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The Lean Startup fbFund Edition

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  • Transcript

    • 1. The Lean Startup#leanstartup
      Eric Ries (@ericries)
      http://StartupLessonsLearned.blogspot.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. A Tale of Two Startups
    • 8. Startup #1
    • 9. 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.
    • 10. Achieving Failure
      Company failed utterly, $40MM and five years of pain.
      Crippled by “shadow beliefs” that destroyed the effort of all those smart people.
    • 11. Shadow Belief #1
      We know what customers want.
    • 12. Shadow Belief #2
      We can accurately predict the future.
    • 13. Shadow Belief #3
      Advancing the plan is progress.
    • 14. 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.
    • 15. Startup #2
    • 16. IMVU
       
    • 17. IMVU
       
    • 18. 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: 2007 revenues of $10MM
    • 19. 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.
    • 20. Commodity technology stack
      Leverage = for each ounce of effort you invest in your product, you take advantage of the efforts of thousands or millions of others.
      It’s easy to see how high-leverage technology is driving costs down.
      More important is its impact on speed.
      Time to bring a new product to market is falling rapidly.
    • 21. Customer Development
      • Continuous cycle of customer interaction
      • 22. Rapid hypothesis testing about market, pricing, customers, …
      • 23. Extreme low cost, low burn, tight focus
      • 24. Measurable gates for investors
      http://bit.ly/FourSteps
    • 25. Agile Product Development(A tale of two startups, revisited)
      • Principles drawn from Lean Manufacturing and Toyota Production System
      • 26. These examples are drawn from software startups, but increasingly:
      • 27. All products require software
      • 28. 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
    • 29. Agile Product Development
      Unit of Progress: A line of Working Code
      “Product Owner” or in-house customer
      Problem: known
      Solution: unknown
    • 30. Product Development at Lean Startup
      Unit of Progress: Validated Learning About Customers ($$$)
      Customer Development
      Hypotheses,
      Experiments,
      Insights
      Problem: unknown
      Data,
      Feedback,
      Insights
      Solution: unknown
    • 31. Minimize TOTAL time through the loop
      IDEAS
      LEARN
      BUILD
      DATA
      CODE
      MEASURE
    • 32. How to build a Lean Startup
      Let’s talk about some specifics. These are not everything you need, but they will get you started
      Small Batches
      Continuous deployment
      Split-test (A/B) experimentation
      Five why’s
    • 33. Small Batches
      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
    • 34. Benefits of Small Batches
      Faster feedback
      Problems are instantly localized
      Reduce risk
      Reduce overhead
    • 35. 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
    • 36. Continuous Deployment
      • Deploy new software quickly
      • 37. At IMVU time from check-in to production = 20 minutes
      • 38. Tell a good change from a bad change (quickly)
      • 39. Revert a bad change quickly
      • 40. And “shut down the line”
      • 41. Work in small batches
      • 42. At IMVU, a large batch = 3 days worth of work
      • 43. 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)
      • 44. Everyone has a complete sandbox
      • 45. Continuous Integration Server (BuildBot)
      • 46. All tests must pass or “shut down the line”
      • 47. Automatic feedback if the team is going too fast
      • 48. Incremental deploy
      • 49. Monitor cluster and business metrics in real-time
      • 50. Reject changes that move metrics out-of-bounds
      • 51. Alerting & Predictive monitoring (Nagios)
      • 52. Monitor all metrics that stakeholders care about
      • 53. If any metric goes out-of-bounds, wake somebody up
      • 54. Use historical trends to predict acceptable bounds
      When customers see a failure:
      • Fix the problem for customers
      • 55. Improve your defenses at each level
    • 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
    • 56. 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
      }
    • 57. The AAA’s of Metrics
      Actionable
      Accessible
      Auditable
    • 58. Measure the Macro
      Always look at cohort-based metrics over time
      Split-test the small, measure the large
    • 59. Five Whys
      IDEAS
      Code Faster
      Learn Faster
      BUILD
      LEARN
      Continuous
      Deployment
      Five Whys Root
      Cause Analysis
      CODE
      DATA
      Measure Faster
      MEASURE
      Rapid Split Tests
    • 60. Five Whys Root Cause Analysis
      • A technique for continuous improvement of company process.
      • 61. Ask “why” five times when something unexpected happens.
      • 62. Make proportional investments in prevention at all five levels of the hierarchy.
      • 63. Behind every supposed technical problem is usually a human problem. Fix the cause, not just the symptom.
    • 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
    • 64. The Lean Startup
      You are ready to do this, whether you are:
      Thinking of starting a new company, but haven’t taken the first step
      Are in a startup now that could iterate faster
      Want to create the conditions for lean innovation inside a big company
      Get started, now, today.
    • 65. Thanks!
      • Startup Lessons Learned Blog
      • 66. http://StartupLessonsLearned.blogspot.com/
      • 67. Getting in touch (#leanstartup)
      • 68. http://twitter.com/ericries
      • 69. eric@theleanstartup.com
      • 70. The Lean Startup Workshop
      • 71. October 30, 2009 in San Francisco
      • 72. December 10, 2009 in New York
      • 73. http://training.oreilly.com/theleanstartup/