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2010 05 03 Lean Startup Intensive At Web 2 0 Expo Welcome By Eric Ries

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Presented by Eric Ries at the Lean Startup Intensive at Web 2.0 Expo in SF on May 3, 2010

Presented by Eric Ries at the Lean Startup Intensive at Web 2.0 Expo in SF on May 3, 2010

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  • I’m not leaving you, I’m pivoting to another man
  • Conference structure
  • Truth: The Lean Startup method is not about cost, it is about speed. Lean Startups waste less money, because they use a disciplined approach to testing new products and ideas. Lean, when used in the context of lean startup, refers to a process of building companies and products using lean manufacturing principles applied to innovation. That process involves rapid hypothesis testing, validated learning about customers, and a disciplined approach to product development.
  • Truth: The Lean Startup methodology applies to all companies that face uncertainty about what customers will want. This is true regardless of industry or even scale of company: many large companies depend on their ability to create disruptive innovation. Those general managers are entrepreneurs, too. And they can benefit from the speed and discipline of starting with a minimum viable product and then learning and iterating continuously.
  • Truth: There’s nothing wrong with raising venture capital. Many lean startups are ambitious and are able to deploy large amounts of capital. What differentiates them is their disciplined approach to determining when to spend money: after the fundamental elements of the business model have been empirically validated. Because lean startups focus on validating their riskiest assumptions first, they sometimes charge money for their product from day one – but not always.
  • Truth: Lean Startups are driven by a compelling vision, and they are rigorous about testing each element of this vision against reality. They use customer development, split-testing, and actionable analytics as vehicles for learning about how to make their vision successful. But they do not blindly do what customers tell them, nor do they mechanically attempt to optimize numbers. Along the way, they pivot away from the elements of the vision that are delusional and double-down on the elements that show promise.
  • Transcript

    • 1. Lean Startup Intensive
      Welcome
      #leanstartup
      Eric Ries (@ericries)
      http://StartupLessonsLearned.com
    • 2. STOPWASTINGPEOPLE’STIME
    • 3. Most Startups Fail
    • 4. Most Startups Fail
    • 5. Most Startups Fail
    • 6. Entrepreneurship = Awesome
      It is the best time in the history of the world to be an entrepreneur
      Costs are falling in all industries
      Barriers are being destroyed
      Disruption and chaos are everywhere
    • 7. Why build a startup?
      Only entrepreneurship combines these three elements
      Change the world
      Build an organization of lasting value
      Make customers’ lives better
    • 8. What is a startup?
      • A startup is a human institution designed to deliver a new product or service under conditions of extreme uncertainty.
      • 9. Nothing to do with size of company, sector of the economy, or industry
    • Entrepreneurship is management
      • Our goal is to create an institution, not just a product
      • 10. Traditional management practices fail
      - “general management” as taught to MBAs
      • Need practices and principles geared to the startup context of extreme uncertainty
      • 11. Not just for “two guys in a garage”
    • The Pivot
    • 12. I’
    • 13. The Pivot
      • What do successful startups have in common?
      • 14. They started out as digital cash for PDAs, but evolved into online payments for eBay.
      • 15. They started building BASIC interpreters, but evolved into the world's largest operating systems monopoly.
      • 16. They were shocked to discover their online games company was actually a photo-sharing site.
      • 17. Pivot: change directions but stay grounded in what we’ve learned.
    • Speed Wins
      If we can reduce the time between pivots
      We can increase our odds of success
      Before we run out of money
    • 18. Making Progress
      • In a lean transformation, question #1 is – which activities are value-creating and which are waste?
      • 19. In traditional business, value is created by delivering products or services to customers
      • 20. In a startup, the product and customer are unknowns
      • 21. We need a new definition of value for startups: validated learning about customers
    • Traditional Product DevelopmentUnit of Progress: Advance to Next Stage
      Waterfall
      Requirements
      Specifications
      Design
      Problem: known
      Solution:known
      Implementation
      Verification
      Maintenance
    • 22. Agile Product DevelopmentUnit of Progress: A line of Working Code
      “Product Owner” or in-house customer
      Problem: known
      Solution:unknown
    • 23. Lean StartupUnit of Progress: Validated Learning About Customers ($$$)
      Customer Development
      Hypotheses, Experiments,
      Insights
      Problem:unknown
      Data, Feedback,
      Insights
      Solution:unknown
      Agile Development
    • 24. Minimize TOTAL time through the loop
    • 25. There’s much more…
      Build Faster
      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
      Learn Faster
      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
      Measure Faster
      Funnel Analysis
      Cohort Analysis
      Net Promoter Score
      Search Engine Marketing
      Real-Time Alerting
      Predictive Monitoring
      Measure Faster
      Split Tests
      Clear Product Owner
      Continuous Deployment
      Usability Tests
      Real-time Monitoring
      Customer Liaison
    • 26. Gartner Hype Cycle
    • 27. Myth #1
      Myth
      Lean means cheap. Lean startups try to spend as little money as possible.
      Truth The Lean Startup method is not about cost, it is about speed.
    • 28. Myth #2
      Myth
      The Lean Startup is only for Web 2.0/internet/consumer software companies.
      Truth The Lean Startup applies to all companies that face uncertainty about what customers will want.
    • 29. Myth #3
      Myth
      Lean Startups are small bootstrapped startups.
      Truth Lean Startups are ambitious and are able
      to deploy large amounts of capital.
    • 30. Myth #4
      Myth
      Lean Startups replace vision with dataor customer feedback.
      Truth Lean Startups are driven by a compelling vision, and are rigorous about testing each element of this vision
    • 31. Today
      Session 1Eric Ries: Welcome & Introduction Steve Blank: Customer Development
      Session 2 Sean Ellis: Product/Market Fit & the Startup Pyramid Matt Brezina: "The 5 stages of Xobni's growth and 5 pivots along the way”
      Session 3 Dave McClure: Startup Metrics Dan Martell & Ethan Bloch: Flowtown Case Study David Binetti: Votizen Case Study
      Session 4 Investing in the era of the lean startup - Moderator: Dave McClure- Panelists: Ann Miura-Ko, Josh Kopelman, Jeff ClavierHiten Shah: KISSmetrics case study
      Joint session Applied Communilytics Intensive Q&A: Eric Ries, Sean Power, and Alistair Croll