I would like twenty minutes of your time in which I will present 50 (I know a lot) slides to review 12 Models related to Lean Startup so that I can then introduce the
‘Startup Business Planning Jigsaw’.
The twelve models are:
► Business Model Canvas - Alexander Osterwalder
► Search v's Execution - Steve Blank & Bob Dorf
► Build-Measure-Learn - Eric Ries
►Three Stages of a Startup - Ash Maurya
► MVP and Product Market Fit
►Lean Canvas - Ash Maurya
► Customer Development - Brant Cooper and Patrick Vlaskovits
► Startup Pyramid – Sean Ellis
►Get Keep Grow – Steve Blank & Bob Dorf
► Pirate Metrics – Dave McClure
►One Metric that Matters - Croll & Yoskovitz
2. I would like twenty minutes of your time in
which I will present 50 (I know a lot) slides to
review 12 Models related to Lean Startup so
that I can then introduce the
‘Startup Business Planning Jigsaw’.
Donncha Hughes – Feb 2015
3. 3
Lean Startup is about getting you to
focus on the right thing, at the right
time, with the right mindset.
Lean Analytics: Use Data to Build a Better Startup Faster –
Alistair Croll & Benjamin Yoskovitz
4. Search v’s Execution – Steve Blank & Bob Dorf
Three Stages of a Startup – Ash Maurya
Lean Canvas – Ash Maurya
MVP and Product Market Fit -
Customer Development – Brant Cooper and Patrick Vlaskovits
Get Keep Grow – Steve Blank & Bob Dorf
Pirate Metrics – Dave McClure
Engines of Growth – Eric Ries
Build – Measure – Learn Cycle – Eric Ries
Startup Pyramid – Sean Ellis
Business Model Canvas – Alexander Osterwalder
10
11
1
2
3
4
5
6
7
8
9
A
G
E
N
D
A
One Metric That Matters – Croll & Yoskovitz12
5. Business Model Canvas1
72 Page Preview available
http://www.businessmodelgeneration.com/downloads/businessmodelgeneration_preview.pdf
The right side of
business model canvas
emphasizes value
while the left side is
predominantly cost
driven.
Financial
considerations (costs,
revenues) are on the
bottom and
value is at the centre
with connections to
partners and
customers.
6. A lot of ‘business
planning’ required by
startups.
6
7. Every element of your
Business Model must be
tested and validated.
7
8. P143 The Startup Owner’s Manual: The Step-by-Step Guide to Building a Great
Company – Steve Blank & Bob Dorf
Search v’s Execution2
8
9. Entrepreneurs now understand the
problem, namely that startups are not
simply smaller versions of large companies.
Companies execute business models where
customers, their problems, and necessary
product features are all “knowns”. In sharp
contrast, startups operate in “search
mode”, seeking a repeatable and profitable
business model.
The Startup Owner’s Manual:
The Step-by-Step Guide to Building a Great Company
– Steve Blank & Bob Dorf
9
10. A Startup?
Is a human institution designed to deliver a new
product or service under conditions of extreme
uncertainty
Eric Ries – The Lean Startup: How constant Innovation
Creates Radically Successful Businesses
10
11. If you feel like you don’t
know everything at this
stage that is ok…. And
the feeling won’t go
away!
11
12. And Don’t believe
the Myth of the
Visionary ….
The Lean Entrepreneur, how visionaries
create products, innovate with new
ventures, and disrupt market by Brant
Cooper and Patrick Vlaskovits, Foreword by
Eric Ries, illustrations by @fakegrimlock
that someone can predict the
future and then bring it to
fruition. In reality the visionary is
likely someone who is not
committed to a specific scenario,
but rather seeks change and
seizes present opportunities and
relentlessly pursues the change
13. How are
opportunities to
be grasped – what
is the rule or guide
book, is there an
optimal process to
follow?
13
15. • Startups are experiments … to discover new
sources of growth
• Somewhat easier to start these days …
BUT
• Startups consume a lot of resources
• And most startups/products still FAIL!
Ash Maurya,
Running Lean
16. most startups fail not because they don’t
manage to develop and deliver a product to
the market; they fail because they develop
and deliver a product that no customers
want or need.
Steve Gary Blank – The Four Steps to the Epiphany: Successful
Strategies for Products that Win
16
17. Build-Measure-Learn-Feedback
Loop
3
The faster your organisation iterates
through the cycle, the more quickly you
will find the right product and market.
Build-Measure-
Learn Cycle
applies to
everything you
do, from
establishing a
vision to building
product features
to developing
channels and
marketing
strategies
18. There are no facts inside
your building, so get
outside
Rule #.1 of the Customer Development Manifesto as detailed in The
Startup Owners Manual
19. Talking to Humans, Success starts with
understanding your customers GIFF
CONSTABLE with Frank Rimalovski
illustrations by Tom Fishburne and foreword
by Steve Blank
20. 3 Stages of a Lean Startup4
Problem/Solution
Fit
Product/ Market
Fit
Scale
Stage 1 Stage 2 Stage 3
How do I accelerate growth?
Ideal time to raise funding
Problem worth solving?
Running Lean: Iterate from Plan A to a Plan that
Works, Ash Maurya (The Lean Series – O’Reilly)
21. What is a Lean Startup?
• Uses fast, iterative development practices
to:
1. Validate core hypotheses (customer problem-
solution).
2. Develop the minimum viable product.
3. Achieve Product-Market fit.
4. Produce a development and marketing
roadmap for scaling.
21
22. Stage 1 – Problem/Solution Fit
• The first stage is about determining whether
you have a problem worth solving before
investing months or years of effort into
building a solution:
– Is it something customers want? (must have)
– Will they pay for it? If not, who will? (viable)
– Can it be solved? (feasible)
22
24. Minimum Viable Product
• A product with the fewest number of
features needed to achieve a specific
objective, and users are willing to “pay” in
some form of a scarce resource.
Steve Gary Blank – The Four Steps to the
Epiphany: Successful Strategies for Products
that Win
24
Concept (Slides) Design & Spec Manual
Configuration
Demo Beta
PROTOTYPE CONTINUUM
Alpha
First production run
LAUNCHIDEA
26. Product Market Fit
• When a product shows strong demand by
passionate users representing a sizable market.
“achieving Product-Market fit requires at least
40% of users saying they would be “very
disappointed” without your product.
Sean Ellis – Lean Startup Marketing : Agile Product
Development, Business Model Design, Web Analytics,
and Other Keys to Rapid Growth [Kindle Edition]
26
27. The three stages of a Startup cont.
Problem/Solution
Fit
Product/ Market
Fit
Scale
Stage 1 Stage 2 Stage 3
Focus: Validated Learning
Experiments : Pivots
Focus: Growth
Experiments :
Optimizations
27
A pivot is a change in strategy that is
grounded by learning
28. Lean Canvas …. Leanstack.com6
PROBLEM SOLUTION
KEY METRICS
UNIQUE
VALUE
PROPOSITION
COST STRUCTURE REVENUE
UNFAIR
ADVANTAGE
CHANNELS
CUSTOMER
SEGMENTS
PRODUCT MARKET
Source : p.27 Running Lean, Ash Maurya
Top 3
problems
Top 3 features
Key activities
you measure
Single clear
compelling
message that states
why you are
different and worth
paying attention
Target
Customers
Can’t be easily
copied or bought
Path to
Customers
Customer Acquisition Costs
Distribution Costs
Hosting
People etc
Revenue Model
Lifetime Value
Revenue
Gross Margin
Existing
Alternatives
Early
Adopters
BREAKEVEN
29. • What separates successful startups from
unsuccessful ones is not necessarily the
fact that successful startups begin with a
better initial plan (or Plan A) but rather
that they find a plan that works before
running out of resources.
Ash Maurya– Running Lean: Iterate from Plan A to a Plan that
Works
30. Document your Plan A Systematically test
your plan
Identify the Riskiest
Parts of Your Plan
• Document your Plan A
• Share your Plan A … identify the riskiest parts of
your plan(s)
• Systematically test the Plan
Roadmap for Running Lean
37. Race up the Pyramid
• Promise: Highlight the benefits described by
your “must have” users (those that say they
would be very disappointed without your
product).
• Economics: Implement the business model
that allows you to profitably acquire the most
users.
• Optimize: Streamline a repeatable, scalable
customer acquisition process by testing
multiple approaches and tracking to improve
the right metrics.
38. Deliver on the promise
• Extreme customer support … go beyond
expectations will drive customer loyalty and
enhance WOM.
• Brand experience over brand awareness …
obsess over every element of the customer
experience
For more see http://startup-marketing.com/milestones-to-
startup-success/
39. Get Keep Grow Model9
‘Get Keep Grow’ for Web Mobile Figure 3.10
Startup Owner’s Manual
40. Acquisition
Activation
Retention
Revenue
Referral
How do users find you?
Do users have a great
first experience?
Do users come back?
How do you make money?
Do users tell others?
Before
Product
Market Fit
Dave McClure’s AARRR Pirate Metrics
as presented by Ash Maurya
10
For more see http://www.slideshare.net/dmc500hats/startup-
metrics-for-pirates-long-version
41. • Acquisition describes the point when you turn an
unaware visitor into an interested prospect
• Activation describes when the interested
customer has her first gratifying user experience
• Retention measures ‘repeated use’ and/or
engagement with your product.
• Revenue measures the events that you get paid
• Referral is a more advanced form or a user
acquisition channel where your happy customers
refer or drive potential prospects into your
conversion funnel.
41
42. 11 Engines of Growth help identify Product
Market Fit
• The moment when a startup finally
finds a widespread set of customers
that resonate with the product
• Easy to recognise when it happens
but not so easy to know how far off a
particular company is from reaching
its Product Market Fit.
43. Three Engines of Growth
I. Sticky .. when the rate of new customer
acquisition exceeds the churn
II. Viral .. Growth happens as a consequence
of customers using the product.
III. Paid .. ROI on marketing activity.
44. What to measure?
Depends on Your Engine of Growth
I. Sticky .. rate of new customer acquisition
versus the churn.
II. Viral .. How many new customers will use
the product as a result of each new
customer who signs up.
III. Paid .. Customer acquisition costs relative
to lifetime value.
45. Success looks like …
Depends on Your Engine of Growth
I. Sticky .. Widening gap between new customers
minus churn over short periods
(day/week/month).
II. Viral .. Is viral coefficient increasing? A viral
coefficient of 0.9 is very close (every ten people
bring in around 9 e.g every person invites 3
people and in 9 of 10 cases 1 of those 3 joins)
III. Paid .. Are customer acquisition costs reducing
relative to lifetime value.
46. Your Engine of Growth Helps
Prioritise Startup priorities
I. Sticky .. Focus development efforts on
customer usability.
II. Viral .. Focus development efforts on
customer sign up and user flow
optimisation to increase conversion.
III. Paid .. Focus on getting Sales & Marketing
right.
48. One Metric That Matters
• Do you know your One Metric That Matters
.. Read chapter 6
• Beware of Vanity Metrics
Lean Analytics: Use
Data to Build a Better
Startup Faster, Alistair
Croll & Benjamin
Yoskovitz (The Lean
Series – O’Reilly)
12
49. Lean frameworks to think
about your business
• Start with the Lean Canvas, to help you map
out the components of your business model
so you can evaluate and test them.
• Engage in Customer Development
– Think about the Startup Pyramid and the Get
Keep Grow Model to identify how you will
acquire and retain customers to drive business
growth.
• Identify your Engine of Growth, Pirate Metrics
and One Metric that Matters to clarify startup
stage and agree priorities.
C
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S
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N
52. • The idea origins of the problem and solution
• Lean Canvas sketches details of the business
model
• The Promoter/ Team domain knowledge,
credibility and track record (plus advisors)
• Customer Development/ Market Validation
start testing the canvas
• MVP (Solution) start charging
• Business Model Validation 9 building blocks
• Learning market product customers strategy
• Lean Metrics measure for results and decisions
• Business Action Plan for investors (and own
team)
53. Read full article on Startup Business Planning Jigsaw
by Donncha Hughes on LinkedIn Pulse.
54. Donncha Hughes
Startup Mentor, Advisor & Trainer
• Trainer – e.g. New Frontiers in GMIT, DKIT, and LyIT/ IT Sligo
• Areas of Expertise – Marketing, Sales, Business Plans, R&D
Applications, Projections.
• Mentor – LEO Galway, Enterprise Ireland, SCCUL
• Member of EI Competitive Start Evaluation Panel
• Member InterTrade Ireland Seedcorn Business Plan Evaluation
Panel.
• Non Executive Director of an Irish Tech startup
• Former Manager of Incubation Centre
• 7.5 years with IBEC
www.startuphughes.com
www.startuphughes.com/blog