The Northfront Entrepreneur Alliance is a entreprenuer networking association in Northern Utah. This presentation was given on 04.06.11 to the group by Rob Kunz- a successfull entrepreneur, investor., and co-founder of BoomStartup. He discusses the Lean Startup Business Model and how to apply it.

1. Lean Startup Practices
and Application
More startups
fail from a lack of customers
than from a failure of product
development...
@robbkunz
http://about.me/robbkunz

2. My Lean Startup Background

Started Back in 1991: RAD / JAD / 4GL / CASE / LINCII

Founded KnowledgeBlue in 2002:
Open Source Systems Integrator and Software-as-a-Service / Cloud
Services Company; 800 Clients, 25K Users;
---> 15 Lean Startup Companies / Projects

Founded ventureblue Capital in 2007:
High Tech, Early-stage Investment Firm applying Lean Startup to
Investment Portfolio Companies
---> 7 out of 14 Investments are Lean Startups

Founded BoomStartup in 2010;
Mentorship-driven Seed Accelerator
---> 5 out of 10 Companies utilized Lean Startup

3. What Is Lean Startup?

Lean, in sense low-burn...with much less waste

Startup, a set of processes and tools used by
entrepreneurs to develop products and markets

An application of Lean Thinking...Toyota

Active Evangelists Eric Ries and Steve Blank

4. Latest Thinking....and Experiments

Expand beyond Product Development into:
- Lean Business Modeling (Bus. Model Validation)
- Lean Marketing
- Lean Support (Crowd Sourcing)

Expand into other industry segments; Consumer
Products and Light Manufacturing

Developing Community-based lean artifacts, best
practices, tools and techniques

5. Trends & Drivers of Lean Startup

Open Source and Free Software

Development: LAMP, Testing, Widgets

Business Applications: CRM, ERP, BI, VOIP

Development Processes and Tools

Agile / Scrum / Customer Development

Minimal Viable Product (MVP)

Cloud Services and Virtualization

IaaS, PaaS and SaaS

6. Leverage Cloud Solutions

7. Idea The “Old Way”
Business
Plan
Func.
Spec
Some Learning
Design
Build
More Learning
Test
Market
Sell Most Learning

8. Idea? The “New” Way
Market Sizing
Minimal
Business Viable
MVP MVP
Model Product
for for
Generation / (MVP)
Adoption Revenue
Validation Usage
3-5 Clients
Month 1 Month 2, 3 & 4 Month 5 Month 6

9. key value customer
activities proposition relationships
key customer
partners segment
s
cost revenue
structure key streams
resources channels
4/6/11 30
images by JAM

10. CUSTOMER SEGMENTS
which customers and users are you serving?
which jobs do they really want to get done?
4/6/11

11. VALUE PROPOSITIONS
what are you offering them? what is that
getting done for them? do they care?
4/6/11

12. CHANNELS
how does each customer segment want to be
reached? through which interaction points?
4/6/11

13. CUSTOMER RELATIONSHIPS
what relationships are you establishing with each
segment? personal? automated? acquisitive?
retentive?
4/6/11

14. REVENUE STREAMS
what are customers really willing to pay for? how?
are you generating transactional or recurring
revenues?
4/6/11

15. KEY RESOURCES
which resources underpin your business
model? which assets are essential?
4/6/11

16. KEY ACTIVITIES
which activities do you need to perform well in
your business model? what is crucial?
4/6/11 14

17. KEY PARTNERS
which partners and suppliers leverage your
model?
who do you need to rely on?
4/6/11

18. COST STRUCTURE
what is the resulting cost structure?
which key elements drive your costs?
4/6/11

21. Tricks & Traps for Business Model

Try mobilize a Mentor to help facilitate discussions

Bring all founders / key players together in person

Limit sessions to 2 hours max, Plan 3 x 2hrs

Leverage online tools for easy access & updates

Produce several poster size prints for awareness

“Get out of the Office” To Validate the model

Test it on Companies that are already operating

Capture Requirements Backlog During Sessions

22. Idea? The “New” Way
Market Sizing
Minimal
Business Viable
MVP MVP
Model Product
for for
Generation / (MVP)
Adoption Revenue
Validation Usage
3-5 Clients
Month 1 Month 2, 3 & 4 Month 5 Month 6

23. Minimal Viable Product (MVP)

24. Agile Development Values

Individuals and interactions over processes / tools

Working software over comprehensive documents

Customer collaboration over contract negotiation

Responding to change over following a plan

25. Scrum Project Organization

26. Scrum Development Process

27. Measure Your Burndown: Daily

28. RallyDev: Automated Scrum Tools

29. Idea? The “New” Way
Market Sizing
Minimal
Business Viable
MVP MVP
Model Product
for for
Generation / (MVP)
Adoption Revenue
Validation Usage
3-5 Clients
Month 1 Month 2, 3 & 4 Month 5 Month 6

31. Leverage Crowdsourcing

32. Lean Startup Lessons Learned

Many talk about it, few can really execute it...

Cross Team Trainingg is a Critical Success Factor (CSF)

MVP tends to ignore architecture and scalability

It is difficult to find Clients who want to be on your
MVP / Early Adoption team...many say they will, few do

It's easy to let MVP become single Customer centric

Measure, Measure and Measure

33. Key Resources
Alex Osterwalder Steve Blank
http://www.businessmodelgeneration.com/ http://steveblank.com/
http://boomstartup.com/
Eric Ries Taking Company Applications Now
Summer 2011 Program – 3 Months
http://www.startuplessonslearned.com/ ------------- Apply Online ------------