Lean Startup Roadmap workshop I conduct in Russian. Combines the methodology from Steve Blank, Eric Ries, Ash Maurya, and others. The intention is to provide practical steps individuals new to business and entrepreneurship can take in order to increase the likelihood of success in their new venture.
The full workshop usually takes 6-8 hours.
5. The reason most startups fail
is not because they build a
bad product, it’s that they
build a product nobody
needs.
-Eric Ries
6. What separates successful
startups is not necessarily starting
with a better initial plan (Plan A),
but finding a plan that works
before running out of resources.
- Ash Maurya
12. “A startup is not a ‘doll
house’ version of a large
company.”
- Eric Ries
13. What is а “Lean Startup?”
• “Startup” – a temporary organization
designed to search for a repeatable
and scalable business model.
• Tradition
– Write and Execute
– Assumptions
– Static (Unchanging)
• Lean
– Model and Test
– Customer Development
– Agile (Iteration, Pivots))
14. “Startups that succeed are
those that manage to iterate
enough times before running
out of resources.”
- Eric Ries
21. Problem Interview
Goal: To understand…
1. What is the problem? Why is it a problem?
2. Who has the problem?
3. How do they currently solve the problem?
Ash Maurya, Running Lean 81
22. Problem Interview
• Do
– Create falsifiable hypotheses to test
– Speak with customers face-to-face (casual setting)
– Use a script
– Take notes (bring partner/co-founder)
– Listen and ask questions
• Don’t
– Pitch or sell
– Ask about the future
– Take more time than needed
23. Problem Interview
• Examples of Falsifiable Hypotheses
– X% of interviewees will have problem A
– X% of interviewees will currently use and be
dissatisfied with an existing alternative
– X% of interviewees will be viable customers
Ash Maurya, Running Lean 84
24. Problem Interview
• Example Script
1. What’s the hardest part about [problem context]?
2. Can you tell me about the last time that
happened?
3. Why was that hard?
4. What, if anything, have you done to solve that
problem?
5. What don’t you love about the solutions you’ve
tried? Justin Wilcox – How I Interview Customers
http://customerdevlabs.com/2013/11/05/how-i-interview-customers/
25. Problem Interview
• Other questions:
– How often do you experience this problem?
– How much are you spending to solve this
problem now?
– Where do you find information about [problem
context] currently?
• Keys:
– Focus on emotional reactions
– Use “5 Whys” to get to the core problems
– Hear 3 problem stories during each interview
Justin Wilcox – How I Interview Customers
http://customerdevlabs.com/2013/11/05/how-i-interview-customers/
26. Market Research
• What current solutions/alternatives exist?
– Cost
– Function
– Revenue model
• What barriers to entry exist?
• Is this a rising or dying trend?
Resources:
– google.com/trends, google.com/think
– entrepreneur.com/businessideas/index.html
– hbr.org, forbes.com, wsj.com, techcrunch.com
33. A business model describes the
rational of how an organization
creates, delivers, and
captures value.
-Alex Osterwalder, Business Model Generation
34.
35. Customer Segments
• The specific group of people
or organizations a business
intends to serve.
– Who has the problem?
– For whom are we creating
value?
– Who must we sell to or make
happy?
• Early Adopters: The
characteristics of the first
group of people who will
purchase your product.
• Sketch:
– Title
– Age
– Family Details
– Income Level
– Amount of Free Time
– Location
– Their Values/Morals
– Social Groups
– Professional
Associations
– Hobbies
– Where They Shop
36. Problems
• The top 1-3 problems your
Customer Segments need
solved.
– What problem are we
curing?
– How strong is this problem?
– Will the customer pay to
have this problem
removed?
• Existing Alternatives: How the
problem is currently solved by
the Customer Segments.
• Sketch:
– Frequency
– Expense
– Awareness
– Reaction
– Newness
37.
38.
39.
40.
41.
42.
43.
44.
45.
46.
47. – Customer Segments
• Businessmen
• Foreigners
• University Students
• Early Adopters
– Young Adults (22-35 years old)
• First 10 customers: 4th year students at ASEM
48. – Problems
• No comfortable, well-recognized place to meet
for a good cup of coffee in Chisinau.
• Existing Alternatives
– McDonald’s
– Andy’s Pizza
– Marcu’s Coffee
– 3 в 1
49. Team Time
Customer Segments and Problems
• CS: The specific group of
people or organizations a
business intends to serve.
• Sketch:
– Title
– Age
– Family Details
– Income Level
– Amount of Free Time
– Location
– Their Values/Morals
– Social Groups
– Professional Associations
– Hobbies
– Where They Shop
• P: The top 1-3 problems your
Customer Segments need
solved.
• Existing Alternatives: How the
problem is currently solved by the
Customer Segments.
• Sketch:
– Frequency
– Expense
– Awareness
– Reaction
– Newness
50.
51. Solution
• The minimum activities or
features needed to solve
the Customer Segments’
top 1-3 Problems.
– Outline a feature set to
solve each problem
(description of your product
or service)
– Only include what is
necessary (according to
Solution Interviews)
• Sketch:
– How problem is solved
– Time needed for
solution
– Resources needed
– Partners needed
52. – Solution
1. Offer consistently high-quality café goods from
a professionally trained staff.
2. Create an easily identifiable facility with an
atmosphere conducive for good conversation.
3. Instill customer service and appreciation into
every interaction with a Tucano employee or
the Tucano facilities.
53. Team Time - Solution
• The minimum activities or
features needed to solve
the Customer Segments’
top 1-3 Problems.
– Outline a feature set to
solve each problem
(description of your product
or service)
– Only include what is
necessary (according to
Solution Interviews)
• Sketch:
– How problem is solved
– Time needed for
solution
– Resources needed
– Partners needed
54.
55. Unique Value Proposition
• A clear and short message
stating the business’ unique
Solution to the Customer
Segments’ Problem.
– The value you create for the
Customer Segment
– How are you improving the lives of
our customers?
– How are you different?
• High-Level Concept: Brief relation of
your UVP to something commonly
understood
(i.e. ВКонтакте: “Facebook for
Russians”).
• Sketch:
– How your solution
relates to the customer’s
#1 problem
– Finished story benefit of
purchasing your product
– How the solution will
make your customer feel
Note: The UVP
represents the emotional
trigger that will convince
your customer to
purchase your
product/service
56. – Unique Value Proposition
• Slogan: Love. Peace. Coffee.
• Offering great coffee, with a great atmosphere, to enable
great conversations.
• Truly superior customer service and experience from
entrance to exit.
• Fair-Trade and always-fresh 100% Arabica coffee roasted at
Tucano Coffee Roasting Factory.
• World-class coffee machines operated by baristas certified
to SCAE standards .
• High-Level Concept:
Starbucks for Chisinau.
57. Team Time - Unique Value Proposition
• A clear and short message
stating the business’ unique
Solution to the Customer
Segments’ Problem.
– The value you create for the
Customer Segment
– How are you improving the
lives of our customers?
– How are you different?
• High-Level Concept: Brief relation
of your UVP to something
commonly understood
(i.e. ВКонтакте: “Facebook for
Russians”).
• Sketch:
– How your solution
relates to the customer’s
#1 problem
– Finished story benefit of
purchasing your product
– How the solution will
make your customer feel
Note: The UVP
represents the emotional
trigger that will convince
your customer to
purchase your
product/service
58.
59. Channels
1. Product: How a company
delivers its Value Proposition
to the Customer Segments.
2. Marketing: How a company
attracts the interest of its
Customer Segments.
• Customer Relationship – The
closeness and frequency of
the relationship developed
with the Customer Segments.
• Sketch:
– How will you deliver your
solution?
– How will your customer
make a purchase?
– How will you find your
first 10 paying
customers?
– What is the most
resource efficient way to
attract Early Adopters?
60. – Channels
• Product:
1. Purchase coffee beans and equipment from an
international distributor, purchase raw ingredients
for baked goods from local producers
2. Trained and certified Tucano employees bake and
roast products
3. Engaging and pleasant staff take the customer’s
order and payment
4. Tucano employee searches for customer and
delivers the order to their seat.
61. – Channels
• Marketing:
– Highly-visible and prominently placed storefronts
– Brightly colored and large advertisements on
billboards
– Catering partnerships at prominent events with
occasional giveaways
– Word-of-mouth by encouraging existing
customers to invite friends/colleagues for a
meeting
– Hosting evening events for NGOs or clubs.
62. Team Time - Channels
1. Product: How a company
delivers its Value Proposition
to the Customer Segments.
2. Marketing: How a company
attracts the interest of its
Customer Segments.
• Customer Relationship – The
closeness and frequency of
the relationship developed
with the Customer Segments.
• Sketch:
– How will you deliver your
solution?
– How will your customer
make a purchase?
– How will you find your
first 10 paying
customers?
– What is the most
resource efficient way to
attract Early Adopters?
63.
64. Definitions
• Income/Revenue: Money coming in to a
business.
• Expense/Cost: Money exiting a business
(items the business pays for).
• Profit: Money a business keeps
Profit = Revenue – Expenses
65. Definitions
• Fixed Costs: Expenses that do not change
depending on the number of products sold.
• Variable Costs: Expenses that change in
proportion to the number of products sold.
• Break Even Point: Time (in # of products
sold) when Revenue = Expenses.
BEP = Fixed Costs / (Price – Variable Costs)
66. Break Even Point
Gourmet Food Cart
• Price of lunches = 55 MDL per lunch
• Variable expenses = 20 MDL per lunch
• Fixed expenses = 6000 MDL per month
BEP = Fixed Costs / (Price – Variable Costs)
BEP = 6000 / (55-20)
BEP = 171 lunches per month
67. Revenue Streams
• The various income-
generating activities of a
business.
– Customer Segment paying
money to receive the
business’ Value Proposition
– Charge as early as the
customer will permit
– Determine price based on
the value you add, not the
cost of production
• Sketch:
– For what features will
the customer pay?
– What features will be
free?
– How will you position
your business against
alternative solutions?
– Are you adding value to
non-customers who
would be willing to pay?
68. Cost Structure
• All operational expenses
of running your business.
• Sketch:
– Immediate fixed costs
– Immediate variable
costs (including your
labor)
– Break-even point
71. Team Time
Revenue Streams and Cost Structure
• R$: The various income-
generating activities of a
business.
– Determine price based on the
value you add, not the cost of
production
• Sketch:
– For what features will the
customer pay?
– What features will be free?
– How will you position your
business against alternative
solutions?
– Are you adding value to non-
customers who would be willing
to pay?
• C$: All operational expenses
of running your business.
• Sketch:
– Immediate fixed costs
– Immediate variable costs
(including your labor)
– Break-even point
72.
73. Key Metrics
• The 3-5 indicators of a
business’ health
(success).
– How you track your
customer’s behavior and
preferences
– Monitoring the
implementation of your
business’ key activities
– Informs a business whether
or not it needs to
pivot/iterate
• Sketch:
– Customer Segment
Awareness
– New Customer
Acquisition
– Inventory Turnover
– Time Needed to
Complete Job
– On-Time Payments
– Customer Retention
– Customer Referral
75. Unfair Advantage
• The features of your
business that are difficult
for competitors to copy or
buy.
– What keeps new
competitors from taking
your customers?
– If someone “steals” your
idea, how will you continue
to exist?
• Sketch:
– Current advantages (often
based on existing
relationships or networks)
– Advantages your business
could develop over time
– Note: passion, existing
resources, and being “first
to market” are not
sustainable competitive
advantages.
76. – Key Indicators
• 100 new customers per week
• 40% of customers return once per week
• 70% of customers recommend to friends/family
• 750 orders between all locations per day
• 6 minutes – average time it takes from the
moment a customer enters the ordering line
until the customer’s food/drink is delivered
77. - Unfair Advantage
• American research experience and
professional network
• Location of real estate
• Employee acquisition and training
program
78. Team Time
Key Metrics and Unfair Advantage
• KM: The 3-5 indicators of a
business’ health (success).
• Sketch:
– Customer Segment Awareness
– New Customer Acquisition
– Inventory Turnover
– Time Needed to Complete Job
– On-Time Payments
– Customer Retention
– Customer Referral
• UA: The features of your
business that are difficult
for competitors to copy or
buy.
• Sketch:
– Current advantages
– Advantages your business
could develop over time
– Note: passion, existing
resources, and being “first
to market” are not
sustainable competitive
advantages
79.
80. MODEL
• Lean Canvas
• Solution Interviews
– Return to the earlier interviewees and
propose the Solution and UVP you sketched
• Do you have the right feature set?
– Discuss your business model (the interaction
of all 9 boxes) with mentors or fellow
entrepreneurs
• Do you have a realistic path to profit?
81. LeanStartup Roadmap
• Idea
– Problem Interviews
– Market Research
• Model
– Lean Canvas
– Solution Interviews
• Test
– MVP
– Early Adopter Sales
84. Minimum Viable Product
• Strategy used for fast and qualitative
market testing of a product or product
feature
• The most resource-efficient (time, money,
energy) method of creating and capturing
value from the Customer Segment
– MUST solve the problem of customer
– Should not require a loan or long timeframe
85. Minimum Viable Product
• Create falsifiable hypotheses
– One quantitative metric per test
• Sell product, but continue learning
• Produce product in small batches
• Communicate insights with team early and
often
86. Minimum Viable Product
• Moldovan Agritourism
Business
– Plan and organize
excursions/events for
individual customers
– Drive them personally
– Provide food and sleeping
arrangements from home
– Work on own
garden/field/orchard,
collect payment
• Internet-Based Food
Distributor
– Create online form (free) for
customers (in one town) to
place order (5 products)
– Purchase these products
from the local market
– Personally deliver to homes
the next day
– Collect payment
Examples:
87. Early Adopter Sales
• Begin selling to very specific Customer
Segment (10-15 people)
• Learn which features are “must-have” and
which are unnecessary
• Determine price point
– High enough the customer must contemplate the
purchase, low enough the customer will buy
Goal: Validate business model not # of sales
88. LeanStartup Roadmap
• Idea
– Problem Interviews
– Market Research
• Model
– Lean Canvas
– Solution Interviews
• Test
– MVP
– Early Adopter Sales
• Scale
– Product 1.0 Launch
– Business Plan
– Investors
89. SCALE
Product/Market Fit
Determine if your product will attract demand from
regional / national / international markets
• Product 1.0 Launch
• Business Plan
• Investors
90. Product 1.0 Launch
• Use recommendations from Early Adopters to
expand sales
• Test various price points
• Execute marketing strategy
• Maintain close contact with customers
• Keep learning who is and who is not your
customer segment
91. Business Plan
1. Unique Value Proposition
2. Customer Development Learnings
3. Solution
4. Problem/Customer Segments
5. Problem/UVP/Unfair Advantage
6. Solution/Revenue Streams
7. Channels (Marketing)
8. Channels (Production)
9. Conversations w/ Partners, UA
10. Solution Interviews/MVP/Early Sales
11. Key Metrics
12. Cost Structure/Revenue Streams
13. Cost Structure/Revenue Streams
1. Cover
2. Executive Summary
3. Company Description
4. Market
5. SWOT Analysis
6. Product/Service Line
7. Marketing and Sales
8. Operational Activity
9. Ownership and Management
10. Risk Assessment and Mitigation
11. Action Plan
12. Budget
13. Break Even Point
14. Funding Request
15. Staff
16. Appendices
92. Investors
• Family and Friends
• Business Plan Competitions
• Economic Development Projects
• Angel Investors
• Banks
• Venture Capital
Lowest Risk
Greatest Risk
93. What is Success?
Know the impact you
wish to make in the world
and scale accordingly.