Why Lean Startup Practices Work and How to Scale Them

  • 1,787 views
Uploaded on

Silicon Flatirons is pleased to host Rally Software Chief Technology Officer, Zach Nies, for a Crash Course about some of the surprising science behind building successful startups. Even though …

Silicon Flatirons is pleased to host Rally Software Chief Technology Officer, 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 of a CTO from one of the Front Range's leading companies. 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.

More in: Business , Technology
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Be the first to comment
No Downloads

Views

Total Views
1,787
On Slideshare
0
From Embeds
0
Number of Embeds
1

Actions

Shares
Downloads
0
Comments
0
Likes
4

Embeds 0

No embeds

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
    No notes for slide

Transcript

  • 1. Why Lean Startup PracticesWork & How to Scale Them
  • 2. Zach Nies
  • 3. @zachnies
  • 4. First, something to think about
  • 5. h"p://www.flickr.com/photos/oregondot/4132135156  
  • 6. Entrepreneurs have achance to create the world they want
  • 7. There is proven science that canimprove your odds of success
  • 8. What world do you want to create?
  • 9. What does that feel like?
  • 10. Success allows you tocreate the world you want and live your dreams
  • 11. Why am I here tonight?
  • 12. Success, but theyweren’t living any dream
  • 13. Discover & promotethe tools that enable success while living the dream
  • 14. How I got here
  • 15. Font Samplerhttp://media.kelbymediagroup.com/layersmagazine/images/columns/artoftype/may06/glyph-set.jpg http://en.wikipedia.org/wiki/File:Caslon-schriftmusterblatt.jpeg
  • 16. 2,500,000customers
  • 17. Vision: Civil rights and equality for all
  • 18. Vision: Reinvent collaboration
  • 19. Amazing team,exactly the culture Idreamed of creating
  • 20. Great product
  • 21. One problem:bad business
  • 22. Why am I doing this?
  • 23. Live inside the Internet
  • 24. Vision: Solve the world’s hardest problems as citizen engineers
  • 25. 14 minutes in pairs,7 minutes interviews of each person:
  • 26. You have created a computer game of entrepreneurship. You believe you can combine this game with some educational material and profiles of successful entrepreneurs to make an excellent teaching tool for entrepreneurship. Your inspiration for the product came from several reportsin the newspapers and magazines about increasing demand for entrepreneurship education.
  • 27. What information would you seekabout potential customers andcompetitors?List questions you would wantanswered.How will you find out thisinformation - what kind of marketresearch would you do?
  • 28. h"p://www.flickr.com/photos/oregondot/4132135156  
  • 29. Who would first do market research to determine how toposition the product, calculate addressable market size, and expected financial returns?
  • 30. Who is focused on identifying possible competitors?
  • 31. Who would first figure out yourpassion for the idea, what you know about the market, andwho you know? Then talk to a few people to see if you can sell a prototype?
  • 32. Who is focused on identifying possible partners?
  • 33. Remember youranswers, we will come back to this later.
  • 34. Books that informed this talk
  • 35. People who informed this talk David Max Cynthia KentSnowden Boisot Kurtz BeckFrank H. Mark Eric Knight Newman Ries Steve Blank
  • 36. Why care about theunderling principles?Aren’t there proven practices?
  • 37. Following Being the a Recipe Chef VS
  • 38. We have recipes
  • 39. For complexproblems, the recipes won’t always work
  • 40. h"p://www.flickr.com/photos/usarmyafrica/4456180555  
  • 41. What’suniqueabout hardproblems? h"p://www.flickr.com/photos/horiavarlan/4298997922/  
  • 42. What you don’tknow is unknown
  • 43. What you predict,doesn’t come true
  • 44. What workedyesterday, doesn’t seem to be working today
  • 45. How do we make sense ofenvironments like this?
  • 46. h"p://www.flickr.com/photos/virtualeyesee/6107062655  
  • 47. Some background(and a little math)
  • 48. Gaussian distributionsh"p://arxiv.org/abs/cond-­‐mat/0412004  
  • 49. Ratio of smallestto largest values?
  • 50. 4.8
  • 51. Power laws and Pareto distributionsh"p://arxiv.org/abs/cond-­‐mat/0412004  
  • 52. Ratio of smallestto largest values?
  • 53. 150,000
  • 54. Other Pareto distributionsh"p://arxiv.org/abs/cond-­‐mat/0412004  
  • 55. High impact, lowprobability events
  • 56. An example
  • 57. h"p://en.wikipedia.org/wiki/File:Sultan_Kosen_Tallest_Man_in_the_World.jpg  
  • 58. h"p://www.flickr.com/photos/jurvetson/4368494308  
  • 59. Business involves many Pareto distributions
  • 60. But wait, there’s more…
  • 61. 4 Dots
  • 62. 6 Connections
  • 63. 64 Patterns
  • 64. 10 Dots
  • 65. 45 Connections
  • 66. ? Patterns
  • 67. Patterns35,184,372,088,832
  • 68. In business a fewpatterns are more valuable than all the rest
  • 69. but which ones?
  • 70. h"p://www.flickr.com/photos/virtualeyesee/6107062655  
  • 71. How do we make sense of this?
  • 72. Plausible ProbableUnordered Ordered
  • 73. Plausible ProbableUnordered Ordered
  • 74. Plausible ProbableChaotic Complex Complicated SimpleUnordered Ordered
  • 75. An examplePlausible Probable Chaotic Complex Complicated SimpleUnorderedh"p://www.flickr.com/photos/ksionic/383240468   Ordered
  • 76. Plausible Probable Complex ComplicatedChaotic SimpleUnordered Ordered
  • 77. Plausible Probable Complex Complicated Chaotic SimpleUnordered Ordered
  • 78. Plausible Probable Complex Complicated Chaotic SimpleUnordered Ordered
  • 79. Plausible Probable Complex Complicated Cause & Effect is obvious to all and is repeatable Chaotic SimpleUnordered Ordered
  • 80. Plausible Probable Complex Complicated Cause & Effect is not obvious and requires analysis or expertise Chaotic SimpleUnordered Ordered
  • 81. Plausible Probable Complex Complicated Cause & Effect is only coherent in retrospect, and not repeatable Chaotic SimpleUnordered Ordered
  • 82. Plausible Probable Complex Complicated Cause & Effect not perceivable Chaotic SimpleUnordered Ordered
  • 83. The Cynefin Framework Complex Complicated Cause & Effect is only Cause & Effect is not coherent in obvious and requires retrospect, and not analysis or expertise repeatable Disorder Cause & Effect is Cause & Effect not obvious to all and is perceivable repeatable Chaotic SimpleUnordered Ordered
  • 84. How about an example?
  • 85. Music Industry in 2000 - Napster Complex Complicated Independent Managing a large tour musicians self publishing online Disorder Managing a NIN tour Major label online distribution CD distribution Chaotic SimpleUnordered Ordered
  • 86. What does thisimply about taking action?
  • 87. Probe, Sense, Respond Sense, Analyze, RespondComplex Complicated DisorderChaotic Simple Act, Sense, Respond Sense, Categorize, Respond
  • 88. Probe, Sense, Respond Sense, Analyze, RespondComplex Complicated Disorder Standard procedures Process re-engineeringChaotic Simple Act, Sense, Respond Sense, Categorize, Respond
  • 89. Probe, Sense, Respond Sense, Analyze, RespondComplex Complicated Analysis Planning Many expert opinions DisorderChaotic Simple Act, Sense, Respond Sense, Categorize, Respond
  • 90. Probe, Sense, Respond Sense, Analyze, RespondComplex Complicated Frequent experiments Pattern matching Exploring hunches DisorderChaotic Simple Act, Sense, Respond Sense, Categorize, Respond
  • 91. Probe, Sense, Respond Sense, Analyze, RespondComplex Complicated Disorder Crisis management Innovation managementChaotic Simple Act, Sense, Respond Sense, Categorize, Respond
  • 92. Probe, Sense, Respond Sense, Analyze, RespondComplex Complicated 15 - 30 < 150 Disorder 5 > 150Chaotic Simple Act, Sense, Respond Sense, Categorize, Respond
  • 93. An example
  • 94. EntrepreneurshipComplex Complicated Disorder  Chaotic Simple
  • 95. Complex Domain Probe, Sense, Respond Cause & Effect is only Frequent experiments apparent in Pattern matching retrospect, and not Exploring hunches repeatable 15 – 30 people
  • 96. What is ourboundary?
  • 97. Vision & Empathy  
  • 98. h"p://www.flickr.com/photos/virtualeyesee/6107062655  
  • 99. The journey starts with vision and empathy
  • 100. “He knows the ‘why’ for his existence, will be able to bear almost any ‘how.’ Viktor Frankl
  • 101. In pairs for 2 minutes:Think about the world you want to create. Describe it. Also,what does it feel like?
  • 102. Manage theemergence of beneficial coherence
  • 103. Coevolution
  • 104. Probe, Sense, Respond
  • 105. Probe, Sense, RespondA $40 example
  • 106. Successful MBASerial StudentsEntrepreneurs
  • 107. You have created a computer game of entrepreneurship. You believe you can combine this game with some educational material and profiles of successful entrepreneurs to make an excellent teaching tool for entrepreneurship. Your inspiration for the product came from several reportsin the newspapers and magazines about increasing demand for entrepreneurship education.
  • 108. 1.  Who could be your potential customers for this product?2.  Who could be your potential competitors for this product?3.  What information would you seek about potential customers and competitors - list questions you would want answered.4.  How will you find out this information - what kind of market research would you do?5.  What do you think are the growth possibilities for this company?
  • 109. Probe, Sense, Respond
  • 110. Validated LearningEric Ries
  • 111. Design Thinking
  • 112. h"p://www.flickr.com/photos/virtualeyesee/6107062655  
  • 113. How do youmanage complex systems?
  • 114. “The only valid model of a complex system is the system itself. Murray Gell-Mann
  • 115. Finely Grained Objects
  • 116. Small teams 5 - 30
  • 117. Small experiments
  • 118. Meaning emerges through interaction
  • 119. Get out of the building!
  • 120. Learn throughexperiments that are safe to run
  • 121. Hard forstartups
  • 122. Hard forcompanies
  • 123. How do you make $600 Million in 2010?
  • 124. Hundreds of A/Bexperiments at all times
  • 125. Maximize learning – Don Reinertsenhttp://jchyip.blogspot.com/2010/05/lean-software-and-systems-conference.html
  • 126. How small shouldexperiments be?
  • 127. Chip flip game
  • 128. The power ofsmall batches
  • 129. The power of Agile
  • 130. Waterfall“Managing the Development of Large Software Systems”Dr. Winston W. Royce – 1970
  • 131. Waterfall All Features in Release“Managing the Development of Large Software Systems”
  • 132. Waterfall All Features in Release“Managing the Development of Large Software Systems”
  • 133. Waterfall All Features in Release“Managing the Development of Large Software Systems”
  • 134. Iterative Feedback
  • 135. Scrum Framework Backlog Standup Grooming Iteration Demo / Review Planning & Retrospective Iteration Product Iteration Product Backlog Backlog Increment
  • 136. Focus on Stories Stor y Stor y Stor y 1 2 3 All Storiesin Iteration All Stories in Iteration All Stories in Iteration
  • 137. Flow of valueVision Design In Done Deployed What was Development learned?
  • 138. h"p://www.flickr.com/photos/virtualeyesee/6107062655  
  • 139. Distributed Cognition
  • 140. Wise Crowd
  • 141. Wise CrowdDiversityIndependenceDecentralizationAggregation
  • 142. Wise CrowdFrancis Galton
  • 143. An experimentCount the passes the white team makes
  • 144. An experiment How many passes?
  • 145. An experimentWhat else did you notice?
  • 146. SelectiveAttention Bias
  • 147. Change Blindness
  • 148. Disintermediation
  • 149. Help everyone detect weak signals
  • 150. Share raw datafrom experiments with everyone
  • 151. Democratizeinformation
  • 152. h"p://www.flickr.com/photos/virtualeyesee/6107062655  
  • 153. A case study
  • 154. Jerome Breche, CEO
  • 155. Scaling these concepts
  • 156. What is Lean?
  • 157. h"p://reallycoolthings.net/2010/06/10/lean-­‐and-­‐agile/  
  • 158. Lean is … Organizational Learning System OperatingPeople System System Frode  L.  Odegard,  Lean  SoTware  InsVtute  
  • 159. Making sense at scale
  • 160. At a startupComplex Complicated Disorder  Chaotic Simple Idea/Market Fit – Code Base – People/Org
  • 161. New product inside big companyComplex Complicated   DisorderChaotic Simple Idea/Market Fit – Code Base – People/Org
  • 162. Applying thiswith your team
  • 163. Does everyone know why?h"p://www.flickr.com/photos/lejoe/2800660239  
  • 164. No death marchesh"p://www.flickr.com/photos/west_point/5566824566   h"p://www.flickr.com/photos/elcapitan/2387917709  
  • 165. Cut debt days h"p://www.flickr.com/photos/consumerist/4406234952  
  • 166. Learn from setbacks h"p://www.flickr.com/photos/cakesquared/3819067260  
  • 167. Small experimentsh"p://www.flickr.com/photos/denisecarbonell/5593039053  
  • 168. Retrospectives What S What has What HYPOTHESE HELPED HIND has could we ERED us?! us?! draw about how we move forward?!
  • 169. Publicize what you learnh"p://www.flickr.com/photos/lorenkerns/4114441322  
  • 170. Every situation isn’t the same
  • 171. h"p://www.flickr.com/photos/virtualeyesee/6107062655  
  • 172. Entrepreneurs have achance to create the world they want
  • 173. There is proven science that canimprove your odds of success
  • 174. Pick 2 concepts from tonight
  • 175. Take them back to your team
  • 176. Create the world you want
  • 177. h"p://www.flickr.com/photos/fla"op341/224597838