Angel Day 2013 - Lean Startup: How to get business value earlier with less risks


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The myth goes that the more perseverance, brilliance, good timing and a good product, the higher the chance for success. I will show you why exactly the opposite is true: Survival and, even more so, success are highly correlated with the successful application of the "Build-Measure-Learn Feedback Loop". The fact that this lean framework can be learned and taught is the final kill of the myth. I will give examples of how you can deliver more business value earlier and with less risks by testing everything as soon as possible using a so-called Minimum Viable Product.

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  • My vision is to establish L.Startup as the standard for entrepreneurs and investors in CH.
    Talk early phase Startups: Idea, Concept (ab hier), Firm (ab hier Investition), growth and with strong focus on soft facts
  • Economist and BA: Entrepreneur, who failed several times;
    Agile mgt.: Mitarbeitende schaffen in dezentralen, selbstorganiserten und organisationsübergreifenden Teams, demonstrieren am Ende von kurzen Iterationen dem Kunden ihre Resultate und verbessern sich mit Hilfe deren Feedback kontinuierlich.
  • Collaboration and sharing
  • Flipp Chart: What should be covered that you think that your investment to participitate paid off? Inspect and adapt
  • How I learnt about it ....
    All members of the same family: They share the same PDCA-DNA
  • We get business value earlier, if we increase survival rate, fail early. This increases the capital efficiency of our investment portfolios.
    Capital efficiency: figure out as quickly as possible to build the right product for which the customer will pay for.
  • 2 distinctively different ways: like black and white
    Conventional: exc. Plan an and exc. execution of plan by good people, cool idea and then perseverance
    Jeffrey Liker, The Toyota Way, 2003: What distinguishes the Toyota Way from other mgt. approaches
  • Cowboy Mentality
    - especially ETH startups
    - Assumptions not clear; Fact sheets
    - eg. Startup founder team arguing about US strategies: yes, you should think big, but apply genchi gembutsu
  • Its the boring stuff that matters – here perseverance
    This presentation is an MVP
  • StartAngels Website: First Trial of Lean Startup
    Entrepreneurs hip, Mgt. dull. Boring stuff like innovation accounting. Here perserverance is king. MVP: e.g. a designer produces a new chair on which you can not sit.Innovation accounting: how to measure progress, how to set-up milestones, and how to prioritise work.
    Head Marketing: Do you know Lean Startup? Sure. Do you know Split- or A/B Testing? Sure. Are we doing it? No. Why. Because, we have no time ...
  • Cost of sales: no. of visits until closing
    No BP, just xls sheetGG instead of big consulting firms. Pattern after 5 Interview was set
  • Nick Swinmurn: Took picture in store; put it online; customer sent email; Nick went to the store and bought the shoe at label price.
  • Entrepreneurial Mgt: Stupid! It‘s the boring stuff, that matters most!
  • See Example von Adrian
  • Drew Houston, CEO; leap-of-faith assumptions: the part on which everything depends.
    Video, because it was difficult to explain the concept and it was impossible to demo the SW in a prototype.
  • Startup aimed to become service provider in an emerging business called “precision agriculture”. So they looked for money to build a Drone, with special camera and SW to get the best data.
    MVP: Rent camera and plane instead of building a drone and offer the images to farmers.
    Lessons learned
    A minimum viable product is not always a smaller/cheaper version of your final product
    Think about cheap hacks to test the goal
    Great founders keep their eye on the prize
  • Flipp Chart: Go back and check if the expectations are met.
  • Steve Blank bildet alle Business Schools, Colleges, Technoparks, Incubators, etc. aus
    I can imagine that from now on you will ask Startups different questions. Right?
  • Open View Ventures, Venture Capital Company: welche Prozessverbesserungen seit dem letzten Board Meeting
  • Angel Day 2013 - Lean Startup: How to get business value earlier with less risks

    1. 1. Lean Startup: How to get business 11.12.2013 value earlier w ith less risks Fredi Schmidli SIX Swiss Exchange Zürich, 11.12.2013 h=p:// 1
    2. 2. Fredi Schmidli 11.12.2013 • Business Angel and Boardmember: • Entrepreneur • Community Builder: -­‐­‐startup-­‐Zurich/ -­‐ Agile Breakfasts h=p:// 2
    3. 3. Content • Goals • Two 11.12.2013 different ways • ConvenBonal way • Lean Startup way • Examples for Lean Startup ApplicaBons • Conclusions • See presentaBon on Slideshare Based on the Book: The lean startup, Eric Ries, 1st ed. 2011 h=p:// 3
    4. 4. Your expectations? • ... 11.12.2013 ? • ... ? • ... ? h=p:// 4
    5. 5. Collective experience? • Who 11.12.2013 heard about • Lean Manufacturing? • Scrum/Kanban? • Lean Startup? • Who worked with it? h=p:// 5
    6. 6. Goals • Increase 11.12.2013 survival rate • 60% last 3 years, 35% last 10 years (US: h=p://­‐von-­‐startups/) • 66% last 3 years, 50% last 5 years h=p:// bfs/portal/de/index/themen/06/02/blank/key/02/ueberlebensraten.html • 56% losses in 3.5, 10% bring 80% return in 7 years (UK: Nesta-­‐Studie 2009 mit BBAA and more than 1000 firms) • Fail early • Increase capital efficiency of pordolio h=p:// 6
    7. 7. There are 2 ways 1. ConvenBonal way 11.12.2013 or do the things right • AssumpBon: machine, excellent plan and execuBon • Focus: Perseverance myth • Example: most Startups 3. Lean startup way or do the right things • AssumpBon: Dynamic systems require self-­‐organisaBon • Focus: Genchi Gembutsu • Example: Zappos, Dropbox, ... h=p:// 7
    8. 8. Conventional way • Culture: 11.12.2013 „Cowboy Mentality“ -­‐ „Paralysis by Analysis“ • Method: Planning more important than experiments • Goal: best product possible • CharacterisBcs -­‐ symptoms: • Which product can we build with this technology? • Long business plans with hockey sBck figures • Need funds for sales & markeBng boost • Long discussions about plans or features h=p:// 8
    9. 9. Lean startup way • Culture: 11.12.2013 Success can be engineered, learned, taught • Pre-­‐requisites: Transparency, trust and courage • Method: Short feedback loop • Goal: MVP asap and minimise cycle Bme • CharacterisBcs • Can we build a sustainable business? • Business Model Canvas • Every product, markeBng campaign, etc. is experiment 17.09.2013 h=p:// 9
    10. 10. Feedback loop Entrepreneurial Mgt: Stupid! It‘s the boring stuff, ... 11.12.2013 10 Turn ideas in ...... Minimum viable Product (MVP) InnovaBon accounBng Pivot or persevere? h=p://
    11. 11. Examples 1. Test BP assumpBons for TM app: price, cost of sales Pivot to public health? 11.12.2013 11 Interview MDs by pig MVP: QuesBonnaire & live demos 70 interviews & pa=ern h=p://
    12. 12. Examples 2. Test business model for Zappos 11.12.2013 12 MVP: Put picture of shoe online h=p://
    13. 13. Examples 11.12.2013 13 2. New busines model AND proven service model h=p://
    14. 14. Examples 3. Test vision for flat TV 11.12.2013 14 MVP h=p://
    15. 15. Examples 4. Test vision of service offering for Dropbox 11.12.2013 15 MVP: Video h=p://­‐an-­‐introducBon/#more-­‐1819/ h=p://
    16. 16. Examples 5. Test business model for Drone based imaging system MVP: Rent camera and plane instead of building a drone h=p://­‐mvp-­‐is-­‐not-­‐a-­‐cheaper-­‐product-­‐its-­‐about-­‐smart-­‐learning/ 11.12.2013 16 h=p://
    17. 17. Expectations met? • Yes? • Somehow? • No? 11.12.2013 h=p:// 17
    18. 18. Conclusions • Genchi 11.12.2013 Gembutsu, experiment and succeed or ... ? • Be courageous and transparent • Can we build a sustainable business? • MVP and Business Modell Canvas change everything • Minimise TOTAL Bme through the loop • Standard for Business Angels and Entrepreneurs • Good luck by applying it this arernoon J. h=p:// 18
    19. 19. More information Fredi Schmidli fredi@pragmaBc-­‐ Steve Blank: h=p://­‐the-­‐lean-­‐start-­‐up-­‐ 11.12.2013 changes-­‐everything/ar h=p:// 19