This document discusses the Lean Startup concept and process for developing a startup from an initial business idea to a validated company. It explains that a startup should be viewed as an experiment to test assumptions about problems, solutions, and fit with the market. Startups should use the minimum viable product to test these assumptions and either validate or pivot the business idea based on lessons learned. The document provides examples of startups that have used this approach and outlines the key elements a startup needs to evaluate like customer problems, competition, and market opportunity.

1. the Learning Startup
From Business_Idea to Company_Creation
Customer_Problem_Solution
Market_Competitive_Landscape
Master of Complex Actions, SISSA, Trieste
Leonardo Zangrando, MBA, MSc
February 26th, 2011

2. One view on Startups
STARTUP Company
A temporary
organisation
searching for a
tested, repeatable,
and scalable
Business Model

3. the Lean Startup concept
A startup is a human institution designed to
deliver a new product or service under
conditions of extreme uncertainty
This section based on the work of Eric Ries
Startup = Experiment
Looking for product / market fit

4. the Lean Startup concept
Pivot
change direction but stay ground
in what you have learned
If we can reduce time between pivots
we can increase our odds of success
before we run out of money

5. the Lean Startup concept
Value
Which activities create value
and which are just a waste?
In traditional business, value is created
by delivering a product or a service to customers

6. the Lean Startup concept
Value in startups
In a startup, the product and customer
are still unknown
Validated learning about customers
Looking for product / market fit

7. the Lean Startup Machine
Boston, right now

8. the Lean Startup Machine
Boston, right now

9. the Lean Startup Machine
Boston, right now

10. photoButler
San Francisco, Jan 2011
Pitched: Software application to sort down your best photos quickly.

11. Signal Booth
Chicago, Nov 2010
Pitched: Platform for finding cool activities around you spontaneously.

12. scootScooters
New York, July 2010
Pitched as an online storefront for environmentally-friendly (electric) scooters.
● Assumption: Scooter owners care about the environment and will
prefer electric scooters over gas scooters.
● Learned: (1) Functional transportation and "cool factor" primary
motivation for buying (2) Environmental concerns unimportant,
people uncomfortable with electric models (3) Trial key stage of
buying process.
● Pivot: Rent-to-own agreement for Vespa scooters to offer low-
commitment trial of product.
● CustDev: Over 40 in-person and phone interviews with scooter
dealers, sellers, buyers, LSM participants, and people minding their
own business in Starbucks. Used Craigslist to get phone interviews
with local buyers and sellers.

13. Test / Learn / Validate or Pivot
● You do this even before modeling your
business, you are still testing your Business
Idea assumptions
Test Assumptions Lessons Learned
Validate / Pivot

14. Test Assumptions
● What is the Minimum viable Product to test my
assumption(s)?
● Classic startup fallacy: “ship it and see what
happens.” Whenever you use this plan, you are
guaranteed to succeed – at seeing what happens.
● You want to learn, and – most importantly,
● get another turn through the feedback loop
● Plan your MVP and measures so that you test/reject
your assumption and in the process learn something
that will allow you to proceed

15. Validate Business Idea
● Business Idea assumptions
● Customer / Problem / Solution
● Competitive Landscape
● Market

16. Customer / Problem / Solution
● It's the key starting point
● Iterate through this all the time
● Objectives
● Problem Statement
● Product Requirements
● Customer Archetype (a-day-in-the-life)

17. Competitive Landscape
● How is your market? Porter 5 forces + 1
New Entrants
Suppliers Industry Clients
Complementors
Substitutes

18. Competitive Advantage
● Disruptive Innovation
→ get market share
Buyer value generated (willingness to pay)
● Sustaining Innovation
Costs incurred
→ get market share
● Differentiate on
– Cost
– Value
Industry Successful Successful Competitor – Customer Relationship
average differentiated low-cost with dual
competitor competitor competitor advantage

19. Market
Size, Segmentation, Targeting
● Market Size Questions:
Business ● How big can this market be?
Idea
● How much of it can we get?
● Market growth rate
● Market structure (Mature or in flux?)
Startup
Target
Market ● Most important
● Talk to Customers and Sales Channel
Served
Available
Market ● Next important
Total ● Desk Research
Available ● Industry analysis reports
Market
● Financial analysis reports

20. the Learning Startup
From Business_Idea to Company_Creation
thank you!
Leonardo Zangrando
the Learning Startup
leo@zangrando.com