Starting Lean - Running an Agile Enterprise

Agile Process Improvement
Starting Lean
Based on Ash Maurya’s book Running Lean
Presented by
Russ “The Agiliser” Lewis
russ.lewis@storm-consulting.com
www.storm-consulting.com
© Storm Consulting 2014. All rights reserved. Not to be reproduced without prior written consent.
1

2

Agenda
Lean canvas
Prioritisation
Validation
Summary
Appendices
3

Summary of Running Lean
• Document your “plan A” using Lean Canvas
• Identify the riskiest parts of the plan
• Systematically test your plan
• Iterate
– Build, measure, learn
4
“Running Lean is a systematic process for iterating from plan A
to a plan that works.”
Ash Maurya, Running Lean

Lean Canvas
• Lean technique for mapping a business plan
– Fast, cheap, and without waste
– But customer is not involved
• Ideal for
– Defining a product / service for development
– Creating the business model for start-up
– Reviewing and refining a growth opportunity
• Output is a validated business roadmap
– “Investable” at stage 1 - family, friends and fools
5

Lean Canvas Template
6
Problem
Competition
Solution
Metrics
Unique Value
Proposition
High level
concept
Unfair
Advantage
Channels to
Market
Customer
Segments
Early adopters
Costs (fixed / direct) Revenue Streams
1
4
8
9
5
3 2
67

Model each Segment / Product
7

Agenda
Lean canvas template
Prioritisation
Validation
Summary
Appendices
8

Prioritisation of Models
• Select ONE business model to focus-on
– Assess your customer’s pain
• Value “must-have” problems
– Favour channels that are easier to access
– Consider the margins & market size
– Feasibility
9

3 Sets of Risks
10
Problem
Competition
Solution
Metrics
Unique Value
Proposition
High level
concept
Unfair
Advantage
Channels to
Market
Customer
Segments
Early adopters
1 2
4 3
3 1
24
21
3
4

“Right Product” Risk
1. Problem worth solving?
2. Define Minimal Viable
Product (MVP)
3. Build MVP to validate &
demonstrate UVP
4. Verify at large scale
11
Problem
Competition
Solution
Metrics
Unique Value
Proposition
1 2
4
3
 Solution fits the Problem

“Path to Customer” Risk
12
Unfair
Advantage
Channels to
Market
Customer
Segments
Early adopters
3
1
2
4
1. Identify who is feeling the pain
2. Who really wants an answer now?
3. Define the early channels
4. Identify scalable inbound channels
 Product fits the Market

“Is it a Viable Business” Risk
13
Problem
Competition
24
1
3
1. Competition / alternatives / price
2. Test pricing through verbal commitment
3. Test pricing through sign-ups
4. Optimise cost structure
- to make the business work
 Scalable (investable) business

Agenda
Prioritisation
Validation
Summary
Appendices
14

Investing in the Next Level
• Move from “good idea” to “good idea for a business”
– Requires entrepreneurship
• Running an Agile business
– Customer involvement essential
– Iteration inevitable
• Output is a validated business
– “Investable” at stage 2 by real investors
• Although you will likely turn them away
15

A Systematic Approach
1. Understand the problem via face to face (problem) interviews
– Problem worth solving?
– Who has this problem?
– How is it solved today?
2. Define the solution - conduct solution interviews
– Customer demo of mock-up or visualisation
– Will the solution work?
– Who are the early adopters?
– Does the pricing model work?
3. Concurrently build MVP, marketing site and define sales funnel
16

A Systematic Approach Contd
4. Validate qualitatively – MVP interview
– Build MVP and soft-launch to early adopters
– Do they recognise the UVP?
– Will they provide testimonials
– Are there enough pull / early adopters to support conversion learning?
– Define and monitor conversion funnel
5. Verify quantitatively
– Launch (MVP) to larger audience
– Tweak model to improve prospect acquisition
– Plan how the business will scale
17

Interview Guidelines
• Build a frame around learning, not pitching
– Mostly listening, bring someone to make notes
– Probe for evidence, not anecdotes
– Testable hypotheses
• Wide selection of interviewees initially
– Start with people you know, ask for introductions from them
– 30-60 interviewees
– Script email requests for interviews
– Outsource interview scheduling
• Follow a script
• 20-30 mins
18

Interview Validations
19
Problem
Current
solutions
Solution
Metrics
Unique Value
Proposition
High level
concept
Unfair
Advantage
Channels to
Market
Customer
Segments
Early adopters
PI
PI
SIPI
SI
SI

Problem Interview Exit Criteria
• Can identify demographics of an early adopter
• Have a must-have problem
• Can describe how customers solve the problem today
• Have interviewed at least 10 people
20

Solution Interview Structure
21

Solution Interview Exit Criteria
• Can identify demographics of an early adopter
• Have a must-have problem
• Can define minimum features needed to solve this problem
• Have a price the customer is willing to pay
• Can build a business around it
22

Problem Interview Structure
23

Distil UVP
• Learning to date refines the Unique Value Propositions
– Informs the Unfair Advantage too
24
Problem
Current
solutions
Solution
Metrics
Unique Value
Proposition
High level
concept
Unfair
Advantage
Channels to
Market
Customer
Segments
Early adopters
PI
PI
SIPI
SI

Define, Develop & Deliver MVP
• Define Minimum Viable Product
– Must-have features only
– Everything else goes on the backlog
– Resist new features
• Features must be “pulled”
– By customers
• Focus on delivering the minimum
– Faster delivery = rapid learning
– This is a learning stage
– Use continuous deployment
25
Problem
Current
solutions
Solution
PI
PI
SI

Sales Funnel - “Pirate Metrics”
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Acquisition
Activation
Retention
Revenue
Referral
Users find you
Great first experience
Users return for more
Getting paid
Users tell other users
Pirate Metrics are Dave McClure’s term – they spell AARRR

Acquisition Sub-funnel
• Acquisition involves
marketing website
• Customer path
– From 1st landing to
interested prospect
• 1 Page per step
– Primary call to
action = next step
– Secondary call =
more information
27

Activation Sub-funnel
• Activation is
customer’s first activity
• Architect the flow for
learning
– Iterate to get it right
– Optimise it later
28

Track Metrics
• Track acquisition, activation and revenue
• “Cohorts” track specific activities
29

MVP Interview
• Last of the three start-up validation interviews
– Final learning stage before scale-up
– Validation of a good business idea
30

MVP Interview Validations
31
Problem
Current
solutions
Solution
Metrics
Unique Value
Proposition
High level
concept
Unfair
Advantage
Channels to
Market
Customer
Segments
Early adopters
MVP
I
MVP
I
MVP
I

MVP Interview Structure
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MVP Interview Exit Criteria
• MVP demonstrates and delivers UVP
• Price is right
• Validate UVP on marketing website
• Customers make it through to activation
• Channels will drive sufficient acquisitions
• MVP will drive sufficient conversions to revenue
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Agenda
Prioritisation
Validation
Summary
Appendices
34

Summary
• Running an Agile Business is a learning process
– Plan A is a starting point
– It’s OK to be wrong, as long as you learn from it
– Always update your canvas
• Customer engagement is crucial
– Validate assumptions
– Improve messages
– Prove the market
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Calls to Action
• Buy the book – it’s an inspiration
– Includes introduction email, and full interview scripts
– Ash gets the royalties for his work and the graphics I have shown
• Tell me the problems you are facing right now
– I’m a registered and approved GrowthAccelerator coach
• Sign-up for the Storm Consulting blog
– Loaded with Agile goodness for firms of all sizes and experience
36

Starting Lean - Running an Agile Enterprise

Starting Lean - Running an Agile Enterprise

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