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Lean Startup 101
The document outlines a session on Lean Startup principles presented by Phil Dillard at the 2015 Lean Startup Conference, discussing its value for various entrepreneurs and organizations. It emphasizes the importance of addressing uncertainty through rapid iteration and market learning, while explaining key concepts such as minimum viable products, assumptions, and the build-measure-learn loop. The session aims to equip participants with practical strategies to test ideas, validate hypotheses, and ultimately build successful products.
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Lean Startup 101
- 1. Lean Startup 101 PhilDillard November 16 th , 2015 2015 Lean Startup Conference Sponsored by:
- 2. Agenda 1. Who isin the room? 2. How will this be valuable? 3. What is the Lean Startup & where did it come from? 4. How and why does it work? 5. What should I do next?
- 3. Who is inthe room? You • Founders • 1st Time Entrepreneurs • Serial Entrepreneurs • Employees • Designers • Developers • Newbies • Book Readers Lean Startup Company
- 4. How will thisbe valuable? This Session Is • Practical • Clear • Direct • Simple • Introductory • Wisdom sharing
- 5. How will thisbe valuable? This Session Is • Practical • Clear • Direct • Simple • Introductory • Wisdom sharing • Hands-on This Session Is Not • Book review • Brainstorming session • Workshop • Full of jargon
- 6. How will thisbe valuable? Addressing the Main Questions • What is it? • Why does it work? • How does it work? • Why does it matter? • How can I get started?
- 7. What is theLean Startup?
- 8. What’s a startup? “Ahuman institution designed to create a new product or service under conditions of extreme uncertainty. “ - Eric Ries author, The Lean Startup
- 9. What is LeanStartup? A method to systematically address uncertainty through rapid iteration and market learning
- 10. What is theLean Startup? Helps us Answer Two Critical Questions 1. Should we build this new product or service? 2. How can we increase our odds of success?
- 11. Introductory Example Webvan vs.InstaCart 1. Should we build this new product or service? 2. How can we increase our odds of success?
- 12. Lean Startup isEverywhere Enterprises • New opportunities for innovation and productivity • Starved for organic growth • Technology has changed the game Startups • Seek to disrupt enterprises Customers / Consumers • Trained to remove friction
- 13. Why are wehere? We share a common purpose: - A shared vision for the kind of company we want to create Which leads to - A company that continuously creates new sources of growth And requires - A new growth operating system for modern management practices
- 14. What is theLean Startup? Three Key Areas to Discuss 1. History 2. Terminology / Definitions 3. Application / Applicability
- 15. What is theLean Startup? History • Robert Deming • Toyota Lean Manufacturing • Agile Software Development • Lean Startup • Steve Blank • Eric Ries • Alexander Osterwalder • Lean Startup Community
- 16. Exercise 1. What isyour organization about? 2. What do you hope to get from the organization by applying the Lean Startup approach?
- 17. What is theLean Startup? Three Key Areas to Discuss 1. History 2. Terminology / Definitions 3. Application / Applicability
- 18. What is TheLean Startup? Terminology / Definitions • Entrepreneurs • Startups • Uncertainty (Product / Market / Model) • Assumptions • Hypotheses • Validated Learning • Experiments • Minimum Viable Product • Customer Development • Pivots
- 19. Exercise 1. What isan entrepreneur (or intrapraneur)?
- 20. What’s a startup? “Ahuman institution designed to create a new product or service under conditions of extreme uncertainty. “ - Eric Ries author, The Lean Startup
- 21. What kinds ofuncertainty? Technical / product risk Can we build this? Customer / market risk If we build this, will people use/buy it? Business model risk Once we build this, can we find a way to make money from it?
- 22. What is anassumption? Starts with “I believe that” statements Clarifies your current understanding of what you don’t know with certainty Some are more important than others Identify and isolate critical assumptions
- 23. Assumptions Example Early Assumption “Ina city where space is extremely limited, people will pay a small amount of money, for a small amount of space... they don’t need a hotel.”
- 24. Exercise 1. Write alist of assumptions for your product / business innovation?
- 25. How to prioritizeassumptions Once you list assumptions, prioritize them using a grid like this: Impact Time horizon Will kill Won’t kill OR
- 26. 1. Identify yourmost important assumptions using the simple prioritization from the previous page? Exercise
- 27. What is ahypothesis? “If then” statement that helps design tests for an assumption Clarifies your current understanding of what uncertainty you seek to resolve Is specific in the action, timing and value / amount of impact Helps to design and build an MVP
- 28. For your mostimportant assumption, write some hypotheses you might want to test? Exercise
- 29. Critical Hypothesis Example CriticalHypothesis “Professional photographed listings get 2-3 times more business (and host don’t turn down free professional photography.”
- 30. A scientific procedureundertaken to make a discovery, test a hypothesis, or demonstrate a known fact Or A scientific test in which you perform a series of actions and carefully observe their effects in order to learn about something What is an Experiment?
- 31. Minimum Viable Product(MVP) Experiment that helps you validate (or invalidate) hypotheses about the value or growth potential for a new product An MVP helps you answer a specific question about one of your assumptions Building an MVP is not a 1-time event
- 32. For the keyassumption / hypothesis, design the most simple MVP you can think. Exercise “Perfection is not when there is nothing left to add but nothing left to take away”
- 33. Minimum Viable Product Translateyour critical assumptions into an experiment: 1. Isolate critical assumptions for testing 2. Draft your hypothesis to be tested 3. Build an experiment 4. Measure the results 5. Collect the data and learning in a systematic Validated Learning
- 34. Customer Development = Talkingto people “Get out of the building” Qualitative interviews to learn more about customer needs and behaviors May start with the first test you run after you build an MVP
- 35. Fears • Change indirection without a change in vision • OR • Persevere: A team’s decision to test the next most important hypothesis Pivot
- 36. How does itwork? Three Key Areas to Discuss 1. History 2. Terminology / Definitions 3. Application / Applicability
- 37. What is theLean Startup? 3. Application / Applicability A. Experimentation B. Testing C. Measure Results
- 38. A. Experimentation • Processof rapidly learning what customers want and will pay for • Test assumptions so that you don’t waste time and money building the wrong thing
- 39. B. Testing process Build-Measure-Learnloop • Identify your assumptions • Prioritize assumptions • Focus on assumption with biggest risk • Figure out how to test assumption quickly • Figure out your hypothesis about that test • Run experiment • Review results • Iterate
- 40.
- 42. Culture of Testing 1.Experiment design is important 2. But, recording and evaluating the learning is more important 3. Establish an organization that learns together 4. Step up the sophistication of the experiment when you are ready to do so as a team 5. Team learning is the most important outcome
- 43. C. Measure Results Whatknowledge are you looking to gain? “The What” What you are going to do with the knowledge when you get it? “The So What”
- 44. What if everyhypothesis is invalidated? Pivot.
- 45. Top 10 typesof pivots 1. Zoom-in pivot 2. Zoom-out pivot 3. Customer segment pivot 4. Customer need pivot 5. Platform pivot 6. Business architecture pivot 7. Value capture pivot 8. Engine of growth pivot 9. Channel pivot 10. Technology pivot
- 46.
- 47. Why does itwork? Likely Explanations 1. Experience, analysis, evolution 2. Basis in Scientific Method 3. Reality – Who cares?! It works!
- 48. Recap - Howdo you win? Build products more quickly by: Recognize your assumptions Test assumptions early and often Don’t spend time and money building the wrong things
- 49. How do youget into trouble? Go off assuming that you know things that you actually don’t know
- 50. Recap 1. Who isin the room? 2. How will this be valuable? 3. What is the Lean Startup & where did it come from? 4. How and why does it work? 5. What should I do next?
- 51. Call to Action •Engage Community • LS 201 - Focus on assumptions • LS 301 – Focus on experiments • Mentoring, Coaching, Additional Training – Explore with the Lean Startup Co What should I do next?
- 52. Questions? Phil Dillard Lean StartupTrainer 415-894-5297 Phil@LeanStartup.co Heather McGough Co-Founder, Lean Startup Company (415) 830-2479 Heather@LeanStartup.co