How to Build a Startup
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Introductory talk on Lean Startup - given in Drogheda, Ireland at the Mill, The Enterprise Centre, 03 Feb 2016
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How to Build a Startup
- 1. RAOMAL PERERA raomal@LeanDisruptor.com | @raomal @LeanDisruptor | www.facebook.com/LeanDisruptor How to Build a Startup – Introduction #LEANSTARTUP
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- 8. Lean Startup Dublin Meetup launched Jan 2012 – now over 1,000 members Workshops run by Ash Maurya, John Mullins, Brant Cooper, Mary Cronin & Raomal Perera Talks on Lean Startup, Social Media, Agile, Fund Raising, How to Build a Startup, Lego Serious Play, Lean in Corporates, Crowd Funding, Cartier Women’s Initiative Award (CWIA) LeanCamp Lean Startup Dublin Meetup http://www.meetup.com/Lean-Startup-Dublin/ 8
- 9. Lean Launchpad Programme 9 Entrepreneurs Create Jobs – Can We Help Them Increase Their Chance Of Success?
- 10. Lean Launchpad programme – (elements) 10
- 11. Playing Lean – The Board Game 11
- 12. Often (first-time) entrepreneurs feel that step 1 involves writing a business plan/building a slide deck and getting funded! 12 12
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- 15. Problem/ Solution Fit Product/ Market Fit Scale The 3 Steps 15 15
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- 17. 17 Finding the Problem is the Hard Part – Kevin Systrom & Mike Krieger (Instagram Co_Founders) Instagram Co-Founder Kevin Systrom believes building solutions for most problems is the easy part; the hard part is finding the right problem to solve. Here he opens up about how he and fellow Co-Founder Mike Krieger identified the problems they wanted to solve around sharing photos through mobile devices. He also reminds entrepreneurs to embrace simple solutions, as they can often delight users and customers.
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- 21. Problem/Solution Fit Product Market Fit Scale Focus: Validated Learning Experiments: Pivots Focus: Growth Experiments: Optimisations 21
- 22. Traction is a measure of your product’s engagement with its market. Investors care about traction over everything else.- Nivi and Nival, Venture hacks Problem/Solution Fit Product/Market Fit Scale Ideal time to raise money 22
- 24. What is a Startup? A TEMPORARY organisation DESIGNED to SEARCH ……. For REPEATABLE and SCALABLE Business Models Startups are NOT just SMALLER versions of a LARGE Company 24
- 25. Strategy for Startups • Planning before the Plan • Use the Osterwalder Canvas to do two things: – Organise our thinking – Get out of the Building to turn the hypothesis into facts • SEARCH for the Business Model First and then Write it Up (Business Plan) 25
- 26. Customer vs. Product Development • More startups fail from a lack of customers than from a failure of Product Development. • We have all the processes to manage the Engineering Risk • No processes to manage the Customer Risk. 26
- 27. Customer Development Manifesto 1. There are No Facts Inside Your Building, So Get Outside. 2. Pair Customer Development with Agile Development 3. Failure is an Integral Part of the Search 4. Make Continuous Iterations and Pivots 5. No Business Plan Survives First Contact with Customers. So Use a Business Model Canvas 27
- 28. Customer Development Manifesto 6. Design Experiments and Test to Validate Your Hypotheses. 7. Agree on Market Type. It Changes Everything 8. Startup Metrics Differ from Those in Existing Companies 9. Fast Decision-Making, Cycle Time, Speed and Tempo 10.It is All About Passion 28
- 29. Customer Development Manifesto 11.Startup Job Titles Are Very Different from a Large Company’s. 12. Preserve All Cash Until Needed. Then Spend 13.Communicate and Share Learning 14.Customer Development Success Begins With Buy-In 29
- 30. Customer Development You may be the smartest person in your building but you’re not smarter than the collective intelligence of your customers 30
- 31. Organisation - Startup Founders run Customer Development Team • No Sales • No Marketing • No Business Development Founder Get out of building! 31
- 32. 32 Knowledge is having the right answer. Intelligence is asking the right questions The Art of Customer Interviewing
- 34. What is a business model? A business model describes the rationale of how an organisation Creates, Delivers and Captures value 34
- 35. Use of BMC in Established Companies IMPROVE ----------------------------------INVENT Know Problem/Know Solution -Unknown Problem/Unknown Solution ------EXECUTE -------------------------SEARCH------------ 35
- 38. 38 “It is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change.” - Charles Darwin
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- 40. Nespresso’s Business Model What is Nespresso’s Business Model? What made them so successful? 4040
- 41. Customer Development Process Post it to the Wall Create the canvas Make it visible Use Yellow Post-It notes with your guesses Get out of the building and test your hypotheses. There are NO FACTS here. Talk to customers, partners, vendors. Design experiments, run tests, get data 41
- 42. Hypotheses or Guesses The canvas is a set of hypotheses, i.e. guesses It helps us to organize our thinking! It is not about functional organisation, but about the business The real question is HOW do we change those guesses into FACTS? 42
- 44. Case Study: Owlet Owlet Infant Health Tracker Takes The Wearable Revolution Into The Crib 44 Note: You may need to license the online learning tool on Strategyzer to view this clip from Osterwalder
- 45. Review –First Identify the problem and then define the solution. Not the other way around. –Before you scale, make sure that you find a ‘Product-Market’ fit. –The BMC is a shared language for business modelling. Use the template to change your guesses to FACTS. 45
- 46. “There are no shortcuts to any place worth going” – Beverly Sills
- 47. Strategy and Business Models – DIT PM Module 1 raomal@LeanDisruptor.com | @raomal @LeanDisruptor | www.facebook.com/LeanDisruptor RAOMAL PERERA THANK YOU!
- 48. 48 APPENDIX
- 49. Relevant Blogs Alex Osterwalder - www.alexosterwalder.com Business Model Generation www.businessmodelgeneration.com Steve Blank – www.steveblank.com Ash Maurya – www.leanstack.com Eric Ries - www.startuplessonslearned.com John Mullins – www.getting-to-plan-b.com Raomal Perera – www.LeanDisruptor.com
- 51. Additional Resources Books 51 Books: Key Strategy Tools – 80+ tools for every manager to build a winning strategy The Business Model Navigator – The 55 Models that will revolutionize your business – Gassmann, Frankenberger & Csik What Customers Want – Using Outcome- Driven Innovation to Create Breakthrough Products and Services – Ulwick
- 52. Additional Resources 52 BMC Online Tools: Strategyzer https://canvanizer.com/ (free tool) Stattys Notes; http://www.stattys.com/ - A new generation of adhesive notes with a unique "Write and Slide" function.
- 53. Additional Resources 53 Card decks: BMI Pattern Cards Mapping the Business Model Design Space Card Deck
- 54. 54 MINIMUM VIABLE PRODUCT (MVP)
- 55. MVP A Minimum Viable Product (MVP) is “that product which has just those features and no more that allows you to ship a product that early adopters see and, at least some of whom resonate with, pay you money for, and start to give you feedback on” 55
- 56. MVP #1 Explainer video Explainer video is a short video that explains what your product does and why people should buy it. A simple, 90 seconds animation is sufficient. e.g. Dropbox How to make an explainer video 56
- 57. MVP #2 A Landing Place A landing page is a web page where visitors “land” after clicking a link from an ad, e-mail or another type of a campaign. 57
- 58. MVP #2 A Landing Page • Craft your Landing Page • Set up a Google AdWord campaign and drive traffic to your new landing page. Even here you can let the AdWord engine rotate different messages and test what works best on your prospects • Set up Google Analytics. The most important thing to measure is conversions – percent of visitors that sign up (or perform another desired action) • Set up a chat to make it easy for the visitors to raise questions • Set up a service like Qualaroo to survey your visitors 58
- 59. MVP #3 Wizard of Oz A “Wizard of Oz” MVP is when you put up a front that looks like a real working product, but you manually carry out product functions. It’s also known as “Flinstoning”. Zappos shoes is the biggest online shoe retailer, with annual sales exceeding $1 billion. In his Lean Startup book, Eric Ries describes how the founder started with a Wizard of Oz product. 59
- 60. MVP #4 The Concierge MVP Instead of providing a product, you start with a manual service. But not just any service! The service should consist of exactly the same steps people would go through with your product. 60
- 61. MVP #5 Piecemeal MVP This strategy is a blend between the “Wizard of Oz” and “Concierge” approaches. Again, you emulate the steps people would go through using your product – as you envision it. 61
- 62. MVP #5 Crowd Funding Sell it before you build it. The basic idea is simple: launch a crowd funding campaign on platforms such as Kickstarter or IndieGoGo. Not only will you validate if customers want to buy your product, but you will also raise money. 62
- 63. 63 WORKSHOPS
- 65. Fund Raising for Entrepreneurs 65
- 66. How to Build a Startup 66
- 67. Building Emotional Capital for Leadership 67
- 68. Strategy and Business Models – DIT PM Module 1 raomal@LeanDisruptor.com | @raomal @LeanDisruptor | www.facebook.com/LeanDisruptor RAOMAL PERERA THANK YOU!