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Sell First, Build Later
Lean Startup, Customer Development & Business Model
Istanbul Coders Meetup
19 September 2013
© Copyright 2013 İsmail Berkan
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Who am I?
İsmail BERKAN:
• Startup advisor, mentor and entrepreneur
• Early stage startup specialist
• Management consultant
• International and diverse industry experience
• Total of 18+ years experience:
• 13 years of corporate IT
• 3+ years of management consultancy
• 2+ years of startups
• Computer Science + MBA
© Copyright 2013 İsmail Berkan 19 September 2013
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1: Fundamentals
2: New Toolset for Startups
3: Ten Steps for Tech Startups
Agenda
© Copyright 2013 İsmail Berkan 19 September 2013
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1: Fundamentals
© Copyright 2013 İsmail Berkan 19 September 2013
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So You Want to be a Millionaire?
© Copyright 2013 İsmail Berkan
1: Fundamentals
19 September 2013
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After all, all
startups feel like
assembling a
plane on the air...
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Why Build a Startup?
• Change and improve the world
• Build an organization of lasting value
• Make customers’ lives better
© Copyright 2013 İsmail Berkan
1: Fundamentals
19 September 2013
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What is a Startup?
"A startup is a temporary organization in
search of a scalable, repeatable, profitable
business model."
2010, Steve Blank
"A startup is a human institution designed to
create a new product or service under
conditions of extreme uncertainty."
2010, Eric Ries
1: Fundamentals
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STARTUP
=
EXPERIMENT
© Copyright 2013 İsmail Berkan
1: Fundamentals
What is a Startup?
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Why startups are not small
versions of a large company
© Copyright 2013 İsmail Berkan
1: Fundamentals
19 September 2013
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Scalable
Startup
Large
Company
Transition
The Execution of
the Business Model
The Search for
the Business Model
Startups versus Companies
Startups Search Companies Execute
1: Fundamentals
Source: Steve Blank (The Startup Owner's Manual)
19 September 2013
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What's a Startup Idea?
Problem
(Input = Why)
Solution
(Output = What)
Startup idea Solution
© Copyright 2013 İsmail Berkan
1: Fundamentals
19 September 2013
Think
(Process = How)
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Are You an Entrepreneur or a Wantrepreneur
Entrepreneur Wantrepreneur
Committed Only Involved
Self-Reliant Dependent
Self Starter Procrastinator
Risk Taker Risk Averse
Highly Optimistic Pessimistic
Lives life with reckless abandon Stays safe and alive
Loves being busy Loves feeling busy
Loves result-based strategies Loves couch-potato strategies
Sees failure as opportunity Sees failure as end of the world
1: Fundamentals
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What’s Your Purpose?
"Purpose acts as a guiding light, it gives you the motivation to work through the tough times.
Importantly it helps you say “No” to stuff."—Tom Holme, IDEO
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Passion
What do you
love to do?
Strengths
What are you
awesomely
good at?
Values
What is
important to
you?
Founder(s) True Purpose
(Destiny)
Business Idea
Do you have a big "why"
for doing this?
What problems do you want to solve?
What people will pay you to do?
Are you willing to commit your next 5 to 10 years on this idea?
Founder / Idea Fit
© Copyright 2013 İsmail Berkan
1: Fundamentals
“Don’t start a company unless it’s an obsession and something you love.”
Mark Cuban
19 September 2013
Happy
Spot
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“Simply put: we don’t build
services to make money;
we make money to build
better services. And we
think this is a good way to
build something.”
Mark Zuckerberg letter to shareholders
Facebook’s Purpose: give people the power to share
and make the world more open and connected.
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Steve Jobs explains the rules for success
Click the link below to watch the video (1m29s)
http://youtu.be/KuNQgln6TL0
© Copyright 2013 İsmail Berkan
1: Fundamentals
19 September 2013
WATCH THE VIDEO
CLICK TO
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"9 out of 10 new products FAIL and
many of those failures are
PREVENTABLE."
Steve Blank
Reality
© Copyright 2013 İsmail Berkan
1: Fundamentals
19 September 2013
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90%
LOSERS
100%
WINNERS
Traditional Startup
(talent / guesses based)
Lean Startup
(science / facts based)
You
Normal
People
Average
people
Me
Me
You
Average
people
Normal
People
Bill Gates
Gifted/
Talented
people
Steve Jobs
Marck Zuckerberg
Lucky people
genius
10%
WINNERS
1: Fundamentals
Source: http://LeanSteps.co
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80%
of the software
developed is
being wasted
IAG Consulting, 2008CHAOS Report Standish Group, 2002 & 2006 Source: http://LeanSteps.co
© Copyright 2013 İsmail Berkan
1: Fundamentals
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"More startups fail from
a lack of customers than from a failure of
product development."
Steve Blank
#1 Startup Risk = Customers
© Copyright 2013 İsmail Berkan
1: Fundamentals
Customer Risk + Market Risk + Product Risk + …
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The #1 Reason Why Products Fail
It is because we waste time, money, and
effort building the wrong product.
Source: Ash Maurya
© Copyright 2013 İsmail Berkan
1: Fundamentals
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• New Product Uncertainty:
• Unknown Problem
• Unknown Solution
• Unknown Customer
• The Path to Disaster
• Business model built on untested assumptions
• Market research serves to support your assumptions rather
than validate them
• Scale based on the business plan
• Lack of customers and markets
• Change business at scale (slow and expensive)
• Run out of money
• Poor execution due to lack of right skills
• Flawed business model
• External threats
• and many more…
• A Problem Not Worth Solving
• Building the Wrong Solution
• Can't Get Customers to Pay
• Can't Get Customers Cheaply Enough
More… Why They Fail
© Copyright 2013 İsmail Berkan
1: Fundamentals
19 September 2013
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1: Fundamentals
19 September 2013
Steve Blank on Silicon Valley and Failure
Click the link below to watch the video (1m22s)
http://www.flickr.com/photos/osterwalder/6787544663/
WATCH THE VIDEO
CLICK TO
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Most Entrepreneurs Mis-Prioritizing Their Activities
Entrepreneurs are
doing good things, but
not doing them in the
right order. More than
80% of the time
entrepreneurs are
ignoring customer
demand in the right
product mix until after
they have started to
scale their business.
Harvard Business Review, Beating the Odds When You Launch a New Venture by Clark G. Gilbert and Matthew J. Eyring
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Simple Complex
Source: Kathy Sierra
Featuritis versus The Happy User Peak
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2: New Toolset for Startups
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Techies:
Try it!
Skeptics:
No way!
Visionaries:
Get ahead!
Pragmatists:
Stick with the herd!
Conservatives:
Hold on!
Early Markets Mainstream Markets Late Market
Relative%ofCustomers
© Copyright 2013 İsmail Berkan
1: Fundamentals
The Early Stage "Black Hole"
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The Five Why's Technique
It helps to determine a root cause of a problem.
This technique was developed as a systematic
problem-solving tool by Taiichi Ohno, the father
of the Toyota Production System.
© Copyright 2013 İsmail Berkan
1: Fundamentals
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Problem — A new release disabled a feature for customers.
1st Why? — Because a particular server failed.
2nd Why? — Because an obscure subsystem was used in the wrong way.
3rd Why? — The engineer who used it didn’t know how to use it properly.
4th Why? — Because he was never trained.
5th Why? — Because his manager doesn’t believe in training new engineers
because he and his team are “too busy.” (a root cause)
Solution — Management will dedicate time and budget in training new engineers.
What began as a purely technical fault is revealed quickly to be a very
human managerial issue.
Five Why Example
Source: Eric Ries (The Lean Startup)
© Copyright 2013 İsmail Berkan
1: Fundamentals
19 September 2013
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1: Fundamentals
19 September 2013
Eric Ries: Entrepreneurship Can Be Learned
Click the link below to watch the video (1m16s)
http://youtu.be/gJOz6a1JvPs
WATCH THE VIDEO
CLICK TO
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2: New Toolset for
Startups
© Copyright 2013 İsmail Berkan 19 September 2013
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History of Management Tools
1602 19081700 20121800
The Dutch East India
Company, 1602-
1798. First «modern
company» issued
first stock
certificates.
First MBA
program was
designed in 1908
for big
businesses by
Harvard.
300 years start,
build and grow
without
formally trained
executives.
Formal
management
tools are more
than 100 years
old.
2010
The Lean
Startup –
"Creating
Value"
(2001-2010)
The Dot.com
Bubble –
"Making Money"
(1995-2000)
2000
Source: Adapted from Steve Blank (The Startup Owner's Manual)
2: New Toolset for Startups
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Get out
of the
building!
Genchi Genbutsu (現地現物)
=
Go and See for Yourself
=
Go to the Source
=
Get out of the Building (GOOB)
&
Talk to People
© Copyright 2013 İsmail Berkan
2: New Toolset for Startups
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Customer Development Model
Customer
Discovery
Customer
Validation
Company
Building
Customer
Creation
Pivot
Turn hypotheses
into facts
Identify scalable
and repeatable
sales model
Iteration Execute
© Copyright 2013 İsmail Berkan
2: New Toolset for Startups
The Search for a Business The Growth for a Business
Product/Market Fit
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Hypothesis
Test
Design
ExperimentInsight
The Customer Development Insight Cycle
© Copyright 2013 İsmail Berkan
2: New Toolset for Startups
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A Product is
Customer + Problem + Solution
Don't
Start
Here
Start
Here
2: New Toolset for Startups
19 September 2013
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Hypotheses and Assumptions
2: New Toolset for Startups
converting guesses into facts
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Victory is
measured in
learning.
© Copyright 2013 İsmail Berkan
2: New Toolset for Startups
19 September 2013
Source: Luxr.co
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2: New Toolset for Startups
19 September 2013
The Customer Development Process
by Steve Blank
Click the link below to watch the video (3m34s)
http://youtu.be/NXR_O_Hwuws
WATCH THE VIDEO
CLICK TO
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Build.
Measure.
Learn.
© Copyright 2013 İsmail Berkan
2: New Toolset for Startups
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2: New Toolset for Startups
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+
incremental
releases
make products
customers want
+
reduce waste
Lean Startup
© Copyright 2013 İsmail Berkan
2: New Toolset for Startups
19 September 2013
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2: New Toolset for Startups
19 September 2013
The Lean Startup in 150 Seconds
by Joone Studios
Click the link below to watch the video (2m30s)
http://youtu.be/WAdikBfKeD8
WATCH THE VIDEO
CLICK TO
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STOP
WASTING
PEOPLE’S
TIME & MONEY
© Copyright 2013 İsmail Berkan
2: New Toolset for Startups
19 September 2013
Source: Luxr.co
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What are the Lean Startup Principles?
• Nail it then scale it
• Rapid hypothesis testing about market, pricing,
customers (customers & markets unknown)
• MVP (minimum viable product)
• Low burn by design (no scaling until revenue)
• Metrics, iteration, agile development
• Learn fast (fail fast), pivot or persevere
© Copyright 2013 İsmail Berkan
2: New Toolset for Startups
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The Startup Build-Measure-Learn Loop
LEARN BUILD
MEASURE
IDEAS
PRODUCT
Minimize TOTAL time through the loop
DATA
IDEAS
• Experiments
• Validated learning
© Copyright 2013 İsmail Berkan
2: New Toolset for Startups
(The Startup
OODA Loop)
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There’s much more…
IDEAS
PRODUCTDATA
BUILDLEARN
MEASURE
Code Faster
Unit Tests
Usability Tests
Continuous Integration
Incremental Deployment
Free & Open-Source Components
Cloud Computing
Cluster Immune System
Just-in-time Scalability
Refactoring
Developer Sandbox
Minimum Viable Product
Measure Faster
Split Tests
Clear Product Owner
Continuous Deployment
Usability Tests
Real-time Monitoring
Customer Liaison
Learn Faster
Split Tests
Customer Interviews
Customer Development
Five Whys Root Cause Analysis
Customer Advisory Board
Falsifiable Hypotheses
Product Owner Accountability
Customer Archetypes
Cross-functional Teams
Semi-autonomous Teams
Smoke Tests
Funnel Analysis
Cohort Analysis
Net Promoter Score
Search Engine Marketing
Real-Time Alerting
Predictive Monitoring© Copyright 2013 İsmail Berkan
2: New Toolset for Startups
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What is an Minimum Viable Product
(MVP) ?
"The minimum amount of effort you
have to do to complete exactly one
turn of Build-Measure-Learn
feedback loop."
Eric Ries
© Copyright 2013 İsmail Berkan
2: New Toolset for Startups
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Don’t be misled…
MVP a functioning product
MVP Experiment
(Think: Minimum Viable Experiment)
2: New Toolset for Startups
19 September 2013
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The Minimum Viable Product (MVP)
Source: http://LeanSteps.co
2: New Toolset for Startups
19 September 2013
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PRODUCT
Minimum Viable Product and Pareto Principle
MAIN PROBLEMS
(80%)20%
MAIN CAUSES
SMALL
PROBLEMS
(20%)
MVP
"For many events, roughly 80% of the effects
come from 20% of the causes." (Pareto Principle)
2: New Toolset for Startups
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Running Effective Experiments
Source: Ash Maurya (Running Lean)
© Copyright 2013 İsmail Berkan
2: New Toolset for Startups
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Maximize for Speed, Learning and Focus
Source: Ash Maurya (Running Lean)
© Copyright 2013 İsmail Berkan
2: New Toolset for Startups
19 September 2013
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Traditional Product Development
Unit of Progress: Advance to Next Stage
Waterfall Requirements
Specification
Design
Implementation
Verification
Maintenance
Problem: known
Solution: known
19 September 2013
2: New Toolset for Startups
Source: Eric Ries
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Product Development at Lean Startup
Unit of Progress: Validated Learning About Customers ($$$)
Problem: unknown
Solution: unknown
Customer Development
Hypotheses,
Experiments,
Insights
Data,
Feedback,
Insights
Agile Development (XP)
19 September 2013
2: New Toolset for Startups
Source: Eric Ries
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Reduce INVENTORY, RISK, and WASTE
© Copyright 2013 İsmail Berkan
2: New Toolset for Startups
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Transition
Scalable Startup
Company
Source: Eric Ries
19 September 2013
2: New Toolset for Startups
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Piano Stairs
by TheFunTheory.com
Click the link below to watch the video (1m48s)
http://youtu.be/2lXh2n0aPyw
WATCH THE VIDEO
CLICK TO
2: New Toolset for Startups
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One-page Business
Model
versus
50-page Business
Plan
© Copyright 2013 İsmail Berkan
2: New Toolset for Startups
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So, we need a language in
order to talk about your
startup.
© Copyright 2013 İsmail Berkan
2: New Toolset for Startups
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"No business plan survives first contact with customers."
Steve Blank
"Burn your business plan before it burns you."
Alexander Osterwalder
Business Model versus Business Plan
20 minutes
A single diagram of
your business
Several weeks or months
A document investors make
you write that they don't read
© Copyright 2013 İsmail Berkan
2: New Toolset for Startups
19 September 2013
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Capture your vision on a single page business model
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Business Model Environment Strategies
2: New Toolset for Startups
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A step-by-step
blueprint that
puts ideas into
action
© Copyright 2013 İsmail Berkan
2: New Toolset for Startups
19 September 2013
Running Lean is systematic
process for iterating from Plan
A to a plan that works, before
running out of resources.
—Ash Maurya
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PRODUCT MARKET
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The Different Worldviews of a Startup
© Copyright 2013 İsmail Berkan
2: New Toolset for Startups
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Entrepreneurs
Source: Ash Maurya
© Copyright 2013 İsmail Berkan
2: New Toolset for Startups
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Customers
Source: Ash Maurya
© Copyright 2013 İsmail Berkan
2: New Toolset for Startups
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Investors
Source: Ash Maurya
© Copyright 2013 İsmail Berkan
2: New Toolset for Startups
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Advisors
Source: Ash Maurya
© Copyright 2013 İsmail Berkan
2: New Toolset for Startups
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3: Ten Steps for
Tech Startups
© Copyright 2013 İsmail Berkan 19 September 2013
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Founder/
Idea Fit
Customer/
Problem Fit
Problem/
Solution Fit
Product/
Market Fit
Bus. Model /
Scale Fit
Brainstorming
Idea Evaluation
Purpose
Founder(s)
Founding Team
Lean Canvas
Eco-System
Primary Users
Primary Payers
Target Problem
Customer Interview
Value Proposition
Low -fidelity MVP
Value Proposition
1-Page Sketching
Risky Hypotheses
Lean Experiments
Early Adopters
Blog
Features
Hi-fidelity MVP
Development Team
Mature MVP
Key Metrics
Satisfaction
Brand
Business Model
Revenue
Referrals
Bootstrap
Fund
Team
Product Dev.
Social Media
Promotion
Profit
START INTERVIEW EXPERIMENT SCALEBUILD
FOUNDER / MARKET FIT
Step 1: Understand the Startup Milestones
Source: Adapted from http://LeanSteps.co© Copyright 2013 İsmail Berkan 19 September 2013
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The Lean Startup Hill
Source: http://LeanSteps.co
3: Ten Steps for Tech Startups
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Step 2: Brainstorm and Evaluate Ideas
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Step 3: Validate Founder/Idea Fit
• Check if you and team fit with "purpose/idea"
• Be passionate about the idea (love what you do)
• Have the right skills set to do the job
• Other:
 Have the right people on your team who shares the same vision
 Don't try to do it all by yourself
 Dedicate 100% of your/team time to a startup
 No parallel jobs or projects – one startup at a time
 Say no, if you’re not 100% excited
 Get out of your comfort zone
 Understand market and users before building anything
 Learn quickly from customers to build your product
 Get rid of any ego that may damage your startup
 Adopt and use the agile and lean tools
© Copyright 2013 İsmail Berkan
3: Ten Steps for Tech Startups
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Step 4: Solve a Painful Problem
Vitamin
Pain Killer
Addictive Drug
Are we solving a BIG customer problem?
Magnitude of a pain/need
Rateofcustomerdelight
© Copyright 2013 İsmail Berkan
3: Ten Steps for Tech Startups
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Pain Pays
"Any big problem is a big opportunity… No one
will pay you to solve a non-problem."
—Vinod Khosla (Kleiner Perkins)
Shark Bite VS. Mosquito Bite
3: Ten Steps for Tech Startups
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What is the problem?
© Copyright 2013 İsmail Berkan
3: Ten Steps for Tech Startups
19 September 2013
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Understand the Problem and Customer
• Who has the problem?
• What is the top problem/pain?
• How is it solved today?
"Customers don’t care about your solution.
They care about their problems."
Dave McClure, 500 Startups
"Customers don't want software; they
want their problems solved."
Mary Poppendieck
3: Ten Steps for Tech Startups
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Focus on the problems
not the solutions.
Learn early, learn often, and
learn fast!
© Copyright 2013 İsmail Berkan
3: Ten Steps for Tech Startups
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3: Ten Steps for Tech Startups
19 September 2013
Finding the Problem is the Hard Part
by Kevin Systrom, CEO of Instagram
Click the link below to watch the video (3m28s)
http://youtu.be/XETaA1b6ep4
WATCH THE VIDEO
CLICK TO
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Step 5: Build a Killer Startup Team
Startups with multiple founders have a greater
chance of success than single-founder startups.
© Copyright 2013 İsmail Berkan
3: Ten Steps for Tech Startups
"Great things in business are never done by one
person, they’re done by a team of people."
Steve Jobs
19 September 2013
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The Startup Team: Must Have Skills
© Copyright 2013 İsmail Berkan
3: Ten Steps for Tech Startups
Most people are good at one or maybe two of these, but it’s
extremely rare to find someone who can wear all the hats.
The ideal team size is two or three people.
Vision
(Search for the business
model + Customer Dev.)
Sales & Marketing
(Position & Sell it)
Product
(Frame it/define it)
Technology
(Build it)
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Is your team aligned?
© Copyright 2013 İsmail Berkan
3: Ten Steps for Tech Startups
19 September 2013
Source: Andreas Klinger
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Step 6: Create an One-Page Lean Canvas
FILL OUT ALL 9 BOXES OF THE CANVAS IN ORDER 1 THRO 9
© Copyright 2013 İsmail Berkan
3: Ten Steps for Tech Startups
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Step 7: Get Out of the Building (GOOB)
© Copyright 2013 İsmail Berkan
3: Ten Steps for Tech Startups
1. Talk to potential customers
2. List your assumptions
3. Test the riskiest ones
4. Design experiments
5. Evaluate results
6. Change plans based on evidence
7. Launch small proof-of-concept products
8. Get a few paying customers
9. Make them really happy
10.Repeat, as needed.
19 September 2013
Source: Adapted from Luxr.co
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Some Real
MVP Examples
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Fake Door MVP
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3: Ten Steps for Tech Startups
19 September 2013
"How $40 Saved Us 9 Months and $2MM"
by Paul Howe, CEO of Need Feed
Click the link below to watch the video (5m21s)
https://vimeo.com/24749599
WATCH THE VIDEO
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Coming Soon Video Explainer MVP
Initial MVP
• Screen flow movie of mockups
• Landing Page – sign up if you are interested
• Posted on Hacker News and Digg
Result: 90,000 Signups in Three Days
© Copyright 2013 İsmail Berkan
3: Ten Steps for Tech Startups
19 September 2013
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3: Ten Steps for Tech Startups
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Take the photo Email the photo
Concierge and Flinstoning MVP
© Copyright 2013 İsmail Berkan
3: Ten Steps for Tech Startups
19 September 2013
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Crowdfunding MVP
© Copyright 2013 İsmail Berkan
3: Ten Steps for Tech Startups
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Collect Email Adresses & Survey MVP
© Copyright 2013 İsmail Berkan
3: Ten Steps for Tech Startups
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3: Ten Steps for Tech Startups
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Currency ($) Pitch MVP
© Copyright 2013 İsmail Berkan
3: Ten Steps for Tech Startups
19 September 2013
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3: Ten Steps for Tech Startups
19 September 2013
How to test & validate a startup in 10 weeks
Danbits.com Case Study
Click the link below to watch the video (7m04s)
http://vimeo.com/64520024
WATCH THE VIDEO
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Step 8: Pivot or not Pivot
Don’t Let This Happen To You:
• Thinking and accepting pivot as a failure
• Pivoting away from your goals or purpose
• Unwilling to pivot
• Pivot too often and too soon
• Panic at the pivot
"A change in STRATEGY without a change in VISION."
Eric Ries
70% of every startup would possibly pivot
from the initial idea.
© Copyright 2013 İsmail Berkan
3: Ten Steps for Tech Startups
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"I'm not leaving you. I'm pivoting to another man."
© Copyright 2013 İsmail Berkan
3: Ten Steps for Tech Startups
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Fall in love with your customers,
market and business model not with
your product/service.
Step 9: Build the Right Product
© Copyright 2013 İsmail Berkan
3: Ten Steps for Tech Startups
“You’ve got to start with the customer
experience and work back toward the
technology – not the other way around.”
Steve Jobs
19 September 2013
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Discover
Your
Business
Model
Problem
Solution
Customer
Segments
Channels
Revenue
Streams
Cost
Structure
Key Metrics
Unfair Advantage
Unique Value
Proposition
© Copyright 2013 İsmail Berkan
3: Ten Steps for Tech Startups
19 September 2013
106 / 113
Step 10: Get Funding
Only ask for funding when you have a:
• Successful customer/problem/solution fit
• Validated product with market
• Pivot successfully at least one time
• Significant traction
• Right team with complementary skills
• Delightful solution to a painful problem
• Scalable and growing market
• Repeatable sales and revenue model
• Clear and profitable business model
• Competitive advantage and it's better than competitors
• Marketing plan on how do you get customers
• Serial entrepreneur experience with successful exit
What do you need from investors:
• How much are you raising and how will you spend the money?
© Copyright 2013 İsmail Berkan
3: Ten Steps for Tech Startups
19 September 2013
107 / 113
Source: Steve Blank
© Copyright 2013 İsmail Berkan
3: Ten Steps for Tech Startups
How to Get a VC Meeting
19 September 2013
108 / 113
Source: Y Combinator
© Copyright 2013 İsmail Berkan 19 September 2013
109 / 113© Copyright 2013 İsmail Berkan
“Successful startups are the ones who
have enough money left over to try their
second idea.”
—Clayton Christensen, Author and Harvard Professor
Change or Fail Fast
19 September 2013
110 / 113© Copyright 2013 İsmail Berkan
Summary
• Be Honest with Yourself & Discover Truth
• Know Your Purpose & Aim to the Happy Spot
• Get out of Your Comfort Zone
• Be Willing to Search & Discover Your Business Model
• Think Big, Start Small & Act Fast
• Build a Great Team with Complementary Skills
• Be Prepared for the Experiments
• Find a Big Customer Pain or Need
• Always Get out of the Building (GOOB)
• Validate All Unknowns & Assumptions
• Maximize Experiments for Focus, Speed & Learning
• Focus on the Problems & Customers, Not the Solutions
• Nail It, Then Scale It
19 September 2013
111 / 11319 September 2013© Copyright 2013 İsmail Berkan
• Stay Lean & Agile
• Work on the Business Models not the Business Plans
• Code Faster, Measure Faster, Learn Faster & Succeed Faster
• Learn Early, Learn Often & Learn Fast
• Change (Iterate & Pivot) or Fail Fast & Fail Well
• Learn & Be Ready for the Pivot
• Don’t be Shy to Feel the Pain
• Scale Fast and Smart
• Waste No Time, Money or Resources
• Approach to the Right Investor at the Right Time
• Keep It Simple
• Sell First, Build Later
• Make Something People Passionately Want
Summary (Cont'd.)
112 / 113© Copyright 2013 İsmail Berkan 19 September 2013
113 / 113
İsmail BERKAN
Email
ismail@ismailberkan.com
Twitter
https://twitter.com/ismailberkan
Linkedin
http://tr.linkedin.com/in/ismailberkan
© Copyright 2013 İsmail Berkan 19 September 2013

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Sell First, Build Later with the Lean Startup: Fundamentals, Tools, Methods and Ten-Steps

  • 1. 1 / 113 Sell First, Build Later Lean Startup, Customer Development & Business Model Istanbul Coders Meetup 19 September 2013 © Copyright 2013 İsmail Berkan
  • 2. 2 / 113 Who am I? İsmail BERKAN: • Startup advisor, mentor and entrepreneur • Early stage startup specialist • Management consultant • International and diverse industry experience • Total of 18+ years experience: • 13 years of corporate IT • 3+ years of management consultancy • 2+ years of startups • Computer Science + MBA © Copyright 2013 İsmail Berkan 19 September 2013
  • 3. 3 / 113© Copyright 2013 İsmail Berkan 19 September 2013
  • 4. 4 / 113 1: Fundamentals 2: New Toolset for Startups 3: Ten Steps for Tech Startups Agenda © Copyright 2013 İsmail Berkan 19 September 2013
  • 5. 5 / 113 1: Fundamentals © Copyright 2013 İsmail Berkan 19 September 2013
  • 6. 6 / 113 So You Want to be a Millionaire? © Copyright 2013 İsmail Berkan 1: Fundamentals 19 September 2013
  • 7. 7 / 113© Copyright 2013 İsmail Berkan After all, all startups feel like assembling a plane on the air... 19 September 2013
  • 8. 8 / 113 Why Build a Startup? • Change and improve the world • Build an organization of lasting value • Make customers’ lives better © Copyright 2013 İsmail Berkan 1: Fundamentals 19 September 2013
  • 9. 9 / 113© Copyright 2013 İsmail Berkan What is a Startup? "A startup is a temporary organization in search of a scalable, repeatable, profitable business model." 2010, Steve Blank "A startup is a human institution designed to create a new product or service under conditions of extreme uncertainty." 2010, Eric Ries 1: Fundamentals 19 September 2013
  • 10. 10 / 113 STARTUP = EXPERIMENT © Copyright 2013 İsmail Berkan 1: Fundamentals What is a Startup? 19 September 2013
  • 11. 11 / 113 Why startups are not small versions of a large company © Copyright 2013 İsmail Berkan 1: Fundamentals 19 September 2013
  • 12. 12 / 113© Copyright 2013 İsmail Berkan Scalable Startup Large Company Transition The Execution of the Business Model The Search for the Business Model Startups versus Companies Startups Search Companies Execute 1: Fundamentals Source: Steve Blank (The Startup Owner's Manual) 19 September 2013
  • 13. 13 / 113 What's a Startup Idea? Problem (Input = Why) Solution (Output = What) Startup idea Solution © Copyright 2013 İsmail Berkan 1: Fundamentals 19 September 2013 Think (Process = How)
  • 14. 14 / 11319 September 2013© Copyright 2013 İsmail Berkan
  • 15. 15 / 11319 September 2013© Copyright 2013 İsmail Berkan Are You an Entrepreneur or a Wantrepreneur Entrepreneur Wantrepreneur Committed Only Involved Self-Reliant Dependent Self Starter Procrastinator Risk Taker Risk Averse Highly Optimistic Pessimistic Lives life with reckless abandon Stays safe and alive Loves being busy Loves feeling busy Loves result-based strategies Loves couch-potato strategies Sees failure as opportunity Sees failure as end of the world 1: Fundamentals
  • 16. 16 / 113 What’s Your Purpose? "Purpose acts as a guiding light, it gives you the motivation to work through the tough times. Importantly it helps you say “No” to stuff."—Tom Holme, IDEO © Copyright 2013 İsmail Berkan 19 September 2013
  • 17. 17 / 113 Passion What do you love to do? Strengths What are you awesomely good at? Values What is important to you? Founder(s) True Purpose (Destiny) Business Idea Do you have a big "why" for doing this? What problems do you want to solve? What people will pay you to do? Are you willing to commit your next 5 to 10 years on this idea? Founder / Idea Fit © Copyright 2013 İsmail Berkan 1: Fundamentals “Don’t start a company unless it’s an obsession and something you love.” Mark Cuban 19 September 2013 Happy Spot
  • 18. 18 / 113 “Simply put: we don’t build services to make money; we make money to build better services. And we think this is a good way to build something.” Mark Zuckerberg letter to shareholders Facebook’s Purpose: give people the power to share and make the world more open and connected. © Copyright 2013 İsmail Berkan 19 September 2013
  • 19. 19 / 113 Steve Jobs explains the rules for success Click the link below to watch the video (1m29s) http://youtu.be/KuNQgln6TL0 © Copyright 2013 İsmail Berkan 1: Fundamentals 19 September 2013 WATCH THE VIDEO CLICK TO
  • 20. 20 / 113© Copyright 2013 İsmail Berkan 19 September 2013
  • 21. 21 / 113 "9 out of 10 new products FAIL and many of those failures are PREVENTABLE." Steve Blank Reality © Copyright 2013 İsmail Berkan 1: Fundamentals 19 September 2013
  • 22. 22 / 11319 September 2013© Copyright 2013 İsmail Berkan 90% LOSERS 100% WINNERS Traditional Startup (talent / guesses based) Lean Startup (science / facts based) You Normal People Average people Me Me You Average people Normal People Bill Gates Gifted/ Talented people Steve Jobs Marck Zuckerberg Lucky people genius 10% WINNERS 1: Fundamentals Source: http://LeanSteps.co
  • 23. 23 / 113 80% of the software developed is being wasted IAG Consulting, 2008CHAOS Report Standish Group, 2002 & 2006 Source: http://LeanSteps.co © Copyright 2013 İsmail Berkan 1: Fundamentals 19 September 2013
  • 24. 24 / 113 "More startups fail from a lack of customers than from a failure of product development." Steve Blank #1 Startup Risk = Customers © Copyright 2013 İsmail Berkan 1: Fundamentals Customer Risk + Market Risk + Product Risk + … 19 September 2013
  • 25. 25 / 113 The #1 Reason Why Products Fail It is because we waste time, money, and effort building the wrong product. Source: Ash Maurya © Copyright 2013 İsmail Berkan 1: Fundamentals 19 September 2013
  • 26. 26 / 113 • New Product Uncertainty: • Unknown Problem • Unknown Solution • Unknown Customer • The Path to Disaster • Business model built on untested assumptions • Market research serves to support your assumptions rather than validate them • Scale based on the business plan • Lack of customers and markets • Change business at scale (slow and expensive) • Run out of money • Poor execution due to lack of right skills • Flawed business model • External threats • and many more… • A Problem Not Worth Solving • Building the Wrong Solution • Can't Get Customers to Pay • Can't Get Customers Cheaply Enough More… Why They Fail © Copyright 2013 İsmail Berkan 1: Fundamentals 19 September 2013
  • 27. 27 / 113© Copyright 2013 İsmail Berkan 1: Fundamentals 19 September 2013 Steve Blank on Silicon Valley and Failure Click the link below to watch the video (1m22s) http://www.flickr.com/photos/osterwalder/6787544663/ WATCH THE VIDEO CLICK TO
  • 28. 28 / 113© Copyright 2013 İsmail Berkan Most Entrepreneurs Mis-Prioritizing Their Activities Entrepreneurs are doing good things, but not doing them in the right order. More than 80% of the time entrepreneurs are ignoring customer demand in the right product mix until after they have started to scale their business. Harvard Business Review, Beating the Odds When You Launch a New Venture by Clark G. Gilbert and Matthew J. Eyring 19 September 2013
  • 29. 29 / 113 Simple Complex Source: Kathy Sierra Featuritis versus The Happy User Peak © Copyright 2013 İsmail Berkan 2: New Toolset for Startups 19 September 2013
  • 30. 30 / 113 Techies: Try it! Skeptics: No way! Visionaries: Get ahead! Pragmatists: Stick with the herd! Conservatives: Hold on! Early Markets Mainstream Markets Late Market Relative%ofCustomers © Copyright 2013 İsmail Berkan 1: Fundamentals The Early Stage "Black Hole" 19 September 2013
  • 31. 31 / 113 The Five Why's Technique It helps to determine a root cause of a problem. This technique was developed as a systematic problem-solving tool by Taiichi Ohno, the father of the Toyota Production System. © Copyright 2013 İsmail Berkan 1: Fundamentals 19 September 2013
  • 32. 32 / 113 Problem — A new release disabled a feature for customers. 1st Why? — Because a particular server failed. 2nd Why? — Because an obscure subsystem was used in the wrong way. 3rd Why? — The engineer who used it didn’t know how to use it properly. 4th Why? — Because he was never trained. 5th Why? — Because his manager doesn’t believe in training new engineers because he and his team are “too busy.” (a root cause) Solution — Management will dedicate time and budget in training new engineers. What began as a purely technical fault is revealed quickly to be a very human managerial issue. Five Why Example Source: Eric Ries (The Lean Startup) © Copyright 2013 İsmail Berkan 1: Fundamentals 19 September 2013
  • 33. 33 / 113© Copyright 2013 İsmail Berkan 1: Fundamentals 19 September 2013 Eric Ries: Entrepreneurship Can Be Learned Click the link below to watch the video (1m16s) http://youtu.be/gJOz6a1JvPs WATCH THE VIDEO CLICK TO
  • 34. 34 / 113 2: New Toolset for Startups © Copyright 2013 İsmail Berkan 19 September 2013
  • 35. 35 / 113© Copyright 2013 İsmail Berkan History of Management Tools 1602 19081700 20121800 The Dutch East India Company, 1602- 1798. First «modern company» issued first stock certificates. First MBA program was designed in 1908 for big businesses by Harvard. 300 years start, build and grow without formally trained executives. Formal management tools are more than 100 years old. 2010 The Lean Startup – "Creating Value" (2001-2010) The Dot.com Bubble – "Making Money" (1995-2000) 2000 Source: Adapted from Steve Blank (The Startup Owner's Manual) 2: New Toolset for Startups 19 September 2013
  • 36. 36 / 113 Get out of the building! Genchi Genbutsu (現地現物) = Go and See for Yourself = Go to the Source = Get out of the Building (GOOB) & Talk to People © Copyright 2013 İsmail Berkan 2: New Toolset for Startups 19 September 2013
  • 37. 37 / 113 Customer Development Model Customer Discovery Customer Validation Company Building Customer Creation Pivot Turn hypotheses into facts Identify scalable and repeatable sales model Iteration Execute © Copyright 2013 İsmail Berkan 2: New Toolset for Startups The Search for a Business The Growth for a Business Product/Market Fit 19 September 2013
  • 38. 38 / 113 Hypothesis Test Design ExperimentInsight The Customer Development Insight Cycle © Copyright 2013 İsmail Berkan 2: New Toolset for Startups 19 September 2013
  • 39. 39 / 113© Copyright 2013 İsmail Berkan A Product is Customer + Problem + Solution Don't Start Here Start Here 2: New Toolset for Startups 19 September 2013
  • 40. 40 / 113© Copyright 2013 İsmail Berkan Hypotheses and Assumptions 2: New Toolset for Startups converting guesses into facts 19 September 2013
  • 41. 41 / 113 Victory is measured in learning. © Copyright 2013 İsmail Berkan 2: New Toolset for Startups 19 September 2013 Source: Luxr.co
  • 42. 42 / 113© Copyright 2013 İsmail Berkan 2: New Toolset for Startups 19 September 2013 The Customer Development Process by Steve Blank Click the link below to watch the video (3m34s) http://youtu.be/NXR_O_Hwuws WATCH THE VIDEO CLICK TO
  • 43. 43 / 113 Build. Measure. Learn. © Copyright 2013 İsmail Berkan 2: New Toolset for Startups 19 September 2013
  • 44. 44 / 113© Copyright 2013 İsmail Berkan 2: New Toolset for Startups 19 September 2013
  • 45. 45 / 113 + incremental releases make products customers want + reduce waste Lean Startup © Copyright 2013 İsmail Berkan 2: New Toolset for Startups 19 September 2013
  • 46. 46 / 113© Copyright 2013 İsmail Berkan 2: New Toolset for Startups 19 September 2013 The Lean Startup in 150 Seconds by Joone Studios Click the link below to watch the video (2m30s) http://youtu.be/WAdikBfKeD8 WATCH THE VIDEO CLICK TO
  • 47. 47 / 113 STOP WASTING PEOPLE’S TIME & MONEY © Copyright 2013 İsmail Berkan 2: New Toolset for Startups 19 September 2013 Source: Luxr.co
  • 48. 48 / 113 What are the Lean Startup Principles? • Nail it then scale it • Rapid hypothesis testing about market, pricing, customers (customers & markets unknown) • MVP (minimum viable product) • Low burn by design (no scaling until revenue) • Metrics, iteration, agile development • Learn fast (fail fast), pivot or persevere © Copyright 2013 İsmail Berkan 2: New Toolset for Startups 19 September 2013
  • 49. 49 / 113 The Startup Build-Measure-Learn Loop LEARN BUILD MEASURE IDEAS PRODUCT Minimize TOTAL time through the loop DATA IDEAS • Experiments • Validated learning © Copyright 2013 İsmail Berkan 2: New Toolset for Startups (The Startup OODA Loop) 19 September 2013
  • 50. 50 / 113 There’s much more… IDEAS PRODUCTDATA BUILDLEARN MEASURE Code Faster Unit Tests Usability Tests Continuous Integration Incremental Deployment Free & Open-Source Components Cloud Computing Cluster Immune System Just-in-time Scalability Refactoring Developer Sandbox Minimum Viable Product Measure Faster Split Tests Clear Product Owner Continuous Deployment Usability Tests Real-time Monitoring Customer Liaison Learn Faster Split Tests Customer Interviews Customer Development Five Whys Root Cause Analysis Customer Advisory Board Falsifiable Hypotheses Product Owner Accountability Customer Archetypes Cross-functional Teams Semi-autonomous Teams Smoke Tests Funnel Analysis Cohort Analysis Net Promoter Score Search Engine Marketing Real-Time Alerting Predictive Monitoring© Copyright 2013 İsmail Berkan 2: New Toolset for Startups 19 September 2013
  • 51. 51 / 113 What is an Minimum Viable Product (MVP) ? "The minimum amount of effort you have to do to complete exactly one turn of Build-Measure-Learn feedback loop." Eric Ries © Copyright 2013 İsmail Berkan 2: New Toolset for Startups 19 September 2013
  • 52. 52 / 113© Copyright 2013 İsmail Berkan Don’t be misled… MVP a functioning product MVP Experiment (Think: Minimum Viable Experiment) 2: New Toolset for Startups 19 September 2013
  • 53. 53 / 113© Copyright 2013 İsmail Berkan The Minimum Viable Product (MVP) Source: http://LeanSteps.co 2: New Toolset for Startups 19 September 2013
  • 54. 54 / 11319 September 2013© Copyright 2013 İsmail Berkan PRODUCT Minimum Viable Product and Pareto Principle MAIN PROBLEMS (80%)20% MAIN CAUSES SMALL PROBLEMS (20%) MVP "For many events, roughly 80% of the effects come from 20% of the causes." (Pareto Principle) 2: New Toolset for Startups
  • 55. 55 / 113 Running Effective Experiments Source: Ash Maurya (Running Lean) © Copyright 2013 İsmail Berkan 2: New Toolset for Startups 19 September 2013
  • 56. 56 / 113 Maximize for Speed, Learning and Focus Source: Ash Maurya (Running Lean) © Copyright 2013 İsmail Berkan 2: New Toolset for Startups 19 September 2013
  • 57. 57 / 113© Copyright 2013 İsmail Berkan Traditional Product Development Unit of Progress: Advance to Next Stage Waterfall Requirements Specification Design Implementation Verification Maintenance Problem: known Solution: known 19 September 2013 2: New Toolset for Startups Source: Eric Ries
  • 58. 58 / 113© Copyright 2013 İsmail Berkan Product Development at Lean Startup Unit of Progress: Validated Learning About Customers ($$$) Problem: unknown Solution: unknown Customer Development Hypotheses, Experiments, Insights Data, Feedback, Insights Agile Development (XP) 19 September 2013 2: New Toolset for Startups Source: Eric Ries
  • 59. 59 / 113 Reduce INVENTORY, RISK, and WASTE © Copyright 2013 İsmail Berkan 2: New Toolset for Startups 19 September 2013
  • 60. 60 / 113© Copyright 2013 İsmail Berkan Transition Scalable Startup Company Source: Eric Ries 19 September 2013 2: New Toolset for Startups
  • 61. 61 / 11319 September 2013© Copyright 2013 İsmail Berkan Piano Stairs by TheFunTheory.com Click the link below to watch the video (1m48s) http://youtu.be/2lXh2n0aPyw WATCH THE VIDEO CLICK TO 2: New Toolset for Startups
  • 62. 62 / 113 One-page Business Model versus 50-page Business Plan © Copyright 2013 İsmail Berkan 2: New Toolset for Startups 19 September 2013
  • 63. 63 / 113 So, we need a language in order to talk about your startup. © Copyright 2013 İsmail Berkan 2: New Toolset for Startups 19 September 2013
  • 64. 64 / 113 "No business plan survives first contact with customers." Steve Blank "Burn your business plan before it burns you." Alexander Osterwalder Business Model versus Business Plan 20 minutes A single diagram of your business Several weeks or months A document investors make you write that they don't read © Copyright 2013 İsmail Berkan 2: New Toolset for Startups 19 September 2013
  • 65. 65 / 113© Copyright 2013 İsmail Berkan 19 September 2013 Capture your vision on a single page business model
  • 66. 66 / 113© Copyright 2013 İsmail Berkan 19 September 2013
  • 67. 67 / 113© Copyright 2013 İsmail Berkan Business Model Environment Strategies 2: New Toolset for Startups 19 September 2013
  • 68. 68 / 113 A step-by-step blueprint that puts ideas into action © Copyright 2013 İsmail Berkan 2: New Toolset for Startups 19 September 2013 Running Lean is systematic process for iterating from Plan A to a plan that works, before running out of resources. —Ash Maurya
  • 69. 69 / 113 PRODUCT MARKET © Copyright 2013 İsmail Berkan 19 September 2013
  • 70. 70 / 113 The Different Worldviews of a Startup © Copyright 2013 İsmail Berkan 2: New Toolset for Startups 19 September 2013
  • 71. 71 / 113 Entrepreneurs Source: Ash Maurya © Copyright 2013 İsmail Berkan 2: New Toolset for Startups 19 September 2013
  • 72. 72 / 113 Customers Source: Ash Maurya © Copyright 2013 İsmail Berkan 2: New Toolset for Startups 19 September 2013
  • 73. 73 / 113 Investors Source: Ash Maurya © Copyright 2013 İsmail Berkan 2: New Toolset for Startups 19 September 2013
  • 74. 74 / 113 Advisors Source: Ash Maurya © Copyright 2013 İsmail Berkan 2: New Toolset for Startups 19 September 2013
  • 75. 75 / 113 3: Ten Steps for Tech Startups © Copyright 2013 İsmail Berkan 19 September 2013
  • 76. 76 / 113 Founder/ Idea Fit Customer/ Problem Fit Problem/ Solution Fit Product/ Market Fit Bus. Model / Scale Fit Brainstorming Idea Evaluation Purpose Founder(s) Founding Team Lean Canvas Eco-System Primary Users Primary Payers Target Problem Customer Interview Value Proposition Low -fidelity MVP Value Proposition 1-Page Sketching Risky Hypotheses Lean Experiments Early Adopters Blog Features Hi-fidelity MVP Development Team Mature MVP Key Metrics Satisfaction Brand Business Model Revenue Referrals Bootstrap Fund Team Product Dev. Social Media Promotion Profit START INTERVIEW EXPERIMENT SCALEBUILD FOUNDER / MARKET FIT Step 1: Understand the Startup Milestones Source: Adapted from http://LeanSteps.co© Copyright 2013 İsmail Berkan 19 September 2013
  • 77. 77 / 113© Copyright 2013 İsmail Berkan The Lean Startup Hill Source: http://LeanSteps.co 3: Ten Steps for Tech Startups 19 September 2013
  • 78. 78 / 113© Copyright 2013 İsmail Berkan Step 2: Brainstorm and Evaluate Ideas 19 September 2013
  • 79. 79 / 113 Step 3: Validate Founder/Idea Fit • Check if you and team fit with "purpose/idea" • Be passionate about the idea (love what you do) • Have the right skills set to do the job • Other:  Have the right people on your team who shares the same vision  Don't try to do it all by yourself  Dedicate 100% of your/team time to a startup  No parallel jobs or projects – one startup at a time  Say no, if you’re not 100% excited  Get out of your comfort zone  Understand market and users before building anything  Learn quickly from customers to build your product  Get rid of any ego that may damage your startup  Adopt and use the agile and lean tools © Copyright 2013 İsmail Berkan 3: Ten Steps for Tech Startups 19 September 2013
  • 80. 80 / 113 Step 4: Solve a Painful Problem Vitamin Pain Killer Addictive Drug Are we solving a BIG customer problem? Magnitude of a pain/need Rateofcustomerdelight © Copyright 2013 İsmail Berkan 3: Ten Steps for Tech Startups 19 September 2013
  • 81. 81 / 113© Copyright 2013 İsmail Berkan Pain Pays "Any big problem is a big opportunity… No one will pay you to solve a non-problem." —Vinod Khosla (Kleiner Perkins) Shark Bite VS. Mosquito Bite 3: Ten Steps for Tech Startups 19 September 2013
  • 82. 82 / 113 What is the problem? © Copyright 2013 İsmail Berkan 3: Ten Steps for Tech Startups 19 September 2013
  • 83. 83 / 113© Copyright 2013 İsmail Berkan Understand the Problem and Customer • Who has the problem? • What is the top problem/pain? • How is it solved today? "Customers don’t care about your solution. They care about their problems." Dave McClure, 500 Startups "Customers don't want software; they want their problems solved." Mary Poppendieck 3: Ten Steps for Tech Startups 19 September 2013
  • 84. 84 / 113 Focus on the problems not the solutions. Learn early, learn often, and learn fast! © Copyright 2013 İsmail Berkan 3: Ten Steps for Tech Startups 19 September 2013
  • 85. 85 / 113© Copyright 2013 İsmail Berkan 3: Ten Steps for Tech Startups 19 September 2013 Finding the Problem is the Hard Part by Kevin Systrom, CEO of Instagram Click the link below to watch the video (3m28s) http://youtu.be/XETaA1b6ep4 WATCH THE VIDEO CLICK TO
  • 86. 86 / 113 Step 5: Build a Killer Startup Team Startups with multiple founders have a greater chance of success than single-founder startups. © Copyright 2013 İsmail Berkan 3: Ten Steps for Tech Startups "Great things in business are never done by one person, they’re done by a team of people." Steve Jobs 19 September 2013
  • 87. 87 / 113 The Startup Team: Must Have Skills © Copyright 2013 İsmail Berkan 3: Ten Steps for Tech Startups Most people are good at one or maybe two of these, but it’s extremely rare to find someone who can wear all the hats. The ideal team size is two or three people. Vision (Search for the business model + Customer Dev.) Sales & Marketing (Position & Sell it) Product (Frame it/define it) Technology (Build it) 19 September 2013
  • 88. 88 / 113 Is your team aligned? © Copyright 2013 İsmail Berkan 3: Ten Steps for Tech Startups 19 September 2013 Source: Andreas Klinger
  • 89. 89 / 113 Step 6: Create an One-Page Lean Canvas FILL OUT ALL 9 BOXES OF THE CANVAS IN ORDER 1 THRO 9 © Copyright 2013 İsmail Berkan 3: Ten Steps for Tech Startups 19 September 2013
  • 90. 90 / 113 Step 7: Get Out of the Building (GOOB) © Copyright 2013 İsmail Berkan 3: Ten Steps for Tech Startups 1. Talk to potential customers 2. List your assumptions 3. Test the riskiest ones 4. Design experiments 5. Evaluate results 6. Change plans based on evidence 7. Launch small proof-of-concept products 8. Get a few paying customers 9. Make them really happy 10.Repeat, as needed. 19 September 2013 Source: Adapted from Luxr.co
  • 91. 91 / 113© Copyright 2013 İsmail Berkan Some Real MVP Examples 19 September 2013
  • 92. 92 / 113 Fake Door MVP © Copyright 2013 İsmail Berkan 19 September 2013
  • 93. 93 / 113© Copyright 2013 İsmail Berkan 3: Ten Steps for Tech Startups 19 September 2013 "How $40 Saved Us 9 Months and $2MM" by Paul Howe, CEO of Need Feed Click the link below to watch the video (5m21s) https://vimeo.com/24749599 WATCH THE VIDEO CLICK TO
  • 94. 94 / 113 Coming Soon Video Explainer MVP Initial MVP • Screen flow movie of mockups • Landing Page – sign up if you are interested • Posted on Hacker News and Digg Result: 90,000 Signups in Three Days © Copyright 2013 İsmail Berkan 3: Ten Steps for Tech Startups 19 September 2013
  • 95. 95 / 113© Copyright 2013 İsmail Berkan 3: Ten Steps for Tech Startups 19 September 2013
  • 96. 96 / 113 Take the photo Email the photo Concierge and Flinstoning MVP © Copyright 2013 İsmail Berkan 3: Ten Steps for Tech Startups 19 September 2013
  • 97. 97 / 113 Crowdfunding MVP © Copyright 2013 İsmail Berkan 3: Ten Steps for Tech Startups 19 September 2013
  • 98. 98 / 113 Collect Email Adresses & Survey MVP © Copyright 2013 İsmail Berkan 3: Ten Steps for Tech Startups 19 September 2013
  • 99. 99 / 113© Copyright 2013 İsmail Berkan 3: Ten Steps for Tech Startups 19 September 2013
  • 100. 100 / 113 Currency ($) Pitch MVP © Copyright 2013 İsmail Berkan 3: Ten Steps for Tech Startups 19 September 2013
  • 101. 101 / 113© Copyright 2013 İsmail Berkan 3: Ten Steps for Tech Startups 19 September 2013 How to test & validate a startup in 10 weeks Danbits.com Case Study Click the link below to watch the video (7m04s) http://vimeo.com/64520024 WATCH THE VIDEO CLICK TO
  • 102. 102 / 113 Step 8: Pivot or not Pivot Don’t Let This Happen To You: • Thinking and accepting pivot as a failure • Pivoting away from your goals or purpose • Unwilling to pivot • Pivot too often and too soon • Panic at the pivot "A change in STRATEGY without a change in VISION." Eric Ries 70% of every startup would possibly pivot from the initial idea. © Copyright 2013 İsmail Berkan 3: Ten Steps for Tech Startups 19 September 2013
  • 103. 103 / 113 "I'm not leaving you. I'm pivoting to another man." © Copyright 2013 İsmail Berkan 3: Ten Steps for Tech Startups 19 September 2013
  • 104. 104 / 113 Fall in love with your customers, market and business model not with your product/service. Step 9: Build the Right Product © Copyright 2013 İsmail Berkan 3: Ten Steps for Tech Startups “You’ve got to start with the customer experience and work back toward the technology – not the other way around.” Steve Jobs 19 September 2013
  • 105. 105 / 113 Discover Your Business Model Problem Solution Customer Segments Channels Revenue Streams Cost Structure Key Metrics Unfair Advantage Unique Value Proposition © Copyright 2013 İsmail Berkan 3: Ten Steps for Tech Startups 19 September 2013
  • 106. 106 / 113 Step 10: Get Funding Only ask for funding when you have a: • Successful customer/problem/solution fit • Validated product with market • Pivot successfully at least one time • Significant traction • Right team with complementary skills • Delightful solution to a painful problem • Scalable and growing market • Repeatable sales and revenue model • Clear and profitable business model • Competitive advantage and it's better than competitors • Marketing plan on how do you get customers • Serial entrepreneur experience with successful exit What do you need from investors: • How much are you raising and how will you spend the money? © Copyright 2013 İsmail Berkan 3: Ten Steps for Tech Startups 19 September 2013
  • 107. 107 / 113 Source: Steve Blank © Copyright 2013 İsmail Berkan 3: Ten Steps for Tech Startups How to Get a VC Meeting 19 September 2013
  • 108. 108 / 113 Source: Y Combinator © Copyright 2013 İsmail Berkan 19 September 2013
  • 109. 109 / 113© Copyright 2013 İsmail Berkan “Successful startups are the ones who have enough money left over to try their second idea.” —Clayton Christensen, Author and Harvard Professor Change or Fail Fast 19 September 2013
  • 110. 110 / 113© Copyright 2013 İsmail Berkan Summary • Be Honest with Yourself & Discover Truth • Know Your Purpose & Aim to the Happy Spot • Get out of Your Comfort Zone • Be Willing to Search & Discover Your Business Model • Think Big, Start Small & Act Fast • Build a Great Team with Complementary Skills • Be Prepared for the Experiments • Find a Big Customer Pain or Need • Always Get out of the Building (GOOB) • Validate All Unknowns & Assumptions • Maximize Experiments for Focus, Speed & Learning • Focus on the Problems & Customers, Not the Solutions • Nail It, Then Scale It 19 September 2013
  • 111. 111 / 11319 September 2013© Copyright 2013 İsmail Berkan • Stay Lean & Agile • Work on the Business Models not the Business Plans • Code Faster, Measure Faster, Learn Faster & Succeed Faster • Learn Early, Learn Often & Learn Fast • Change (Iterate & Pivot) or Fail Fast & Fail Well • Learn & Be Ready for the Pivot • Don’t be Shy to Feel the Pain • Scale Fast and Smart • Waste No Time, Money or Resources • Approach to the Right Investor at the Right Time • Keep It Simple • Sell First, Build Later • Make Something People Passionately Want Summary (Cont'd.)
  • 112. 112 / 113© Copyright 2013 İsmail Berkan 19 September 2013
  • 113. 113 / 113 İsmail BERKAN Email ismail@ismailberkan.com Twitter https://twitter.com/ismailberkan Linkedin http://tr.linkedin.com/in/ismailberkan © Copyright 2013 İsmail Berkan 19 September 2013