Lean 101

Lean 101
@rafaelbalbijr//rafael@leanstartupmachine.com

Thursday, January 24, 13

About Me

Rafael Balbi On twitter @rafaelbalbijr
• Lean Startup Machine Director of Operations

• Helped a VC raised 5MM USD

• Skillshare Master Teacher on Lean // Business Models

• Founder of not 1 but 2 failed startups


200 WORKSHOPS IN 2013

New York Philadelphia San Diego Shanghai Moscow Riyadh
Boston Los Angeles Toronto Karachi Tel Aviv Sao Paolo
Chicago Washington DC Montreal Lahore Milan London
Austin San Francisco Tokyo Dubai Amsterdam


Making Sh* Happen


Funded Startups

Instacanvas

Borrowmydog.gy

Branch.com


LET’S
ADVANCE THE
SCIENCE OF
ENTREPRENEURSHIP


Let’s break some ice
About Me//About You


The
Abyss


Lean

I will code
I will get funding,
I will write a business
plan


Don’t be a super hero


There’s an easier way

A Startup, is a human institution designed to
create and build new products and services
under conditions of extreme uncertainty…

– Eric Ries


Lean is about...


Experiment - An operation or procedure carried out in
order to discover and test

Planning - A detailed proposal for doing or
achieving something.


Experimenting vs Planning


What is “waste” in a startup?

• Building the wrong thing

• Pre-mature optimization


Successful startups pivot

• YouTube, Facebook, PayPal

• Twitter, Instagram


Make data-driven decisions

• Increase team transparency
• Move faster


Build//Measure//Learn


Some Context
Day Month Year

No.

Who are our Key Partners? What Key Activities do our Value Propositions require? What value do we deliver to the customer? What type of relationship does each of our Customer For whom are we creating value?
Who are our key suppliers? Our Distribution Channels? Which one of our customer’s problems are we helping to solve? Segments expect us to establish and maintain with them? Who are our most important customers?
Which Key Resources are we acquiring from partners? Customer Relationships? What bundles of products and services are we offering to each Customer Segment? Which ones have we established?
Which Key Activities do partners perform? Revenue streams? Which customer needs are we satisfying? How are they integrated with the rest of our business model?
How costly are they?

What Key Resources do our Value Propositions require? Through which Channels do our Customer Segments
Our Distribution Channels? Customer Relationships? want to be reached?
Revenue Streams? How are we reaching them now?
How are our Channels integrated?
Which ones work best?
Which ones are most cost-efficient?
How are we integrating them with customer routines?

What are the most important costs inherent in our business model? For what value are our customers really willing to pay?
Which Key Resources are most expensive? For what do they currently pay?
Which Key Activities are most expensive? How are they currently paying?
How would they prefer to pay?
How much does each Revenue Stream contribute to overall revenues?

This work is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported License.
To view a copy of this license, visit http://creativecommons.org/licenses/by-sa/3.0/
or send a letter to Creative Commons, 171 Second Street, Suite 300, San Francisco, California, 94105, USA.


What a VC taught me..

Concept Phase Execution Phase

Value Prop// //Management
Customer Segment// //Systems


Lean Business Models

Get to your first sale as quickly as possible!

Break it! -> Push


Build//Hypothesize
• What’s
your
idea/
problem
that
you
want

to
solve?

• Customer?

•


Measure//Test

Customer Development -
Get out of the building

Putting what we’ve built in
front of people


Learn//Iterate

Gain Knowledge

Implement


MVP

• The minimal amount of effort you have to exert to
complete one turn around the Build-Measure-
Learn loop. - Eric Ries

• MVP ≠ functioning product


MVP

• MVP = Minimal Viable Experiment


Goals of MVP

Maximize Learning

Minimize opportunity cost

Rapid Testing + Iteration


Types of MVP

Exploration

Pitch

Concierge


Exploration

An interaction with customers
problems to understand behavior


Pitch
Working
towards
a
soluCon

Pitching
the
customer
on
a
soluCon
with
the
intent
of

gaining
back
some
form
of
validaCon
(email
signup,
cash,

leGer
of
intent)


Pitch

1.
Decreasing
Discount

2.
Meta

3.
Innovator


Concierge

Manually
delivering
on
the
soluCon

Minimal
code,
pulling+pushing
levers

No
automaCon


Concierge

1.
One
use
case

2.
Real
life
simulaCon


Customer
Development


Customer Development is the process
by which we go out and test our
hypothesis and assumptions


Customer Development…

1. Sucks…it hurts, a lot

2. Is the cornerstone and key of LEAN

3. Lot’s of Cust Dev Leads to Results


When
is
enough,
enough?

Look for a Pattern


CUSTOMER


Persona Development
Project Name: Team Leader Name: Experiment #:

Person Pain
Factual information State the problem you believe
about your target customer. your target customers have,
that your solution solves for.

Behavior Goals
Existing behavior they exhibit now, What goals are they trying to accomplish
because they don’t have your solution. through the behavior, that your solution will do better?


Get Out of the Building

“No business plan survives
ﬁrst contact with customers.”
- Steve Blank


What’s the point?

• Uncovers how users think and behave

• Validates assumptions/removes bias

• Shows difference between intent and reality

• Provides direction and data instead of opinion
or speculation

• Provides the ability to inform design


It is NOT

• Multiple Choice Surveys

• Focus Groups

• Your Personal (Biased!) Experience

• Conversations with Friends


Effective Interviewing


Go in with 2 to 3 objectives
and have a real conversation.
Brant Cooper

Know your goals and questions.
Giff Constable

Use a script.
Ash Maurya


No Selling Allowed


3 Point Interview

1.
Do
You
{insert
problem}
2.
Tell
me
a
story
about
the
last
Cme
you
dealt
with
{insert
problem}
3.
What’s
your
ideal
soluCon
for
{insert
problem}


Track
Data
• Write everything down RIGHT after

• Set up time to evaluate data

• Have one location where everything is
stored


Validation
Board

“A startup’s runway is the number
of pivots it can still make.”
-Eric Ries


GOAL: Decrease Cash Spent
Between Pivots


Between Pivots

PRODUCT =
EXPERIMENT


Between Pivots

PROGRESS =
PRODUCT =
VALIDATED
EXPERIMENT
LEARNING


Ok...so?


What
a
VC
taught
me...

VC’s
invest
to
get
a
return
on
$$$
-‐want
$
back
w/
i*

Raise
skillset...lessen
risk...raise

probability
of
funding


Business Models

Concept Phase Execution Phase

Value Prop// //Management
Customer Segment// //Systems

want
to
get
out
of
concept
phase
as
quickly
as

possible.
business
become
proﬁtable
at
SCALE

3D
prinMng
-‐
will
do
to
hardware
what

the
internet
did
to
soNware

Nanotech Singularity RoboMcs

Africa/China/Brasil/India


leanstartupmachine.com

validaMonboard.com

rafael@leanstartupmachine.com

@rafaelbalbijr


Lean 101

Recommended

Recommended

More Related Content

Similar to Lean 101

Similar to Lean 101 (20)

Recently uploaded

Recently uploaded (20)

Lean 101