2010 03 09 the lean startup - gdc

Building a Virtual World: Lean Startup Style,[object Object],#leanstartup,[object Object],Eric Ries (@ericries),[object Object],http://StartupLessonsLearned.com,[object Object]

Entrepreneurship = Awesome,[object Object],It is the best time in the history of the world to be an entrepreneur,[object Object],Costs are falling in all industries,[object Object],Barriers are being destroyed,[object Object],Disruption and chaos are everywhere,[object Object]

Why build a startup?,[object Object],Only entrepreneurship combines these three elements,[object Object],Change the world,[object Object],Build an organization of lasting value,[object Object],Make customers’ lives better,[object Object]

Most Startups Fail,[object Object]

Most Startups Fail,[object Object],But it doesn’t have to be that way. ,[object Object],We can do better. ,[object Object],This talk is about how.,[object Object]

What is a startup?,[object Object],A startup is a human institution designed to deliver a new product or service under conditions of extreme uncertainty. ,[object Object],Nothing to do with size of company, sector of the economy, or industry,[object Object]

Entrepreneurship is management,[object Object],Our goal is to create an institution, not just a product,[object Object],Traditional management practices fail,[object Object], “general management” as taught to MBAs,[object Object],Need practices and principles geared to the startup context of extreme uncertainty,[object Object],Not just for “two guys in a garage”,[object Object]

The Pivot,[object Object],What do successful startups have in common?,[object Object],They started out as digital cash for PDAs, but evolved into online payments for eBay. ,[object Object],They started building BASIC interpreters, but evolved into the world's largest operating systems monopoly. ,[object Object],They were shocked to discover their online games company was actually a photo-sharing site.,[object Object],Pivot: change directions but stay grounded in what we’ve learned. ,[object Object],http://startuplessonslearned.blogspot.com/2009/06/pivot-dont-jump-to-new-vision.html,[object Object]

Speed Wins,[object Object],if we can reduce the time between major iterations,[object Object],we can increase our odds of success,[object Object]

A Tale of Two Startups,[object Object]

Stealth Startup Circa 2001,[object Object]

All about the team,[object Object]

A good plan?,[object Object],Start a company with a compelling long-term vision. ,[object Object],Raise plenty of capital.,[object Object],Hire the absolute best and the brightest.,[object Object],Hire an experienced management team with tons of startup experience.,[object Object],Focus on quality. ,[object Object],Build a world-class technology platform.,[object Object],Build buzz in the press and blogosphere.,[object Object]

Achieving Failure,[object Object],Company failed ,[object Object],$40MM and five years of pain,[object Object],Crippled by “shadow beliefs” that destroyed the effort of all those smart people.,[object Object]

Shadow Belief #1,[object Object],We know what customers want. ,[object Object]

Shadow Belief #2,[object Object],We can accurately predict the future. ,[object Object]

Shadow Belief #3,[object Object],Advancing the plan is progress. ,[object Object]

IMVU,[object Object], ,[object Object]

New plan,[object Object],Shipped in six months – a horribly buggy beta product,[object Object],Charged from day one,[object Object],Shipped multiple times a day (by 2008, on average 50 times a day),[object Object],No PR, no launch,[object Object],Results 2009: profitable, revenue > $20MM,[object Object]

Making Progress,[object Object],In a lean transformation, question #1 is – which activities are value-creating and which are waste?,[object Object],In traditional business, value is created by delivering products or services to customers,[object Object],In a startup, the product and customer are unknowns,[object Object],We need a new definition of value for startups,[object Object]

Traditional Product Development,[object Object],Unit of Progress: Advance to Next Stage,[object Object],Waterfall,[object Object],Requirements,[object Object],Specification,[object Object],Design,[object Object],Problem: known,[object Object],Solution: known,[object Object],Implementation,[object Object],Verification,[object Object],Maintenance,[object Object]

Agile Product Development,[object Object],Unit of Progress: A line of Working Code,[object Object],“Product Owner” or in-house customer,[object Object],Problem: known,[object Object],Solution: unknown,[object Object]

Product Development at Lean Startup,[object Object],Unit of Progress: Validated Learning About Customers ($$$),[object Object],Customer Development,[object Object],Hypotheses,,[object Object],Experiments,,[object Object],Insights,[object Object],Problem: unknown,[object Object],Data,,[object Object],Feedback,,[object Object],Insights,[object Object],Solution: unknown,[object Object]

Minimize TOTAL time through the loop,[object Object],IDEAS,[object Object],LEARN,[object Object],BUILD,[object Object],DATA,[object Object],CODE,[object Object],MEASURE,[object Object]

How to build a Lean Startup,[object Object],Let’s talk about some specifics. ,[object Object],Minimum viable product,[object Object],Five why’s ,[object Object]

Minimum Viable Product,[object Object],IDEAS,[object Object],LEARN,[object Object],BUILD,[object Object],Learn Faster,[object Object],Customer Development,[object Object],Five Whys,[object Object],Build Faster,[object Object],Continuous Deployment,[object Object],Small Batches,[object Object],Minimum Viable Product,[object Object],Refactoring,[object Object],DATA,[object Object],CODE,[object Object],MEASURE,[object Object],Measure Faster,[object Object],Split Testing,[object Object],Actionable Metrics,[object Object],Net Promoter Score,[object Object],SEM ,[object Object]

Why do we build products?,[object Object],Delight customers,[object Object],Get lots of them signed up,[object Object],Make a lot of money,[object Object],Realize a big vision; change the world,[object Object],Learn to predict the future,[object Object]

Possible Approaches,[object Object],“Maximize chances of success”,[object Object],build a great product with enough features that increase the odds that customers will want it,[object Object],Problem: no feedback until the end, might be too late to adjust,[object Object], “Release early, release often”,[object Object],Get as much feedback as possible, as soon as possible,[object Object],Problem: run around in circles, chasing what customers think they want,[object Object]

Minimum Viable Product,[object Object],The minimum set of features needed to learn from earlyvangelists – visionary early adopters,[object Object],Avoid building products that nobody wants,[object Object],Maximize the learning per dollar spent,[object Object],Probably much more minimum than you think!,[object Object]

Minimum Viable Product,[object Object],Visionary customers can “fill in the gaps” on missing features, if the product solves a real problem,[object Object],Allows us to achieve a big vision in small increments without going in circles,[object Object],Requires a commitment to iteration,[object Object],MVP is only for BIG VISION products; unnecessary for minimal products.,[object Object]

Techniques,[object Object],Smoke testing with landing pages, AdWords,[object Object],SEM on five dollars a day,[object Object],In-product split testing,[object Object],Paper prototypes,[object Object],Customer discovery/validation,[object Object],Removing features (“cut and paste”),[object Object]

Fears,[object Object],False negative: “customers would have liked the full product, but the MVP sucks, so we abandoned the vision”,[object Object],Visionary complex: “but customers don’t know what they want!”,[object Object],Too busy to learn: “it would be faster to just build it right, all this measuring distracts from delighting customers”,[object Object]

Five Whys,[object Object],IDEAS,[object Object],Code Faster,[object Object],Learn Faster,[object Object],BUILD,[object Object],LEARN,[object Object],Continuous,[object Object],Deployment,[object Object],Five Whys Root,[object Object],Cause Analysis,[object Object],CODE,[object Object],DATA,[object Object],Measure Faster,[object Object],MEASURE,[object Object],Rapid Split Tests,[object Object]

Five Whys Root Cause Analysis,[object Object],[object Object]

Ask “why” five times when something unexpected happens.

Make proportional investments in prevention at all five levels of the hierarchy.

Behind every supposed technical problem is usually a human problem. Fix the cause, not just the symptom.,[object Object]

Get Started Today,[object Object],You are ready to do this, no matter ,[object Object],who you are,[object Object],what job you have,[object Object],what stage of company you’re in,[object Object],Get started now, today. ,[object Object]

Thanks!,[object Object],[object Object]

http://StartupLessonsLearned.com/

In print: http://bit.ly/SLLbookbeta

Getting in touch (#leanstartup)

2010 03 09 the lean startup - gdc

2010 03 09 the lean startup - gdc

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2010 03 09 the lean startup - gdc

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