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Lean Startup Methodology
The document outlines the Lean Startup methodology by Robert Love, emphasizing principles such as validated learning and the build-measure-learn approach to entrepreneurship under uncertainty. It details experiments conducted to assess the market value for a list of top talent, ultimately leading to pivots in strategy based on feedback from potential users. The next steps involve improving user engagement and achieving a sustainable growth rate through effective communication and networking.
Lean Startup Methodology
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- 4. What is "Lean"? ● Takes its name from "Lean Manufacturing" ● Toyota Production System (TPS) ● Preserving value with less work ● Value is defined as any action or process that a customer would be willing to pay for
- 5. What's a "Startup"? Ahuman institution designed to create new products and services under conditions of extreme uncertainty.
- 6. The five principles: 1. Entrepreneurs are everywhere 2. Entrepreneurship is management 3. Validated learning 4. Innovation accounting 5. Build-Measure-Learn
- 7. Entrepreneurs are everywhere ●You don't have to work in a garage to be in a startup ● All industries ● All sectors
- 8. Entrepreneurship is management ●A startup is an institution, not just a product ● Requires management ● A new kind of management specifically geared to its context of extreme uncertainty
- 9. Validated learning ● Startupsexist not to make stuff, make money, or serve customers ● They exist to learn how to build a sustainable business ● This learning can be validated scientifically, by running experiments that allow us to test each element of our vision
- 10. Innovation accounting ● Improveentrepreneurial outcomes ● Hold entrepreneurs accountable ● Focus on the boring stuff: ○ How to measure progress ○ How to setup milestones ○ How to prioritize work ● This requires a new kind of accounting specific to startups
- 11. Build-Measure-Learn ● The fundamentalactivity of a startup is to: ○ Turn ideas into products ○ Measure how customers respond ○ Learn whether to pivot or persevere ● All successful startup processes should be geared to accelerate that feedback loop
- 13. "Founders that learn aremore successful"
- 14. "Startups that pivot onceor twice raise 2.5x the money"
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- 16. Problem It's hard todetermine the best person for a job (both ways).
- 17. Solution If we couldcreate a list of the best people for a given profession... ● Employers could find the best people ● The best people could land jobs perfectly matched to their skills
- 18. Smoke test ● Whatcan we test before we build anything? ● What can we do before we have to build? ● How can we find out if anyone finds this list valuable enough to pay for it?
- 21. Experiment #1: Hypothesis Recruiterswill pay for a list of top talent in a profession.
- 22. Experiment #1: Method Createa list of 50 fake software engineers and sell it to 25 recruiters for $200 each.
- 24. Experiment #1: Results Nolists were sold.
- 25. Experiment #1: Learnings ● Recruiters didn't see the value in the list ● Felt that's what their job was ● "Why would we just pay for a list" ● Felt threatened ● (and so they should - after all - we are trying to disrupt them!)
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- 28. Experiment #2: Hypothesis Inorder to avoid expensive recruiter fees, businesses will pay for a list of top talent in a profession.
- 29. Experiment #2: Method Takeour list of 50 fake software engineers and sell it to 25 businesses for $200 each.
- 30. Experiment #2: Results Nolists were sold.
- 31. Experiment #2: Learnings ●Don't offer a flat list ● Offer a service where users create lists from people in their own networks (Facebook and LinkedIn) ● We'll be growing the network of GetListed users without having to do the initial service ● Requires strong viral coefficient (V-Co) to maintain sustainable growth
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- 34. Experiment #3: Hypothesis 1.A user creates a list 2. Listees are notified via Facebook wall post or LinkedIn message that they have been added to a list 3. Listees sign up to GetListed and become users 4. Rinse and Repeat 5. V-Co of 1+ will be achieved
- 35. Experiment #3: Method Buildand Measure the following: 1. Spread of the network New members / lists created 2. Conversion New members signed up / new members added 3. Cycle Signups who created a list 4. Returning users Existing signed in users / existing base users
- 38. Experiment #3: Results ●509 listees ● 157 sign-ups ● 0.31 V-Co
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- 41. Next steps... Achieve aV-Co of 1+ by connecting via email and experimenting with different messaging. ● Hey Bosco - Michael just joined GetListed - why not add him to a list? ● Hey Bosco - Michael added you to X list - why not list him back? ● Hey Bosco - Phil added Michael to X list - why don't you list him?
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