Lean Startups Crash Course

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Silicon Flatirons is pleased to host Rally Software's Zach Nies for a Crash Course about some of the surprising science behind building successful startups. Even though building a startup is hard work with high failure risk, entrepreneurs Steve Blank and Eric Ries have popularized practices that can increase the odds of success. Following the Customer Development or Lean Startup practices will show you what to do. This talk will give you an understanding of why these techniques work, which will allow you to better apply them to your startup or scale them into your enterprise. The event will focus on high growth business based on the deep experience. Entrepreneurs are by nature execution-oriented and you will walk away from the talk with concrete, actionable ideas that will help you make better decisions tomorrow. The subject matter should be relevant to both entrepreneurs creating new companies and entrepreneurs reinventing existing enterprises.

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Lean Startups Crash Course

  1. 1. Lean StartupsSilicon Flatirons Crash Course
  2. 2. h"p://www.flickr.com/photos/nateone/3768979925;
  3. 3. Zach Nies @zachnies
  4. 4. Why I careabout startups
  5. 5. Font Samplerhttp://media.kelbymediagroup.com/layersmagazine/images/columns/artoftype/may06/glyph-set.jpg http://en.wikipedia.org/wiki/File:Caslon-schriftmusterblatt.jpeg
  6. 6. 2,500,000 CustomersRevolutionized an industry
  7. 7. Amazingteam, culture, product, and process
  8. 8. One problem…
  9. 9. Bad business
  10. 10. Revolutionized nothing
  11. 11. Amazing team, culture,product, process
  12. 12. I love to change industries
  13. 13. Apply new disciplinesto your startup
  14. 14. Become disciplined explorers…
  15. 15. who know how tobalance exploration and execution
  16. 16. Increase yourodds of success
  17. 17. What is a startup?
  18. 18. How do we navigate that uncertainty?
  19. 19. Explore Execute h"p://www.slideshare.net/sblank/the?startup?owners?manual?sxsw?11954724;
  20. 20. When to explore vs execute?
  21. 21. Brown,;Tim;(2009?09?16).;Change;by;Design;(Kindle;LocaPon;1984).;Harper;Collins,;Inc..;Kindle;EdiPon.;;
  22. 22. Where are you?
  23. 23. Brown,;Tim;(2009?09?16).;Change;by;Design;(Kindle;LocaPon;1984).;Harper;Collins,;Inc..;Kindle;EdiPon.;;
  24. 24. What to doExecute Brown,;Tim;(2009?09?16).;Change;by;Design;(Kindle;LocaPon;1984).;Harper;Collins,;Inc..;Kindle;EdiPon.;;
  25. 25. What to do Brown,;Tim;(2009?09?16).;Change;by;Design;(Kindle;LocaPon;1984).;Harper;Collins,;Inc..;Kindle;EdiPon.;;
  26. 26. What to do BigCompanies Brown,;Tim;(2009?09?16).;Change;by;Design;(Kindle;LocaPon;1984).;Harper;Collins,;Inc..;Kindle;EdiPon.;;
  27. 27. BigCompanies h"p://www.flickr.com/photos/ironnickel/6076087519;
  28. 28. Startupsh"p://www.flickr.com/photos/elcapitan/2387917709;
  29. 29. What to doExecute Brown,;Tim;(2009?09?16).;Change;by;Design;(Kindle;LocaPon;1984).;Harper;Collins,;Inc..;Kindle;EdiPon.;;
  30. 30. Explore vs. Execute
  31. 31. 30 yearsof science
  32. 32. Unordered OrderedChaotic Complex Complicated Simple
  33. 33. Unordered Ordered Complex ComplicatedChaotic Simple
  34. 34. Unordered Ordered Complex Complicated Chaotic Simple
  35. 35. Unordered Ordered Complex Complicated Cause & Effect is only Cause & Effect is not understandable in obvious and requires retrospect, and is not analysis or expertise repeatable Cause & Effect is Cause & Effect not obvious to all perceivable and is repeatable Chaotic Simple Cynefin
  36. 36. Music Industry in 2000 - Napster Complex Complicated Independent Managing a large tour musicians self publishing online Disorder Managing a NIN tour Major label online Major label CD distribution distribution Chaotic SimpleUnordered Ordered
  37. 37. Unordered Ordered E E x x p e l c o u r t e e
  38. 38. Unordered Ordered E D e m l e i r b g e e r a n t t e
  39. 39. Unordered Ordered P r P e p l a a r n e
  40. 40. Unordered Ordered E n t G M r e a e n n p e a r r g e a e n l r e u r
  41. 41. Ideal team sizesComplex Complicated < 30 People < 150 People < 7 People > 150 PeopleChaotic Simple
  42. 42. Not Black and White Complex Complicated Create Create market buzz sales comp plan Write Increase terms of signups service Disorder Secure Order ; hacked office supplies server Chaotic SimpleUnordered Ordered
  43. 43. Market Dynamics Complex Complicated Product/market fit Disorder Chaotic SimpleUnordered Ordered
  44. 44. What to doExecute Brown,;Tim;(2009?09?16).;Change;by;Design;(Kindle;LocaPon;1984).;Harper;Collins,;Inc..;Kindle;EdiPon.;;
  45. 45. Example – Rideorama
  46. 46. Brown,;Tim;(2009?09?16).;Change;by;Design;(Kindle;LocaPon;1984).;Harper;Collins,;Inc..;Kindle;EdiPon.;;
  47. 47. Market Dynamics Complex Complicated Chaotic SimpleUnordered Ordered
  48. 48. h"p://www.flickr.com/photos/virtualeyesee/6107062655;
  49. 49. Create a plan topredict the future
  50. 50. h"p://www.flickr.com/photos/isaacmao/380257543;
  51. 51. Market research Product definition Product requirements Detailed plan Alpha release Beta release Final releaseFIRST CONTACT WITH CUSTOMERS
  52. 52. Market research Product definition Product requirements Detailed plan Alpha release Beta release Final releaseFIRST CONTACT WITH CUSTOMERS
  53. 53. Market research Product definition Product requirements Detailed plan Alpha release Beta release Final releaseFIRST CONTACT WITH CUSTOMERS
  54. 54. Market research Product definition Product requirements Detailed plan Alpha release Beta release Final releaseFIRST CONTACT WITH CUSTOMERS
  55. 55. Market research Product definition Product requirements Detailed plan Alpha release Beta release Final releaseFIRST CONTACT WITH CUSTOMERS
  56. 56. Market research Product definition Product requirements Detailed plan Alpha release Beta release Final releaseFIRST CONTACT WITH CUSTOMERS
  57. 57. Market research Product definition Product requirements Detailed plan Alpha release Beta release Final releaseFIRST CONTACT WITH CUSTOMERS
  58. 58. HOW MANY GUESSES?
  59. 59. FIRST CONTACT WITHPOTENTIAL CUSTOMERS
  60. 60. h"p://www.flickr.com/photos/oregondot/4132135156;
  61. 61. Create an environmentto discover the future
  62. 62. How?
  63. 63. Entrepreneurship Vision; Culture Business;Model; Frame Frame Frame Frame Build & Ship Build & Ship Build & Ship Build & ShipLearn Learn Learn Learn Test & Measure Test & Measure Test & Measure Test & Measure
  64. 64. Disciplined way toturn all these guesses into knowledge
  65. 65. h"p://www.richard?feynman.net/gallery.htm;
  66. 66. TAKE EACH MAJOR GUESS
  67. 67. RUN AN EXPERIMENT
  68. 68. h"p://www.youtube.com/watch?v=Iyjs3zeoSrM;
  69. 69. How do I run meaningfulexperiments?
  70. 70. Maximize learning – Don Reinertsenhttp://jchyip.blogspot.com/2010/05/lean-software-and-systems-conference.html
  71. 71. What could go wrong with that?
  72. 72. Visionh"p://www.flickr.com/photos/klearchos/4541072707;
  73. 73. Lean StartupCustomer Development
  74. 74. Explore Execute h"p://www.slideshare.net/sblank/the?startup?owners?manual?sxsw?11954724;
  75. 75. Explore h"p://www.slideshare.net/sblank/the?startup?owners?manual?sxsw?11954724;
  76. 76. Frame Frame Build & Ship Build & Ship LearnLearn Test & Measure Test & Measure Explore h"p://www.slideshare.net/sblank/the?startup?owners?manual?sxsw?11954724;
  77. 77. Startups are NOT smaller versionsof big companies
  78. 78. Discover and solvecustomer’s problem
  79. 79. “Get out ofthe building!”Steve Blank
  80. 80. “Meaningemerges through interaction” Dave Snowden
  81. 81. Explore h"p://www.slideshare.net/sblank/the?startup?owners?manual?sxsw?11954724;
  82. 82. Business Model
  83. 83. Example – iPod
  84. 84. + Margin & Profit Walkman for the digital age Design, Manufacturing, Marketing, Supporth"p://www.flickr.com/photos/mrmonochrome/93535053; h"p://www.flickr.com/photos/75001512@N00/4683351383;
  85. 85. h"p://www.flickr.com/photos/virtualeyesee/6107062655;
  86. 86. First big guess:We understand theproblem a customer wants solved
  87. 87. Who isfeeling the pain?
  88. 88. What painare they feeling?
  89. 89. How do they makethat pain go away today?
  90. 90. “Customers don’t care about your solution. They care about their problems. Dave McClure
  91. 91. h"p://www.flickr.com/photos/adacPo/2535502416;
  92. 92. Typicalmarket research: Customer attributes
  93. 93. h"p://www.flickr.com/photos/serpicolugnut/172616929;
  94. 94. Innovationmarket research: Customer circumstances
  95. 95. h"p://www.flickr.com/photos/serpicolugnut/172616929;
  96. 96. h"p://www.flickr.com/photos/indigoprime/2481346616;
  97. 97. h"p://www.flickr.com/photos/twostoutmonks/664314897;
  98. 98. Milkshake Test What job isyour solution being hired to perform?
  99. 99. Problem Interview OverviewRunning Lean by Ash Maurya, page 118.
  100. 100. Example - Iridium
  101. 101. 1987
  102. 102. 1987 1999 $5.2 B
  103. 103. 1987 1999 $5.2 B 30,000 not 42M
  104. 104. 1987 1999 $5.2 B 30,000 not 42M Sold for $25M
  105. 105. Next big guess: Our productsolves the customer’s job to be done
  106. 106. Test yourlow fidelity Minimum Viable Product
  107. 107. Solution Interview OverviewRunning Lean by Ash Maurya, page 142.
  108. 108. Limited accessto a rough prototype
  109. 109. Example - $40 MVP
  110. 110. Next big guess:Our business model can be profitable
  111. 111. Explore h"p://www.slideshare.net/sblank/the?startup?owners?manual?sxsw?11954724;
  112. 112. Explore h"p://www.slideshare.net/sblank/the?startup?owners?manual?sxsw?11954724;
  113. 113. Next big guess:We can sell our offer or We can acquire and retain users
  114. 114. Sell toEarlyvangelists
  115. 115. Next guess: We know how toposition our product
  116. 116. Product PositioningFor (target customers)Who (have the following problem)The (product name) is a (describe theproduct or solution)That provides (key benefit)Unlike (reference competition),The product/solution (describe the keypoint of competitive differentiation)
  117. 117. Next guess:We have the right tools to close customers
  118. 118. Next guess:We can acquire andactivate customers
  119. 119. Sales Funnelh"p://www.flickr.com/photos/carlagates247/5524789016;
  120. 120. Activation Funnelh"p://www.flickr.com/photos/500hats/577630547;
  121. 121. Activation Funnelh"p://www.flickr.com/photos/500hats/577630651;
  122. 122. Product Roadmap 8/31/10; 10/30/10; 1/?/11; 3/?/11; Release 1 Release 2 Release 3 Release 4Theme: UI Theme: Reporting Theme: Dashboards Theme: AdminFor X, this UI release For <who>, this release For <who>, this release For <who>, this releaseprovides <what value> provides <what value> provides <what value> provides <what value>Key Features: Key Features: Key Features: Key Features: 1. Feature A 4. Feature B’ 7. Feature B’’ 10. Feature F 2. Feature B 5. Feature C’ 8. Feature D’ 11. Feature G 3. Feature C 6. Feature D 9. Feature E
  123. 123. Next guess: We have avaluable product
  124. 124. Get out and sell
  125. 125. h"p://www.flickr.com/photos/Pnfoilraccoon/5555060858;
  126. 126. Pivot orPersevere?
  127. 127. Executeh"p://www.slideshare.net/sblank/the?startup?owners?manual?sxsw?11954724;
  128. 128. Explore Execute h"p://www.slideshare.net/sblank/the?startup?owners?manual?sxsw?11954724;
  129. 129. Culture
  130. 130. Democratize data
  131. 131. Distributedecision making
  132. 132. Diversity IndependenceDecentralization Aggregation
  133. 133. No blame or shame
  134. 134. Example
  135. 135. Don’t squander your time
  136. 136. buildingthe wrong business
  137. 137. Do what you love
  138. 138. Love what you do
  139. 139. Books that informed this talk
  140. 140. People who informed this talk David Max Ash ClaytonSnowden Boisot Maurya Christensen Frank H. Eric Knight RiesGeoffrey Steve Moore Blank
  141. 141. h"p://www.flickr.com/photos/fla"op341/224597838;
  142. 142. @zachnies

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