Lean Startup Basics

Lean Startup Basics

OutcomeTest if your intuition is solid enough to build a business

around it

Test with experiments your assumptions.

Measure your progress

Make decisions based on numbers

Reduce uncertainty

What is Lean Startup?“The Lean Startup method teaches you how to drive a startup-how to steer, when to turn, and when to persevere-and grow a business

with maximum acceleration.”

Origins

Origins

• Lean Manufacturing (Toyota): Systematically eliminate waste, continuously improve

• Agile Software Development: Deliver often, deliver early, rapid iterations

• Customer Development: test & validate your assumptions

Why

• Eliminate uncertainty with tools that help you test your vision continuously

• Human beings suck at predicting what customers will buy

The right question

Can we build this product?

VS

Should we build this product?

End Game

• Find your market before you run out of resources

• Building a product is the easy part

• Don’t build a solution and then search for a problem

Traditional Entrepreneurial Process

Idea Business Plan Raise Money

Build Launch Market

Fail

Issues with Traditional Path

• Feedback from customers begins once product is launched, making changes often impossible

• No way to track success

Forget the business plan

• They don’t survive the talk with the first customer (S. Blank)

• projections based on nothing

Customer DevelopmentFramework for:

• Discover & Validate right market for your idea

• Build right product features to solve customer needs

• Test correct way to acquire and convert customers

• Deploy right organisation and resources to scale

Objectives

• Problem/Solution fit (Customer Discovery): Find a problem big enough customers will pay for your solution

• Product/Market fit (Customer Validation): Build the product with only features that deliver value to the customer

• Scale (Company Building): Increase exponentially your user/customer base

Tools

• Business Model/Lean/Value Proposition Canvas

• Javelin Board

• Lean Stack

• Lean Launchpad

Test your assumptions: Experiments

• Turn a hypothesis into a measurable outcome

• Identify riskiest assumption

• Define Success Metrics

• Run the Experiment

• Pivot or Persevere

Experiment Objective

• Make your build, measure, learn loop faster all the time

Build

• MVP = Minimum Viable Product

• Easiest/Fastest way to deliver value to your customer

• Not perfect

If you are not embarrassed by the first version of your product, you’ve launched too late. Reidd Hoffman - Linkedin

MVP Types

• Discovery Interviews

• Landing Page

• Concierge

• Mockup

Measure

• Qualitative not quantitative

• Do things that don’t scale

• Focus on important metrics: AARRR (Lean Marketing Funnel)

Learn

• Change hypothesis

• Proceed if hypothesis is validated

• Discover new problems to solve

Pivot

• Structured course correction to test new fundamental hypothesis

• A change in your plan in the process of finding a repeatable and scalable business model

• Based on data

Grow

• Do things that scale

• Use best performing tested channels

• Build infrastructure needed to scale

Get Out Of The Building

• Talk face to face with customers

• Best way to focus on qualitative data

• Avoid engineering approach

Case Studies

Books

• The Entrepreneur’s Guide to Customer Development - Brant Cooper, Patrick Vlaskovits

• Running Lean - Ash Maurya

• Lean Customer Development - Cindy Alvarez

• Value Proposition Design - Alexander Osterwalder

stevenballiano.com

steven.balliano@gmail.com

@SJBalliano