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2009 11 16 Web 2.0 Expo New York Workshop

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  • Transcript

    • 1. The Lean Startup:
      A disciplined approach to Imagining, Designing, and Building New Products
      Workshop Edition
      Eric Ries
      http://StartupLessonsLearned.com
    • 2. Most Startups Fail
    • 3. Most Startups Fail
    • 4. Most Startups Fail
    • 5. Most Startups Fail
      But it doesn’t have to be that way.
      We can do better.
      This talk is about how.
    • 6. 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 company, sector of the economy, or industry
    • 7. 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 world's 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
    • 8. Speed Wins
      if we can reduce the time between major iterations
      we can increase our odds of success
    • 9. A Tale of Two Startups
    • 10. Startup #1
    • 11. Stealth Startup Circa 2001
    • 12. All about the team
    • 13. A good plan?
      Start a company with a compelling long-term vision.
      Raise plenty of capital.
      Hire the absolute best and the brightest.
      Hire an experienced management team with tons of startup experience.
      Focus on quality.
      Build a world-class technology platform.
      Build buzz in the press and blogosphere.
    • 14. Achieving Failure
      Company failed utterly, $40MM and five years of pain.
      Crippled by “shadow beliefs” that destroyed the effort of all those smart people.
    • 15. Shadow Belief #1
      We know what customers want.
    • 16. Shadow Belief #2
      We can accurately predict the future.
    • 17. Shadow Belief #3
      Advancing the plan is progress.
    • 18. A good plan?
      Start a company with a compelling long-term vision.
      Raise plenty of capital.
      Hire the absolute best and the brightest.
      Hire an experienced management team with tons of startup experience.
      Focus on quality.
      Build a world-class technology platform.
      Build buzz in the press and blogosphere.
    • 19. Startup #2
    • 20. IMVU
       
    • 21. IMVU
       
    • 22. New plan
      Shipped in six months – a horribly buggy beta product
      Charged from day one
      Shipped multiple times a day (by 2008, on average 50 times a day)
      No PR, no launch
      Results 2009: profitable, revenue > $20MM
    • 23. Lean Startups Go Faster
      Commodity technology stack, highly leveraged (free/open source, user-generated content, SEM).
      Customer development – find out what customers want before you build it.
      Agile (lean) product development – but tuned to the startup condition.
    • 24. Customer Development
      • Continuous cycle of customer interaction
      • 25. Rapid hypothesis testing about market, pricing, customers, …
      • 26. Extreme low cost, low burn, tight focus
      • 27. Measurable gates for investors
      http://bit.ly/FourSteps
    • 28. Agile Product Development(A tale of two startups, revisited)
      • Principles drawn from Lean Manufacturing and Toyota Production System
      • 29. These examples are drawn from software startups, but increasingly:
      • 30. All products require software
      • 31. All companies are operating in a startup-like environment of extreme uncertainty
    • Traditional Product Development
      Unit of Progress: Advance to Next Stage
      Waterfall
      Requirements
      Specification
      Design
      Problem: known
      Solution: known
      Implementation
      Verification
      Maintenance
    • 32. Agile Product Development
      Unit of Progress: A line of Working Code
      “Product Owner” or in-house customer
      Problem: known
      Solution: unknown
    • 33. Product Development at Lean Startup
      Unit of Progress: Validated Learning About Customers ($$$)
      Customer Development
      Hypotheses,
      Experiments,
      Insights
      Problem: unknown
      Data,
      Feedback,
      Insights
      Solution: unknown
    • 34. Minimize TOTAL time through the loop
      IDEAS
      LEARN
      BUILD
      DATA
      CODE
      MEASURE
    • 35. There’s much more…
      IDEAS
      Code Faster
      Learn Faster
      BUILD
      LEARN
      Unit Tests
      Usability Tests
      Continuous Integration
      Incremental Deployment
      Free & Open-Source Components
      Cloud Computing
      Cluster Immune System
      Just-in-time Scalability
      Refactoring
      Developer Sandbox
      Minimum Viable Product
      Split Tests
      Customer Interviews
      Customer Development
      Five Whys Root Cause Analysis
      Customer Advisory Board
      Falsifiable Hypotheses
      Product Owner Accountability
      Customer Archetypes
      Cross-functional Teams
      Semi-autonomous Teams
      Smoke Tests
      CODE
      DATA
      Measure Faster
      MEASURE
      Split Tests
      Clear Product Owner
      Continuous Deployment
      Usability Tests
      Real-time Monitoring
      Customer Liaison
      Funnel Analysis
      Cohort Analysis
      Net Promoter Score
      Search Engine Marketing
      Real-Time Alerting
      Predictive Monitoring
    • 36. There’s much more…
      Startup Lessons Learned
      (season one 2008-2009)
      Every essay from the blog’s first year
      http://bit.ly/SLLbookbeta
    • 37. Thanks!
      • Startup Lessons Learned Blog
      • 38. http://StartupLessonsLearned.com/
      • 39. Getting in touch (#leanstartup)
      • 40. http://twitter.com/ericries
      • 41. eric@theleanstartup.com
      • 42. Startup Lessons Learned – in print
      • 43. Beta version available today
      • 44. http://bit.ly/SLLbookbeta
    • Part Two
    • 45. How to build a Lean Startup
      Let’s talk about some specifics.
      Rapid Split-tests
      Five Why’s
      Continuous Deployment
      Minimum Viable Product
    • 46. Rapid Split Tests
      IDEAS
      Code Faster
      Learn Faster
      BUILD
      LEARN
      Continuous
      Deployment
      Five Whys Root
      Cause Analysis
      CODE
      DATA
      Measure Faster
      MEASURE
      Rapid Split Tests
    • 47. Split-testing all the time
      A/B testing is key to validating your hypotheses
      Has to be simple enough for everyone to use and understand it
      Make creating a split-test no more than one line of code:
      if( setup_experiment(...) == "control" ) {
      // do it the old way
      } else {
      // do it the new way
      }
    • 48. The AAA’s of Metrics
      Actionable
      Accessible
      Auditable
    • 49. Measure the Macro
      Always look at cohort-based metrics over time
      Split-test the small, measure the large
    • 50. Five Whys
      IDEAS
      Code Faster
      Learn Faster
      BUILD
      LEARN
      Continuous
      Deployment
      Five Whys Root
      Cause Analysis
      CODE
      DATA
      Measure Faster
      MEASURE
      Rapid Split Tests
    • 51. Five Whys Root Cause Analysis
      • A technique for continuous improvement of company process.
      • 52. Ask “why” five times when something unexpected happens.
      • 53. Make proportional investments in prevention at all five levels of the hierarchy.
      • 54. Behind every supposed technical problem is usually a human problem. Fix the cause, not just the symptom.
    • Continuous Deployment
      IDEAS
      LEARN
      BUILD
      Learn Faster
      Customer Development
      Five Whys
      Build Faster
      Continuous Deployment
      Small Batches
      Continuous Integration
      Refactoring
      DATA
      CODE
      MEASURE
      Measure Faster
      Split Testing
      Actionable Metrics
      Net Promoter Score
      SEM
    • 55. Continuous Deployment
      • Deploy new software quickly
      • 56. At IMVU time from check-in to production = 20 minutes
      • 57. Tell a good change from a bad change (quickly)
      • 58. Revert a bad change quickly
      • 59. And “shut down the line”
      • 60. Work in small batches
      • 61. At IMVU, a large batch = 3 days worth of work
      • 62. Break large projects down into small batches
    • Cluster Immune System
      What it looks like to ship one piece of code to production:
      • Run tests locally (SimpleTest, Selenium)
      • 63. Everyone has a complete sandbox
      • 64. Continuous Integration Server (BuildBot)
      • 65. All tests must pass or “shut down the line”
      • 66. Automatic feedback if the team is going too fast
      • 67. Incremental deploy
      • 68. Monitor cluster and business metrics in real-time
      • 69. Reject changes that move metrics out-of-bounds
      • 70. Alerting & Predictive monitoring (Nagios)
      • 71. Monitor all metrics that stakeholders care about
      • 72. If any metric goes out-of-bounds, wake somebody up
      • 73. Use historical trends to predict acceptable bounds
      When customers see a failure:
      • Fix the problem for customers
      • 74. Improve your defenses at each level
    • Minimum Viable Product
      IDEAS
      Code Faster
      Learn Faster
      BUILD
      LEARN
      Continuous
      Deployment
      Minimum Viable
      Product
      CODE
      DATA
      Measure Faster
      MEASURE
      Rapid Split Tests
    • 75. Possible Approaches
      “Maximize chances of success”
      Build a great product with many features that increase the odds that customers will want it
      Problem: no feedback until the end, might be too late to adjust
      “Release early, release often”
      Get as much feedback as possible, as soon as possible
      Problem: run around in circles, chasing what customers think they want
    • 76. Minimum Viable Product
      The minimum set of features needed to learn from earlyvangelists – visionary early adopters
      Avoid building products that nobody wants
      Maximize the learning per dollar spent
      Get the facts before it’s too late
      Probably much more minimum than you think!
    • 77. 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
    • 78. Fears
      False negative: “customers would have liked the full product, but the MVP sucks, so we abandoned the vision”
      Visionary complex: “but customers don’t know what they want!”
      Too busy to learn: “it would be faster to just build it right, all this measuring distracts from delighting customers”
    • 79. Get Started Today
      You are ready to do this, no matter
      who you are
      what job you have
      what stage of company you’re in
      Get started now, today.
    • 80. There’s much more…
      IDEAS
      Code Faster
      Learn Faster
      BUILD
      LEARN
      Unit Tests
      Usability Tests
      Continuous Integration
      Incremental Deployment
      Free & Open-Source Components
      Cloud Computing
      Cluster Immune System
      Just-in-time Scalability
      Refactoring
      Developer Sandbox
      Minimum Viable Product
      Split Tests
      Customer Interviews
      Customer Development
      Five Whys Root Cause Analysis
      Customer Advisory Board
      Falsifiable Hypotheses
      Product Owner Accountability
      Customer Archetypes
      Cross-functional Teams
      Semi-autonomous Teams
      Smoke Tests
      CODE
      DATA
      Measure Faster
      MEASURE
      Split Tests
      Clear Product Owner
      Continuous Deployment
      Usability Tests
      Real-time Monitoring
      Customer Liaison
      Funnel Analysis
      Cohort Analysis
      Net Promoter Score
      Search Engine Marketing
      Real-Time Alerting
      Predictive Monitoring
    • 81. There’s much more…
      Startup Lessons Learned
      (season one 2008-2009)
      Every essay from the blog’s first year:
      http://bit.ly/SLLbookbeta
    • 82. Thanks!
      • Startup Lessons Learned Blog
      • 83. http://StartupLessonsLearned.com/
      • 84. Getting in touch (#leanstartup)
      • 85. http://twitter.com/ericries
      • 86. eric@theleanstartup.com
      • 87. Startup Lessons Learned – in print
      • 88. Beta version available today
      • 89. http://bit.ly/SLLbookbeta
    • Backup
    • 90. Don’t Launch
      IDEAS
      Code Faster
      Learn Faster
      BUILD
      LEARN
      Continuous
      Deployment
      Don’t Launch
      CODE
      DATA
      Measure Faster
      MEASURE
      Rapid Split Tests
    • 91. Don’t Launch
      What is a launch?
      Marketing Launch
      Announce a new product, start its PR campaign, and engage in buzz marketing activities.
      Product Launch
      Make a new product available to customers in the general public.
    • 92. Effects of Marketing Launch
      Drive customers into your sales pipeline
      Establish credibility with potential partners
      Help you raise money
      … however …
    • 93. Other Consequences
      A marketing launch establishes your positioning
      Waste customers on a non-working business model
      You never get a second chance to launch
    • 94. Why do we launch?
      Investors push for it (ego?)
      Founders push for it (ego?)
      Fear of the accidental launch
      Instead: build a Minimum Viable Product, establish small but renewable audience, iterate iterate iterate
    • 95. Know When to Launch
      When you have a strategy for the launch
      Know the success metrics
      Know your fundamental driver of growth
      Know where, when, and how to launch
      Launch when you can predict the future