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Lean Startup   An overview
Disclaimer
Disclaimer• No silver bullets• No substitute for experience• Just one tool• Not the whole tool
Disclaimer• No silver bullets• No substitute for experience• Just one tool• Not the whole tool
Disclaimer• No silver bullets• No substitute for experience• Just one tool• Not the whole tool
Disclaimer• No silver bullets• No substitute for experience• Just one tool• Not the whole tool
“Lean Startup”
What is a startup?
What is a startup?“The act or fact of starting something; asetting in motion.”                         -Dictionary (useless)
What is a startup?“Startups are fresh, new companies tryingto do cool stuff.”            -Instinctive (still mostly useless)
What is a startup?“A startup is an organization formed tosearch for a repeatable and scalablebusiness model.”             ...
What is a startup?“A startup is a human institution designed todeliver a new product or service underconditions of extreme...
What is a startup?“...essentially a startup is a new businessdesigned for scale.”“A startup is a small company that takes ...
What is a startup?“A startup is a business which has ambitionsand plans to grow by a large factorover the next few years.”...
Key points• Uncertainty, search, difficulty• Ambition, growth• Methods, plans• Business, money
How should I build a     startup?
Some typicalapproaches that don’t       work
1. First, write a business           plan...
2. Raise lots of moneyand then figure it out
3. Plan it, build it and    they will come
4. Get lots of users andfigure the rest out later
5. Don’t spend anything         at all.
A better method...     “Lean”
Lean is not...• Cheap• Rigid• Limited to simple ideas• The magic key to success
Lean is...• A method to organise the chaos• Less waste• Less risk• More learning• A common language
The fundamentalprinciple of “Lean”
• A business is there to achieve a purpose• Building things people don’t need is waste• Building large things that people ...
• A business is there to achieve a purpose• Building things people don’t need is waste• Building large things that people ...
• A business is there to achieve a purpose• Building things people don’t need is waste• Building large things that people ...
• A business is there to achieve a purpose• Building things people don’t need is waste• Building large things that people ...
• A business is there to achieve a purpose• Building things people don’t need is waste• Building large things that people ...
Sounds hard!
The “Lean” approach:Build the smallest, easiest, smartest thing thatteaches you what you need to learn
The “Lean” approach:Build the smallest, easiest, smartest thing thatteaches you what you need to learn
What do you need to      learn?
Do people want it?
Can I sell it?
Can I build it?
A startup plan1. Do people want it?2. Can I sell it?3. Can I build it?
The “Lean” approach:Build the smallest, easiest, smartestthing that teaches you what you need tolearn
Minimum Viable   Product
Minimum Viable         Product• Landing page• Paper prototype• Presentation/pitch• Anything that enables you to learn!•
Minimum Viable         Product• Landing page• Paper prototype• Presentation/pitch• Anything that enables you to learn!•
Minimum Viable         Product• Landing page• Paper prototype• Presentation/pitch• Anything that enables you to learn!•
Minimum Viable         Product• Landing page• Paper prototype• Presentation/pitch• (Fake) demo video• “Concierge MVP”• Any...
Minimum Viable         Product• Landing page• Paper prototype• Presentation/pitch• (Fake) demo video• “Concierge MVP”• Any...
Minimum Viable         Product• Landing page• Paper prototype• Presentation/pitch• (Fake) demo video• “Concierge MVP”• Any...
MVP• MVP is not a crappy version of the product.• MVP is driven by the questions you need  answered.
The Lean Cycle
The Lean Cycle                (backwards)                              ExperimentHypothesis                   Text        ...
Lean Toolkit
Metrics
Up and to the right...
Vanity metrics• User signups• Traffic• Retention rate• Any metric in a vacuum
Good metrics• Mostly: A/B test results• Cohort breakdowns• Retention rates over time• Activity stream• Any metric that’s a...
Actionable?• Must be related to the key engines of your  business...
Engines:value and growth
Engine of value• How much value is your startup delivering?• Is it enough to be worth paying for?• Do people perceive that...
Engine of growth• How does your startup acquire new  customers? • Paid • Viral • Sticky
Engine of growth• How does your startup acquire new  customers? • Paid (CAC & LTV) • Viral (Viral Coefficient) • Sticky (Re...
Actionable Metrics• Actionable metrics are the ones which lead  to a change which you know will impact  your key drivers.
“InnovationAccounting”
Lean reporting• If you only report usage/revenue, that’s  what you’ll be judged on• Track validated learning instead
Pivots(hot buzzword alert)
Experiment failed...      what now?• Why did it fail? Which assumption was  wrong?• Can the assumption be tweaked, or does...
Experiments      succeeded, but...• If it’s not working well enough to build a  sustainable business, it’s not working,  p...
• Zoom-in pivot: single feature becomes  the whole product• Zoom-out pivot: the product becomes  a feature of a larger pro...
• Customer segment pivot: some  customers like us, but not the ones initially  targeted• Customer need pivot: the product ...
• Business architecture pivot: low  margin, high volume, vs. high margin, low  volume• Value capture pivot: change the way...
But... don’t abuse pivots.
Let’s recap...
Startups areexperiments
Test critical things as quickly as possible
Work back from what     you want to test...                      ExperimentHypothesis              Text             Metric
Actionable metrics, not    vanity metrics
Report on learning    progress
Pivot whenassumptions are wrong
Lean is just a method      Be smart     Get advice
Where to go from         here...•   “The Lean Startup” - Eric Ries•   “Running Lean” - Ash Maurya•   “The entrepreneur’s g...
Lean Startup talk at Business Bootcamp, Brunel
Lean Startup talk at Business Bootcamp, Brunel
Lean Startup talk at Business Bootcamp, Brunel
Lean Startup talk at Business Bootcamp, Brunel
Lean Startup talk at Business Bootcamp, Brunel
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Lean Startup talk at Business Bootcamp, Brunel

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Transcript of "Lean Startup talk at Business Bootcamp, Brunel"

  1. 1. Lean Startup An overview
  2. 2. Disclaimer
  3. 3. Disclaimer• No silver bullets• No substitute for experience• Just one tool• Not the whole tool
  4. 4. Disclaimer• No silver bullets• No substitute for experience• Just one tool• Not the whole tool
  5. 5. Disclaimer• No silver bullets• No substitute for experience• Just one tool• Not the whole tool
  6. 6. Disclaimer• No silver bullets• No substitute for experience• Just one tool• Not the whole tool
  7. 7. “Lean Startup”
  8. 8. What is a startup?
  9. 9. What is a startup?“The act or fact of starting something; asetting in motion.” -Dictionary (useless)
  10. 10. What is a startup?“Startups are fresh, new companies tryingto do cool stuff.” -Instinctive (still mostly useless)
  11. 11. What is a startup?“A startup is an organization formed tosearch for a repeatable and scalablebusiness model.” -Steve Blank
  12. 12. What is a startup?“A startup is a human institution designed todeliver a new product or service underconditions of extreme uncertainty.” -Eric Ries
  13. 13. What is a startup?“...essentially a startup is a new businessdesigned for scale.”“A startup is a small company that takes on ahard technical problem.” -Paul Graham
  14. 14. What is a startup?“A startup is a business which has ambitionsand plans to grow by a large factorover the next few years.” -Me!
  15. 15. Key points• Uncertainty, search, difficulty• Ambition, growth• Methods, plans• Business, money
  16. 16. How should I build a startup?
  17. 17. Some typicalapproaches that don’t work
  18. 18. 1. First, write a business plan...
  19. 19. 2. Raise lots of moneyand then figure it out
  20. 20. 3. Plan it, build it and they will come
  21. 21. 4. Get lots of users andfigure the rest out later
  22. 22. 5. Don’t spend anything at all.
  23. 23. A better method... “Lean”
  24. 24. Lean is not...• Cheap• Rigid• Limited to simple ideas• The magic key to success
  25. 25. Lean is...• A method to organise the chaos• Less waste• Less risk• More learning• A common language
  26. 26. The fundamentalprinciple of “Lean”
  27. 27. • A business is there to achieve a purpose• Building things people don’t need is waste• Building large things that people don’t need is large waste• You have no idea what you’re doing• You have no idea what to build
  28. 28. • A business is there to achieve a purpose• Building things people don’t need is waste• Building large things that people don’t need is large waste• You have no idea what you’re doing• You have no idea what to build
  29. 29. • A business is there to achieve a purpose• Building things people don’t need is waste• Building large things that people don’t need is large waste• You have no idea what you’re doing• You have no idea what to build
  30. 30. • A business is there to achieve a purpose• Building things people don’t need is waste• Building large things that people don’t need is large waste• You have no idea what you’re doing• You have no idea what to build
  31. 31. • A business is there to achieve a purpose• Building things people don’t need is waste• Building large things that people don’t need is large waste• You have no idea what you’re doing• You have no idea what to build
  32. 32. Sounds hard!
  33. 33. The “Lean” approach:Build the smallest, easiest, smartest thing thatteaches you what you need to learn
  34. 34. The “Lean” approach:Build the smallest, easiest, smartest thing thatteaches you what you need to learn
  35. 35. What do you need to learn?
  36. 36. Do people want it?
  37. 37. Can I sell it?
  38. 38. Can I build it?
  39. 39. A startup plan1. Do people want it?2. Can I sell it?3. Can I build it?
  40. 40. The “Lean” approach:Build the smallest, easiest, smartestthing that teaches you what you need tolearn
  41. 41. Minimum Viable Product
  42. 42. Minimum Viable Product• Landing page• Paper prototype• Presentation/pitch• Anything that enables you to learn!•
  43. 43. Minimum Viable Product• Landing page• Paper prototype• Presentation/pitch• Anything that enables you to learn!•
  44. 44. Minimum Viable Product• Landing page• Paper prototype• Presentation/pitch• Anything that enables you to learn!•
  45. 45. Minimum Viable Product• Landing page• Paper prototype• Presentation/pitch• (Fake) demo video• “Concierge MVP”• Anything that enables you to learn!
  46. 46. Minimum Viable Product• Landing page• Paper prototype• Presentation/pitch• (Fake) demo video• “Concierge MVP”• Anything that enables you to learn!
  47. 47. Minimum Viable Product• Landing page• Paper prototype• Presentation/pitch• (Fake) demo video• “Concierge MVP”• Anything that enables you to learn!
  48. 48. MVP• MVP is not a crappy version of the product.• MVP is driven by the questions you need answered.
  49. 49. The Lean Cycle
  50. 50. The Lean Cycle (backwards) ExperimentHypothesis Text Metric
  51. 51. Lean Toolkit
  52. 52. Metrics
  53. 53. Up and to the right...
  54. 54. Vanity metrics• User signups• Traffic• Retention rate• Any metric in a vacuum
  55. 55. Good metrics• Mostly: A/B test results• Cohort breakdowns• Retention rates over time• Activity stream• Any metric that’s actionable
  56. 56. Actionable?• Must be related to the key engines of your business...
  57. 57. Engines:value and growth
  58. 58. Engine of value• How much value is your startup delivering?• Is it enough to be worth paying for?• Do people perceive that and agree?
  59. 59. Engine of growth• How does your startup acquire new customers? • Paid • Viral • Sticky
  60. 60. Engine of growth• How does your startup acquire new customers? • Paid (CAC & LTV) • Viral (Viral Coefficient) • Sticky (Retention rate)
  61. 61. Actionable Metrics• Actionable metrics are the ones which lead to a change which you know will impact your key drivers.
  62. 62. “InnovationAccounting”
  63. 63. Lean reporting• If you only report usage/revenue, that’s what you’ll be judged on• Track validated learning instead
  64. 64. Pivots(hot buzzword alert)
  65. 65. Experiment failed... what now?• Why did it fail? Which assumption was wrong?• Can the assumption be tweaked, or does it need to be thrown out?• How can we rework the business model now we know that we know this?
  66. 66. Experiments succeeded, but...• If it’s not working well enough to build a sustainable business, it’s not working, period.
  67. 67. • Zoom-in pivot: single feature becomes the whole product• Zoom-out pivot: the product becomes a feature of a larger product
  68. 68. • Customer segment pivot: some customers like us, but not the ones initially targeted• Customer need pivot: the product doesn’t solve a big enough problem for our customers
  69. 69. • Business architecture pivot: low margin, high volume, vs. high margin, low volume• Value capture pivot: change the way you monetise
  70. 70. But... don’t abuse pivots.
  71. 71. Let’s recap...
  72. 72. Startups areexperiments
  73. 73. Test critical things as quickly as possible
  74. 74. Work back from what you want to test... ExperimentHypothesis Text Metric
  75. 75. Actionable metrics, not vanity metrics
  76. 76. Report on learning progress
  77. 77. Pivot whenassumptions are wrong
  78. 78. Lean is just a method Be smart Get advice
  79. 79. Where to go from here...• “The Lean Startup” - Eric Ries• “Running Lean” - Ash Maurya• “The entrepreneur’s guide to customer development” - Brant Cooper & Patrick Vlaskovits• Numerous blogs online...• Mentors...• EXPERIENCE!
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