What is “waste” in a startup?    •       Building the wrong thing    •       Pre-mature optimizationThursday, January 24, 13
Successful startups pivot   •       YouTube, Facebook, PayPal   •       Twitter, InstagramThursday, January 24, 13
Make data-driven decisions    • Increase team transparency    • Move fasterThursday, January 24, 13
Build//Measure//LearnThursday, January 24, 13
Some Context                                                                                                              ...
What a VC taught me..                    Concept Phase      Execution Phase    Value Prop//                               ...
Lean Business Models              Get to your first sale as quickly as possible!                              Break it! ->...
Build//Hypothesize                                    • What’s	  your	  idea/                                      problem...
Measure//Test                                 Customer Development -                                   Get out of the buil...
Learn//Iterate                                   Gain Knowledge                                   ImplementThursday, Janua...
Build//Measure//LearnThursday, January 24, 13
MVP  • The minimal amount of effort you have to exert to    complete one turn around the Build-Measure-    Learn loop. - E...
MVP      • MVP = Minimal Viable ExperimentThursday, January 24, 13
Goals of MVP  Maximize Learning  Minimize opportunity cost  Rapid Testing + IterationThursday, January 24, 13
Types of MVP Exploration Pitch ConciergeThursday, January 24, 13
Thursday, January 24, 13
Exploration             An interaction with customers             problems to understand behaviorThursday, January 24, 13
Pitch    Working	  towards	  a	  soluCon    Pitching	  the	  customer	  on	  a	  soluCon	  with	  the	  intent	  of	      ...
Pitch     1.	  Decreasing	  Discount     2.	  Meta     3.	  InnovatorThursday, January 24, 13
Thursday, January 24, 13
Thursday, January 24, 13
Concierge     Manually	  delivering	  on	  the	  soluCon     Minimal	  code,	  pulling+pushing	  levers     No	  automaCon...
Concierge     1.	  One	  use	  case     2.	  Real	  life	  simulaConThursday, January 24, 13
Customer	  DevelopmentThursday, January 24, 13
Customer Development is the process        by which we go out and test our          hypothesis and assumptionsThursday, Ja...
Customer Development…     1. Sucks…it hurts, a lot     2. Is the cornerstone and key of LEAN     3. Lot’s of Cust Dev Lead...
When	  is	  enough,	  enough?                           Look for a PatternThursday, January 24, 13
CUSTOMERThursday, January 24, 13
Persona Development                                                                                                       ...
Get Out of the Building                     “No business plan survives                    first contact with customers.”   ...
What’s the point?           •       Uncovers how users think and behave           •       Validates assumptions/removes bi...
It is NOT                    •      Multiple Choice Surveys                    •      Focus Groups                    •   ...
Effective InterviewingThursday, January 24, 13
Go in with 2 to 3 objectives                   and have a real conversation.                             Brant Cooper     ...
No Selling AllowedThursday, January 24, 13
3 Point Interview   1.	  Do	  You	  {insert	  problem}   2.	  Tell	  me	  a	  story	  about	  the	  last	  Cme	  you	  dea...
Track	  Data     • Write everything down RIGHT after     • Set up time to evaluate data     • Have one location where ever...
Validation   BoardThursday, January 24, 13
Thursday, January 24, 13
Thursday, January 24, 13
“A startup’s runway is the number          of pivots it can still make.”                                     -Eric RiesThu...
GOAL: Decrease Cash Spent          Between PivotsThursday, January 24, 13
GOAL: Decrease Cash Spent          Between Pivots         PRODUCT =         EXPERIMENTThursday, January 24, 13
GOAL: Decrease Cash Spent          Between Pivots                           PROGRESS =         PRODUCT =                  ...
Ok...so?Thursday, January 24, 13
What	  a	  VC	  taught	  me...              VC’s	  invest	  to	  get	  a	  return	  on	  $$$              -­‐want	  $	  ba...
Business Models                    Concept Phase                                Execution Phase    Value Prop//           ...
Ok...so?Thursday, January 24, 13
3D	  prinMng	  -­‐	  will	  do	  to	  hardware	  what	                  the	  internet	  did	  to	  soNware             Na...
leanstartupmachine.com                      validaMonboard.com                           rafael@leanstartupmachine.com    ...
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Lean 101

  1. 1. Lean 101 @rafaelbalbijr//rafael@leanstartupmachine.comThursday, January 24, 13
  2. 2. About Me Rafael Balbi On twitter @rafaelbalbijr • Lean Startup Machine Director of Operations • Helped a VC raised 5MM USD • Skillshare Master Teacher on Lean // Business Models • Founder of not 1 but 2 failed startupsThursday, January 24, 13
  3. 3. 200 WORKSHOPS IN 2013 New York Philadelphia San Diego Shanghai Moscow Riyadh Boston Los Angeles Toronto Karachi Tel Aviv Sao Paolo Chicago Washington DC Montreal Lahore Milan London Austin San Francisco Tokyo Dubai AmsterdamThursday, January 24, 13
  4. 4. Making Sh* HappenThursday, January 24, 13
  5. 5. Funded Startups Instacanvas Borrowmydog.gy Branch.comThursday, January 24, 13
  6. 6. LET’S ADVANCE THE SCIENCE OF ENTREPRENEURSHIPThursday, January 24, 13
  7. 7. Let’s break some ice About Me//About YouThursday, January 24, 13
  8. 8. The  AbyssThursday, January 24, 13
  9. 9. Lean I will code I will get funding, I will write a business planThursday, January 24, 13
  10. 10. Don’t be a super heroThursday, January 24, 13
  11. 11. There’s an easier way A Startup, is a human institution designed to create and build new products and services under conditions of extreme uncertainty… – Eric RiesThursday, January 24, 13
  12. 12. Lean is about...Thursday, January 24, 13
  13. 13. Experiment - An operation or procedure carried out in order to discover and test Planning - A detailed proposal for doing or achieving something.Thursday, January 24, 13
  14. 14. Experimenting vs PlanningThursday, January 24, 13
  15. 15. Thursday, January 24, 13
  16. 16. What is “waste” in a startup? • Building the wrong thing • Pre-mature optimizationThursday, January 24, 13
  17. 17. Successful startups pivot • YouTube, Facebook, PayPal • Twitter, InstagramThursday, January 24, 13
  18. 18. Make data-driven decisions • Increase team transparency • Move fasterThursday, January 24, 13
  19. 19. Build//Measure//LearnThursday, January 24, 13
  20. 20. Some Context Day Month Year No. Who are our Key Partners? What Key Activities do our Value Propositions require? What value do we deliver to the customer? What type of relationship does each of our Customer For whom are we creating value? Who are our key suppliers? Our Distribution Channels? Which one of our customer’s problems are we helping to solve? Segments expect us to establish and maintain with them? Who are our most important customers? Which Key Resources are we acquiring from partners? Customer Relationships? What bundles of products and services are we offering to each Customer Segment? Which ones have we established? Which Key Activities do partners perform? Revenue streams? Which customer needs are we satisfying? How are they integrated with the rest of our business model? How costly are they? What Key Resources do our Value Propositions require? Through which Channels do our Customer Segments Our Distribution Channels? Customer Relationships? want to be reached? Revenue Streams? How are we reaching them now? How are our Channels integrated? Which ones work best? Which ones are most cost-efficient? How are we integrating them with customer routines? What are the most important costs inherent in our business model? For what value are our customers really willing to pay? Which Key Resources are most expensive? For what do they currently pay? Which Key Activities are most expensive? How are they currently paying? How would they prefer to pay? How much does each Revenue Stream contribute to overall revenues? This work is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported License. To view a copy of this license, visit http://creativecommons.org/licenses/by-sa/3.0/ or send a letter to Creative Commons, 171 Second Street, Suite 300, San Francisco, California, 94105, USA.Thursday, January 24, 13
  21. 21. What a VC taught me.. Concept Phase Execution Phase Value Prop// //ManagementCustomer Segment// //SystemsThursday, January 24, 13
  22. 22. Lean Business Models Get to your first sale as quickly as possible! Break it! -> PushThursday, January 24, 13
  23. 23. Build//Hypothesize • What’s  your  idea/ problem  that  you  want   to  solve? • Customer? •Thursday, January 24, 13
  24. 24. Measure//Test Customer Development - Get out of the building Putting what we’ve built in front of peopleThursday, January 24, 13
  25. 25. Learn//Iterate Gain Knowledge ImplementThursday, January 24, 13
  26. 26. Build//Measure//LearnThursday, January 24, 13
  27. 27. MVP • The minimal amount of effort you have to exert to complete one turn around the Build-Measure- Learn loop. - Eric Ries • MVP ≠ functioning productThursday, January 24, 13
  28. 28. MVP • MVP = Minimal Viable ExperimentThursday, January 24, 13
  29. 29. Goals of MVP Maximize Learning Minimize opportunity cost Rapid Testing + IterationThursday, January 24, 13
  30. 30. Types of MVP Exploration Pitch ConciergeThursday, January 24, 13
  31. 31. Thursday, January 24, 13
  32. 32. Exploration An interaction with customers problems to understand behaviorThursday, January 24, 13
  33. 33. Pitch Working  towards  a  soluCon Pitching  the  customer  on  a  soluCon  with  the  intent  of   gaining  back  some  form  of  validaCon  (email  signup,  cash,   leGer  of  intent)Thursday, January 24, 13
  34. 34. Pitch 1.  Decreasing  Discount 2.  Meta 3.  InnovatorThursday, January 24, 13
  35. 35. Thursday, January 24, 13
  36. 36. Thursday, January 24, 13
  37. 37. Concierge Manually  delivering  on  the  soluCon Minimal  code,  pulling+pushing  levers No  automaConThursday, January 24, 13
  38. 38. Concierge 1.  One  use  case 2.  Real  life  simulaConThursday, January 24, 13
  39. 39. Customer  DevelopmentThursday, January 24, 13
  40. 40. Customer Development is the process by which we go out and test our hypothesis and assumptionsThursday, January 24, 13
  41. 41. Customer Development… 1. Sucks…it hurts, a lot 2. Is the cornerstone and key of LEAN 3. Lot’s of Cust Dev Leads to ResultsThursday, January 24, 13
  42. 42. When  is  enough,  enough? Look for a PatternThursday, January 24, 13
  43. 43. CUSTOMERThursday, January 24, 13
  44. 44. Persona Development Project Name: Team Leader Name: Experiment #: Person Pain Factual information State the problem you believe about your target customer. your target customers have, that your solution solves for. Behavior Goals Existing behavior they exhibit now, What goals are they trying to accomplish because they don’t have your solution. through the behavior, that your solution will do better?Thursday, January 24, 13
  45. 45. Get Out of the Building “No business plan survives first contact with customers.” - Steve BlankThursday, January 24, 13
  46. 46. What’s the point? • Uncovers how users think and behave • Validates assumptions/removes bias • Shows difference between intent and reality • Provides direction and data instead of opinion or speculation • Provides the ability to inform designThursday, January 24, 13
  47. 47. It is NOT • Multiple Choice Surveys • Focus Groups • Your Personal (Biased!) Experience • Conversations with FriendsThursday, January 24, 13
  48. 48. Effective InterviewingThursday, January 24, 13
  49. 49. Go in with 2 to 3 objectives and have a real conversation. Brant Cooper Know your goals and questions. Giff Constable Use a script. Ash MauryaThursday, January 24, 13
  50. 50. No Selling AllowedThursday, January 24, 13
  51. 51. 3 Point Interview 1.  Do  You  {insert  problem} 2.  Tell  me  a  story  about  the  last  Cme  you  dealt  with  {insert  problem} 3.  What’s  your  ideal  soluCon  for  {insert  problem}Thursday, January 24, 13
  52. 52. Track  Data • Write everything down RIGHT after • Set up time to evaluate data • Have one location where everything is storedThursday, January 24, 13
  53. 53. Validation BoardThursday, January 24, 13
  54. 54. Thursday, January 24, 13
  55. 55. Thursday, January 24, 13
  56. 56. “A startup’s runway is the number of pivots it can still make.” -Eric RiesThursday, January 24, 13
  57. 57. GOAL: Decrease Cash Spent Between PivotsThursday, January 24, 13
  58. 58. GOAL: Decrease Cash Spent Between Pivots PRODUCT = EXPERIMENTThursday, January 24, 13
  59. 59. GOAL: Decrease Cash Spent Between Pivots PROGRESS = PRODUCT = VALIDATED EXPERIMENT LEARNINGThursday, January 24, 13
  60. 60. Ok...so?Thursday, January 24, 13
  61. 61. What  a  VC  taught  me... VC’s  invest  to  get  a  return  on  $$$ -­‐want  $  back  w/  i* Raise  skillset...lessen  risk...raise   probability  of  fundingThursday, January 24, 13
  62. 62. Business Models Concept Phase Execution Phase Value Prop// //ManagementCustomer Segment// //Systems want  to  get  out  of  concept  phase  as  quickly  as   possible.  business  become  profitable  at  SCALEThursday, January 24, 13
  63. 63. Ok...so?Thursday, January 24, 13
  64. 64. 3D  prinMng  -­‐  will  do  to  hardware  what   the  internet  did  to  soNware Nanotech Singularity RoboMcs Africa/China/Brasil/IndiaThursday, January 24, 13
  65. 65. leanstartupmachine.com validaMonboard.com rafael@leanstartupmachine.com @rafaelbalbijr  Thursday, January 24, 13
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