Downloaded 25 times
Uploaded byCalvin Chin
Lean Startup
1) Traditional startup models assume startups should mimic large companies, but this leads to inefficiencies as startups don't have the same resources as large firms. 2) The Lean Startup model advocates for rapid, low-cost experimentation to test product-market fit through a build-measure-learn feedback loop rather than lengthy product development cycles. 3) New funding models like accelerators and patient capital lower risks for startups by providing early-stage funding and mentorship.
More Related Content
Lean Startup
- 1. The Lean Startup Calvin Chin @calvinwuchin chen@qifang.cn
- 2.
- 3. geek ABC husband father social entrepreneur
- 5. Qifang Qifang is aweb service for students and schools to find funding and recipients for loans and scholarships, manage relationships and data, and Students share in a community of borrowers, lenders and donors. qifang.cn Schools Funding
- 6. Social Ventures non- profits social change profitability corporations & NGOs
- 7. technology Social Innovation social change profitability
- 8. Agenda • the badnews • the good news
- 9.
- 10.
- 11. Probability of Success Individual Event Probability Company has sufficient capital 80% Management is capable and focused 80% Product development goes as planned 80% Production and component sourcing goes as planned 80% Competitors behave as expected 80% Customers want product 80% Pricing is forecast correctly 80% Patents are issued and are enforceable 80% Combined Probability of Success 17% If just one of the variables falls to 50%, the overall probability goes to 10%. Source: Source: Zider, B., Harvard Business Review
- 12.
- 13.
- 14. team • only one founder • vote of no confidence • thought partnership • moral support • fights between founders • usually due to people not situation • face conflicts and misgivings early • lack of documentation • bad engineers • business people have difficulty judging who is a good product developer Source: Paul Graham
- 15.
- 16. location • startup hubs • experts • resources: supporting industries • sympathy • serendipity Source: Paul Graham
- 17.
- 18. flawed concept • Marginal niche • avoid competitors, end up avoiding customers • intimidated by big ideas • Derivative • limited by who you are derivative of • feature not a product not a company • solve a problem no one is solving Source: Paul Graham
- 19.
- 20. timing Error Result revenue grow faster than employees inadequate customer service revenues grow slower than employees burn rate too high, run out of cash bad early customer experience, first PR grows faster than quality of code (product) impressions too many cooks; culture of slowness and low employees grow faster than code (product) effort Source: Joel Spolsky
- 21.
- 22. funding • Expensive • time consuming to raise • time consuming after, investor management • Raising too little • distractions: keeping day jobs • lack of effort • Raising too much/spending too much • hiring too many people • corrupts company culture • harder to change direction Source: Paul Graham
- 23.
- 24. launch • launch too late • perfect is the enemy of the good • afraid of customer rejection • chase customers with customization and features • launching without customer understanding • not getting hands dirty • sacrificing customers for profit maximization Source: Paul Graham
- 25. How do youlower your risks?
- 26.
- 27.
- 28.
- 29. new funding models Accelerating Model defined FCS Adoption and proven Valuation (Adoption Curve) Low-burn experimentation phase <?> Time Risk (ß) Seed Capital (angels?) Series A Expansion (or founder liquidity) Source: Benchmark Capital
- 30. accelerators • Incubator 2.0 • Funding+ model • Mentorship • Network Source: ReadWriteWeb
- 31. social venture capital AngelInvestors social venture capital Philanthropy Venture Capital Bank Financing patient capital Foundations Government Grants Financial Social & Returns Environmental Returns • Multiple Priorities • Single bottom line: economic returns • Double-bottom line: economic returns + social returns • Triple-bottom line: economic returns + social returns + ecological returns
- 32.
- 33.
- 35. many think startupsare just small large companies large company = ⨏( large company ) “if you want your company to be big, act like it is big...”
- 36. large companies... have culture have customers have departments have meetings have money have time
- 37. Large Company product developmentmodel Product Alpha/Beta Concept Development Launch Test Source: Steve Blank
- 38. product development model Product Alpha/Beta Concept Development Launch Test - create marketing/ - create demand comunications - hire PR agency Marketing materials - generate early buzz - launch event - branding - create positioning Source: Steve Blank
- 39. product development model Product Alpha/Beta Concept Development Launch Test - create marketing/ - create demand comunications - hire PR agency Marketing materials - generate early buzz - launch event - branding - create positioning - hire sales VP - build sales Sales - hire first sales staff organization Source: Steve Blank
- 40. product development model Product Alpha/Beta Concept Development Launch Test - create marketing/ - create demand comunications - hire PR agency Marketing materials - generate early buzz - launch event - branding - create positioning - hire sales VP - build sales Sales - hire first sales staff organization Business - hire first biz dev - do deals for FCS Development Source: Steve Blank
- 41. startups are notsmall big companies startup ≠ large company ≠ ⨏( large company )
- 42. product/market fit product ? startup market ∉ Source: Marc Andreesen
- 43. product/market fit product Depends on your model - market traction - 40% of customers “must have” your product - means being in a good market with a product that market can satisfy that market before product/market fit after product/market fit The customers are buying the product just as fast as you can make it -- or usage is growing just as fast You can always feel when product/market fit isn't as you can add more servers. Money from happening. The customers aren't quite getting value customers is piling up in your company checking out of the product, word of mouth isn't spreading, account.You're hiring sales and customer support usage isn't growing that fast, press reviews are kind staff as fast as you can. Reporters are calling of "blah", the sales cycle takes too long, and lots of because they've heard about your hot new thing deals never close. and they want to talk to you about it.You start getting entrepreneur of the year awards from Harvard Business School. Investment bankers are staking out your house... Source: Marc Andreesen, Sean Ellis
- 44. problems/worries search for a execution of a business model business model scalable startup transition large company Scaling problems Startup problems - how do we make enough product? - will people buy? product - how do we keep inventory? - how do we market? market - how do we maintain quality? - how do we pay our bills? - how do we find enough good people? - etc...?
- 45. operations/metrics search for a execution of a business model business model scalable startup transition large company Startup Accounting Traditional Accounting - customer acquisition cost product - balance sheet - viral coefficient - cash flow statement market - customer lifetime value - income statement - average selling price/order size - predictable forecasting - monthly burn rate - etc... Source: Steve Blank
- 46. customer development model Customer Customer Customer Company Discovery Validation Creation Building Source: Steve Blank
- 47. Customer Development: KeyConcepts • Parallel/integrated process to Product Development • Measurable Checkpoints • Customer milestones, not product milestones • Pragmatic view on market types • Emphasis on learning and discovery (before execution) Source: Steve Blank
- 48. Customer Development: Heuristics •Inside your building, opinions; outside of the building, facts • Develop for the Few, not the Many • ‘Earlyvangelists’ make your company and know more than you • Focus Groups are for big companies • Minimum viable product Source: Steve Blank
- 49. Hierarchy of Earlyvangelists has or can acquire budget put together a makeshift solution actively looking for solution is aware of having a problem has a problem Source: Steve Blank
- 50. customer development model Customer Customer Customer Company Discovery Validation Creation Building - Stop selling, start listening - Test your assumptions, hypotheses - Customer Problem, Customer Solution (your product concept) Source: Steve Blank
- 51. Customer Discovery: ExitCriteria • What are your customers top problems? • How much will they pay to solve them • Does your product concept solve them? Chinese Social Startups Specifics: • Do customers agree? • What is the government view on your project/issue? • How much will they pay? • What structure/registration should your project take? • Draw a day-in-the-life of a customer • Are you in the right location? • before and after your product • Draw the org chart of users and buyers Source: Steve Blank
- 52. customer development model Customer Customer Customer Company Discovery Validation Creation Building - Develop a repeatable sales process - Only earlyvangelists are crazy enough to buy Source: Steve Blank
- 53. Customer Validation: ExitCriteria • Do you have a proven sales roadmap • Org chart? Influence map? • Do you understand the sales cycle? • ASP, ROI, etc... • Do you have a set of orders validating the roadmap • List price • Does the financial model make sense? Source: Steve Blank
- 54. customer development model Customer Customer Customer Company Discovery Validation Creation Building - Creation comes after proof of sales - ‘Cross the chasm’ - Strategy not a tactic Source: Steve Blank
- 55. Customer Creation: KeyConcepts • Grow customers from few to many • Four customer creation activities • Year One objectives • Positioning • Launch • Demand creation • Creation is different for different market types Source: Steve Blank
- 56. customer development model Customer Customer Customer Company Discovery Validation Creation Building - (re)build your company’s organization and management - review your mission Source: Steve Blank
- 57. Company Building: KeyConcepts • Management needs to change as the company grows • Founders are casualties Development-orientation Process-orientation Mission-orientation • Sales Growth to match market type Source: Steve Blank
- 58. Company Building: ExitCriteria • Does sales growth plan match market type? • Does spending plan match market type? • Does the Board agree? • Is your team right for the stage of the company? • Have you built a mission-oriented culture? Source: Steve Blank
- 59. Customer Product || Development Development Source: Steve Blank
- 60.
- 61. the fundamental startuploop !"#$%& ,#$-.& *+!,"& "$)$& '("#& /#$%+-#& Source: Eric Ries
- 62. Continuous Deployment !"#$%& -$'*.%&'()$*% !"#$%&'()$*% ><?5&@A84&-00:& ,#$-.& *+!,"& '01213034& ';345&$1;784<4& "56708951:& "$)$& '("#& +$'(,*$%&'()$*% /#$%+-#& -;6<=&%67<:&)54:4& Source: Eric Ries
- 63. Continuous Deployment • Deploy new software quickly • Tell a good change from a bad change quickly • Revert a bad change quickly • Work in small batches • Break large projects down into small batches Source: Eric Ries
- 64. Rapid Split Tests !"#$%& -$'*.%&'()$*% !"#$%&'()$*% ><?5&@A84&-00:& ,#$-.& *+!,"& '01213034& ';345&$1;784<4& "56708951:& "$)$& '("#& +$'(,*$%&'()$*% /#$%+-#& -;6<=&%67<:&)54:4& Source: Eric Ries
- 65. Split-testing all thetime • A/B testing is key to validating your hypothesis • Has to be simple enough for everyone to use and understand • Make creating a split-test no more than one line of code • AAA: actionable, accessible, auditable • Measure the macro: split-test the small, measure the large Source: Eric Ries
- 66. Five Whys !"#$%& -$'*.%&'()$*% !"#$%&'()$*% ><?5&@A84&-00:& ,#$-.& *+!,"& '01213034& ';345&$1;784<4& "56708951:& "$)$& '("#& +$'(,*$%&'()$*% /#$%+-#& -;6<=&%67<:&)54:4& Source: Eric Ries
- 67. Five Whys RootCause Analysis • Technique for continuous improvement of company process • Ask “why” five times when something unexpected happens • Make proportional investments in prevention at all five levels of the hierarchy • Behind every supposed technical problem is usually a human problem. Fix the cause, not just the symptom. Source: Eric Ries
- 68. Other strategies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�<103&/5=O3:0<& -357C:?3&/90129=10<& -357C)1?3&$73=:0<& ';429?3=&,151490& I=3D1>:G3&/90129=10<& Source: Eric Ries
- 69.
- 70.
- 71.
- 72. Traditional Product Development Unit of progress: Advance to next stage Waterfall !"#$%&"'"()*+ ,"*%-(+ Problem: known Solution: known .'/0"'"()123(+ 4"&%56123(+ 71%()"(1(6"+ Source: Eric Ries
- 73. Agile Unit of progress: a line of working code “Product Owner” or in-house customer Problem: Known Solution: Unknown Source: Eric Ries
- 74. Lean Product Development Unitof progress: validated learning about customers ($$$) Problem: Unknown Solution: Unknown Source: Eric Ries
- 76. More on Earlyvangelists 1Value your key differentiators – Your product will have benefits that only it can deliver along with benefits that customers can get elsewhere. For example you are offering a product where the key benefits are related to simplicity, scale and cost reduction.Your customer research has validated that all three of these are important to customers in the space. You think you beat the other products in your market when it comes to simplicity and cost reduction but nobody else offers scale. The easiest segment you could go after is one where scale really matters because even though you think you might be better at simple, the difference between you and the alternatives might not be meaningful for customers. 2 Don’t care much about the stuff you aren’t good at – In the early stages there will be gaping holes in your product and other things that your product just doesn’t do all that well. Your best segment doesn’t care too much that those things (at least not at the beginning). 3 Risks of adopting your product are lower for them – There will be reasons why customers will not adopt your product related to the risk in doing so. For example some segments will have to migrate off of another product in order to adopt yours or customers will have to trust that you can do what you say you can do. It’s often a useful exercise to document all of the reasons people won’t adopt your product and then map that our against your potential customer segments. Choose a segment that has the least barriers to adopting your product. 4 Segment is big enough or is a gateway to a big enough segment – Make sure that the segment you end up with is big enough to get your business to where it needs to go. If it isn’t quite big enough then it should at least be a good, clear pathway to a bigger segment. For example, having a beachhead of customers in mid-sized services businesses might be enough to help you get into the market for independent consultants (where having that base would address some of their concerns). Source: April Dunford
- 77. • Customer Discovery – Achieve Problem/Solution Fit • Customer Validation – Achieve Product/Market Fit • Customer Creation – Drive Demand • Company Building – Scale the Company Source: Ash Maurya
- 78. Test the RiskiestThing First Depending on your business: Minimum Viable Product Distribution, Revenue, Business model Minimum Feasible Product Transistors/inch, Power usage, Cures cancer Minimum Desirable Product Engagement, Sustainable growth, Love <3 Source: IDEO, Andrew Chen