This document provides an introduction to running lean startups using agile and lean principles. It discusses how startups can fail if they don't get customer feedback through minimum viable products (MVPs). The key is to iteratively build, measure, and learn from customers to reduce risks. Startups should conduct customer interviews to understand problems and validate solutions before building MVPs. They should then measure metrics to determine which features to add or whether to pivot the product based on what customers say, not what founders think customers want. The overall goal is to accelerate sustainable growth through sticky, viral, or paid customer acquisition.

1. Introduction to
Running Lean Startups
Agile Egypt Meetup
Prepared by: Amr Medhat
Date: 21/2/2015

2. Introduction
 Engineering vs Business
 Manager vs Entrepreneur
 Project vs Product

3. What's Lean?
 Toyota Production System
 Lean Principles
1. Eliminate Waste
(waste = anything with no value to customer)
2. Amplify Learning / Create Knowledge
3. Decide as Late as Possible / Defer Commitment
4. Deliver as Fast as Possible / Deliver Fast
5. Empower the Team / Respect People
6. Build Integrity / Quality in
7. See / Optimize the Whole

4. Lean Meets Agile
 Agile Values
1. Individuals and interactions over processes and tools
2. Working software over comprehensive documentation
3. Customer collaboration over contract negotiation
4. Responding to change over following a plan

5. What's a Startup?
Adventures of the Mini Entrepreneur
Institution designed to create new products under conditions of extreme uncertainty

6. Why Lean Startups?
 Toyota productivity with lean increased 4
times than it competitors
 Toyota quality reached 12 times better
While ..
 90% of startups fail to launch their products
 50% of first-time CEOs get fired by their
investors

7. Why Startups Fail?
 You think your idea is brilliant?
=> Ideas are everywhere
 Idea is nothing without implementation
=> You implemented the perfect solution, for whom?
 A shiny business plan full of figures, speculations
& forecasting?
=> It's hard to predict the future without history
 You love chaos &"just do it" hoping they'll come?
=> Agility and dynamism are still management
* Your excuse: a lesson leaned? but how?

8. Entrepreneurship is a kind of Management
 Vision
 Steer
 Tune Engines
 Pivot
 Accelerate

9. Hypothesis not Faith
A Startup is an Experiment

10.  Back to Agile and Lean Principles:
 Eliminate anything with no value to customer
 Value customer collaboration over contract negotiation
 But where is the customer?
How to Start Lean?
GET OUT OF THE BUILDING

11. Product vs. Customer Development
 Product Development
 Customer Development
Concept Product A/B Test Launch
Customer
Discovery
Customer
Validation
Customer
Creation
Company
Building

12. From Plan A to a Plan that Works
 2/3 of startups drastically changed 1st plan
 2 stages to reach the right plan
Problem /
Solution
Fit
Product /
Market
Fit
Scale
Iterate
Validated Learning Growth
Experiment Optimize
it finally works
time to raise fund

13. Iterate: Build - Measure - Learn
Minimum Viable Product:
anything that allows early adopters to give
feedback and grasp product vision.
Idea
Build
MVP
Measure
Data
Learn

14. Plan: Lean Canvas
Cost Structure
Customer Acquisition costs
Distribution costs
Hosting
People, etc.
Revenue Streams
Revenue Model
Life Time Value
Revenue
Gross Margin
Problem
Top 3 problems
Existing alternatives
Solution
Top 3 features
Key Metrics
Key activities you
measure
Unique Value
Proposition
Single, clear,
compelling message
that states why you are
different and worth
paying attention
High-concept pitch
Unfair
Advantage
Can’t be easily copied
or bought
Channels
Path to customers
Customer
Segments
Target customers
Early adopters

15. Prioritize Where to Start
 Split lean canvas per customer segments & rank
 Identify riskiest part of your model
 Problem/Product, Customer/Channel, Market/Revenue
 Uncertainty vs Risk
 Falsifiable hypothesis
 Maximize for: Speed, Learning, Focus
 Validate Qualitatively
 5 customer interviews (data to reduce uncertainty)
 Verify Quantitatively (cohort analysis, split
testing)
 Iterate (identify, define, validate, verify)

16. Customer Interview Guidelines
 No surveys
 No focus groups
 No pitching
 Measure what they do, not what they want
 Stick to a script
 Start with people you know
 then ask them to introduce you to others
 Neutral place - coffee shop
 20 - 30 minutes
 Document immediately
 don't record
 30-60 people (or till you're able to predict their answers)

17. Problem Interview
Goal: Mitigate the following
risks:
 Product risk: What are you
solving? (Problem)
 How do customers rank the
top three problems?
 Customer risk: Who has the pain?
(Customer Segments)
 Is it a viable customer
segment?
 Market risk: Who is the
competition? (Alternatives)
 How do customers solve
these problems today?

18. Solution Interview
Goal: Mitigate the following risks:
 Product risk: How will you solve these
problems? (Solution)
 What is the minimum feature set
needed to launch?
 Customer risk: Who has the pain?
(Early Adopters)
 How do you identify early
adopters?
 Market risk: What is the pricing model?
(Revenue Streams)
 Will customers pay for a solution?
 What price will they bear?

19. MVP Release 1.0
 Justify the addition of each feature
 Start with your number-one problem
 Eliminate nice-to-haves and don’t-needs
 Consider other customer feature requests
 Charge from day one, but collect on day 30
 Focus on learning, not optimization
 Deploy continuously

20. Design Activation Flow
Activation Flow
Customer Lifecycle

21. MVP Interview
Goal: Mitigate the following risks:
 Product risk: What is compelling
about the product? (UVP)
 Activation flow effectiveness
 Customer risk: Do you have
enough customers? (Channels)
 Can you bring more
customers?
 Market risk: Is the price right?
(Revenue Streams)
 Do customers pay for your
solution?

22. Innovation Accounting
 Measure & validate your MVP learning
 Use Actionable Metrics
 Tie specific and repeatable actions to observed
results
 Metrics are people first
 Use cohort analysis: measure a group sharing a
common characteristic within a defined period

23. Adding Features to MVP
 Features must be Pulled, not Pushed
 Implement an 80/20 Rule
 Minimize in-progress features
 Process feature requests

24. Accelerate
 4 Sources (fuel) of Sustainable Growth
 Word of mouth
 Side effect of product usage (fashion, paypal)
 Funded ads (consumer products / services)
 Repeat use (subscription)
 3 Engines of Growth
 Sticky (long term customer)
 Viral (hotmail)
 Paid (sales power)

25. Summary
MVP
Pivot
Grow

26. Reference Map
Customer
Development
Methodology
Agile
& Lean
Principles
Lean
Startup
Principles
Lean
Startup
Practices

27. Thank you!