Uploaded byEric Ries
Eric Ries - The Lean Startup - Google Tech Talk
This document discusses Lean Startup principles including validated learning, building-measuring-learning quickly through iterations, and innovation accounting. It emphasizes that entrepreneurship is management, startups are experiments, and most successful startups pivot their vision based on customer feedback. The Lean Startup methodology advocates for developing minimum viable products and continuously deploying, measuring and improving through techniques like A/B testing to rapidly learn what customers want.
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Eric Ries - The Lean Startup - Google Tech Talk
- 1. The Lean Startup#leanstartupEric Ries (@ericries)http://StartupLessonsLearned.com
- 3. Lean Startup PrinciplesEntrepreneursare everywhereEntrepreneurship is managementValidated LearningBuild – Measure - LearnInnovation Accounting
- 4. Lean Startup PrinciplesEntrepreneursare everywhere
- 5. What is astartup?A startup is a human institution designed to deliver a new product or service under conditions of extreme uncertainty.
- 6. Nothing to dowith size of company, sector of the economy, or industryWhat is a startup?STARTUP =EXPERIMENT
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- 11. Who to BlameFatherof scientific managementStudy work to find the best wayManagement by exceptionStandardize work into tasksCompensate workers based on performance“In the past, the man was first. In the future, the system will be first.” (1911)Frederick Winslow Taylor(1856 – 1915)
- 12. Lean Startup PrinciplesEntrepreneursare everywhereEntrepreneurship is management
- 13. Entrepreneurship is managementOurgoal is to create an institution, not just a product
- 14. Traditional management practicesfail- “general management” as taught to MBAsNeed practices and principles geared to the startup context of extreme uncertainty
- 15. Not just for“two guys in a garage”The Pivot
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- 17. The PivotWhat dosuccessful startups have in common?
- 18. They started outas digital cash for PDAs, but evolved into online payments for eBay.
- 19. They started buildingBASIC interpreters, but evolved into the world's largest operating systems monopoly.
- 20. They were shockedto discover their online games company was actually a photo-sharing site.
- 21. Pivot: change directionsbut stay grounded in what we’ve learned. Speed WinsIf we can reduce the time between pivotsWe can increase our odds of successBefore we run out of money
- 22. Lean Startup PrinciplesEntrepreneursare everywhereEntrepreneurship is managementValidated Learning
- 23. Traditional Product DevelopmentUnitof Progress: Advance to Next StageWaterfallRequirementsSpecificationsDesignProblem: knownSolution:knownImplementationVerificationMaintenance
- 24. Achieving FailureIf we’rebuilding something nobody wants, what does it matter if we accomplish it:On time?On budget?With high quality?With beautiful design?Achieving Failure = successfully executing a bad plan The Lean RevolutionW. Edwards Deming(1900 – 1993)TaiichiOhno - 大野 耐(1912 – 1990)“The customer is the most important part of the production line.” -Deming
- 25. Agile Product DevelopmentUnitof Progress: A line of Working Code“Product Owner” or in-house customerProblem: knownSolution:unknownKent Beck(still alive)
- 26. Lean StartupUnit ofProgress: Validated LearningSteve Blank(still alive)Customer DevelopmentHypotheses, Experiments,InsightsProblem:unknownData, Feedback,InsightsSolution:unknownAgile Development
- 27. Lean Startup PrinciplesEntrepreneursare everywhereEntrepreneurship is managementValidated LearningBuild – Measure - Learn
- 28. Minimize TOTAL timethrough the loop
- 29. There’s much more…BuildFasterUnit TestsUsability TestsContinuous IntegrationIncremental DeploymentFree & Open-SourceCloud ComputingCluster Immune SystemJust-in-time ScalabilityRefactoringDeveloper SandboxMinimum Viable ProductLearn FasterSplit TestsCustomer DevelopmentFive WhysCustomer Advisory BoardFalsifiable HypothesesProduct OwnerAccountabilityCustomer ArchetypesCross-functional TeamsSemi-autonomous TeamsSmoke TestsMeasure FasterFunnel AnalysisCohort AnalysisNet Promoter ScoreSearch Engine MarketingPredictive MonitoringMeasure FasterSplit TestsContinuous DeploymentUsability TestsReal-time Monitoring & AlertingCustomer Liaison
- 30. Lean Startup PrinciplesEntrepreneursare everywhereEntrepreneurship is managementValidated LearningBuild – Measure - LearnInnovation Accounting
- 31. Innovation AccountingThe ThreeLearning MilestonesEstablish the baselineBuild a Minimum Viable Product (MVP)
- 32. Measure how customersbehave right nowTune the engine- Experiment to see if we can improve metrics from the baseline towards the ideal Pivot or persevere- When experiments reach diminishing returns, it’s time to pivot.
- 33. QuestionsHow do weknow when to pivot?Vision or Strategy or Product?What should we measure?How do products grow?Are we creating value?What’s in the MVP?Can we go faster?
- 35. Thanks!Buy the book@ http://lean.st
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- 38. Getting in touch(#leanstartup)
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- 44. Myth #1MythLean meanscheap. Lean startups try to spend as little money as possible.Truth The Lean Startup method is not about cost, it is about speed.
- 45. Myth #2MythThe LeanStartup is only for Web 2.0/internet/consumer software companies.Truth The Lean Startup applies to all companies that face uncertainty about what customers will want.
- 46. Myth #3MythLean Startupsare small bootstrapped startups.Truth Lean Startups are ambitious and are able to deploy large amounts of capital.
- 47. Myth #4MythLean Startupsreplace vision with dataor customer feedback.Truth Lean Startups are driven by a compelling vision, and are rigorous about testing each element of this vision
- 48. Lean Startup PrinciplesEntrepreneursare everywhereEntrepreneurship is managementValidated LearningBuild – Measure - LearnInnovation Accounting
- 49. Minimum Viable ProductVisionarycustomers can “fill in the gaps” on missing features, if the product solves a real problem
- 50. Allows us toachieve a big vision in small increments without going in circles
- 51. Requires a commitmentto iteration
- 52. MVP is onlyfor BIG VISION products; unnecessary for minimal products.Continuous DeploymentLearn FasterCustomer DevelopmentFive WhysBuild FasterContinuous DeploymentSmall BatchesMinimum Viable ProductRefactoringMeasure FasterSplit TestingActionable MetricsNet Promoter ScoreSEM
- 53. Continuous Deployment PrinciplesHaveevery problem onceStop the line when anything failsFast response over prevention
- 54. Continuous DeploymentDeploy newsoftware quickly
- 55. At IMVU timefrom check-in to production = 20 minutes
- 56. Tell a goodchange from a bad change (quickly)
- 57. Revert a badchange quickly
- 58. And “shut downthe line”
- 59. Work in smallbatches
- 60. At IMVU, alarge batch = 3 days worth of work
- 61. Break large projectsdown into small batchesCluster Immune SystemWhat it looks like to ship one piece of code to production:Run tests locally (SimpleTest, Selenium)
- 62. Everyone has acomplete sandbox
- 63. Continuous Integration Server(BuildBot)
- 64. All tests mustpass or “shut down the line”
- 65. Automatic feedback ifthe team is going too fast
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- 67. Monitor cluster andbusiness metrics in real-time
- 68. Reject changes thatmove metrics out-of-bounds
- 69. Alerting & Predictivemonitoring (Nagios)
- 70. Monitor all metricsthat stakeholders care about
- 71. If any metricgoes out-of-bounds, wake somebody up
- 72. Use historical trendsto predict acceptable bounds
- 73. When customers seea failure
- 74. Fix the problemfor customers
- 75. Improve your defensesat each levelMinimum Viable ProductLearn FasterCustomer DevelopmentFive WhysBuild FasterContinuous DeploymentSmall BatchesMinimum Viable ProductRefactoringMeasure FasterSplit TestingActionable MetricsNet Promoter ScoreSEM
- 76. Why do webuild products?Delight customers
- 77. Get lots ofthem signed up
- 78. Make a lotof money
- 79. Realize a bigvision; change the world
- 80. Learn to predictthe futurePossible Approaches“Maximize chances of success”
- 81. build a greatproduct with enough features that increase the odds that customers will want it
- 82. Problem: no feedbackuntil the end, might be too late to adjust
- 83. “Release early,release often”
- 84. Get as muchfeedback as possible, as soon as possible
- 85. Problem: run aroundin circles, chasing what customers think they wantMinimum Viable ProductThe minimum set of features needed to learn from earlyvangelists – visionary early adopters
- 86. Avoid building productsthat nobody wants
- 87. Maximize the learningper dollar spent
- 88. Probably much moreminimum than you think!Minimum Viable ProductVisionary customers can “fill in the gaps” on missing features, if the product solves a real problem
- 89. Allows us toachieve a big vision in small increments without going in circles
- 90. Requires a commitmentto iteration
- 91. MVP is onlyfor BIG VISION products; unnecessary for minimal products.TechniquesSmoke testing with landing pages, AdWords
- 92. SEM on fivedollars a day
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- 96. Removing features (“cutand paste”)FearsFalse negative: “customers would have liked the full product, but the MVP sucks, so we abandoned the vision”
- 97. Visionary complex: “butcustomers don’t know what they want!”
- 98. Too busy tolearn: “it would be faster to just build it right, all this measuring distracts from delighting customers”Five WhysLearn FasterFive Whys RootCause AnalysisCode FasterContinuous DeploymentMeasure FasterRapid Split Tests
- 99. Five Whys RootCause AnalysisA technique for continuous improvement of company process.
- 100. Ask “why” fivetimes when something unexpected happens.
- 101. Make proportional investmentsin prevention at all five levels of the hierarchy.
- 102. Behind every supposedtechnical problem is usually a human problem. Fix the cause, not just the symptom.Rapid Split TestsLearn FasterFive Whys RootCause AnalysisCode FasterContinuous DeploymentMeasure FasterRapid Split Tests
- 103. Split-testing all thetimeA/B testing is key to validating your hypotheses
- 104. Has to besimple enough for everyone to use and understand it
- 105. Make creating asplit-test no more than one line of code:if( setup_experiment(...) == "control" ) { // do it the old way} else { // do it the new way}
- 106. The AAA’s ofMetricsActionable
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- 108. AuditableMeasure the MacroAlwayslook at cohort-based metrics over time
- 109. Split-test the small,measure the largeLean Startup PrinciplesEntrepreneurs are everywhereEntrepreneurship is managementValidated LearningInnovation Accounting
- 110. Minimum Viable ProductTheminimum set of features needed to learn from earlyvangelists – visionary early adopters
- 111. Avoid building productsthat nobody wants
- 112. Maximize the learningper dollar spent
- 113. Probably much moreminimum than you think!Minimum Viable ProductVisionary customers can “fill in the gaps” on missing features, if the product solves a real problem
- 114. Allows us toachieve a big vision in small increments without going in circles
- 115. Requires a commitmentto iteration
- 116. MVP is onlyfor BIG VISION products; unnecessary for minimal products.Split-testing all the timeA/B testing is key to validating your hypotheses
- 117. Has to besimple enough for everyone to use and understand it
- 118. Make creating asplit-test no more than one line of code:if( setup_experiment(...) == "control" ) { // do it the old way} else { // do it the new way}
- 119. The AAA’s ofMetricsActionable
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- 121. AuditableMeasure the MacroAlwayslook at cohort-based metrics over time
- 122. Split-test the small,measure the largeI’
Editor's Notes
- #16 I’m not leaving you, I’m pivoting to another man
- #27 Conference structure
- #34 Truth: The Lean Startup method is not about cost, it is about speed. Lean Startups waste less money, because they use a disciplined approach to testing new products and ideas. Lean, when used in the context of lean startup, refers to a process of building companies and products using lean manufacturing principles applied to innovation. That process involves rapid hypothesis testing, validated learning about customers, and a disciplined approach to product development.
- #35 Truth: The Lean Startup methodology applies to all companies that face uncertainty about what customers will want. This is true regardless of industry or even scale of company: many large companies depend on their ability to create disruptive innovation. Those general managers are entrepreneurs, too. And they can benefit from the speed and discipline of starting with a minimum viable product and then learning and iterating continuously.
- #36 Truth: There’s nothing wrong with raising venture capital. Many lean startups are ambitious and are able to deploy large amounts of capital. What differentiates them is their disciplined approach to determining when to spend money: after the fundamental elements of the business model have been empirically validated. Because lean startups focus on validating their riskiest assumptions first, they sometimes charge money for their product from day one – but not always.
- #37 Truth: Lean Startups are driven by a compelling vision, and they are rigorous about testing each element of this vision against reality. They use customer development, split-testing, and actionable analytics as vehicles for learning about how to make their vision successful. But they do not blindly do what customers tell them, nor do they mechanically attempt to optimize numbers. Along the way, they pivot away from the elements of the vision that are delusional and double-down on the elements that show promise.
- #63 I’m not leaving you, I’m pivoting to another man