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Lean Startup An overview

Lean Startup talk at Business Bootcamp, Brunel

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Slides that I used at the Startup Bootcamp one-day event a

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Page 1: Lean Startup talk at Business Bootcamp, Brunel

Lean StartupAn overview

Page 2: Lean Startup talk at Business Bootcamp, Brunel

Disclaimer

Page 3: Lean Startup talk at Business Bootcamp, Brunel

Disclaimer

• No silver bullets

• No substitute for experience

• Just one tool

• Not the whole tool

Page 4: Lean Startup talk at Business Bootcamp, Brunel

Disclaimer

• No silver bullets

• No substitute for experience

• Just one tool

• Not the whole tool

Page 5: Lean Startup talk at Business Bootcamp, Brunel

Disclaimer

• No silver bullets

• No substitute for experience

• Just one tool

• Not the whole tool

Page 6: Lean Startup talk at Business Bootcamp, Brunel

Disclaimer

• No silver bullets

• No substitute for experience

• Just one tool

• Not the whole tool

Page 7: Lean Startup talk at Business Bootcamp, Brunel

“Lean Startup”

Page 8: Lean Startup talk at Business Bootcamp, Brunel

What is a startup?

Page 9: Lean Startup talk at Business Bootcamp, Brunel

What is a startup?

“The act or fact of starting something; a setting in motion.”

-Dictionary (useless)

Page 10: Lean Startup talk at Business Bootcamp, Brunel

What is a startup?

“Startups are fresh, new companies trying to do cool stuff.”

-Instinctive (still mostly useless)

Page 11: Lean Startup talk at Business Bootcamp, Brunel

What is a startup?

“A startup is an organization formed to search for a repeatable and scalable business model.”

-Steve Blank

Page 12: Lean Startup talk at Business Bootcamp, Brunel

What is a startup?

“A startup is a human institution designed to deliver a new product or service under conditions of extreme uncertainty.”

-Eric Ries

Page 13: Lean Startup talk at Business Bootcamp, Brunel

What is a startup?

“...essentially a startup is a new business designed for scale.”“A startup is a small company that takes on a hard technical problem.”

-Paul Graham

Page 14: Lean Startup talk at Business Bootcamp, Brunel

What is a startup?

“A startup is a business which has ambitions and plans to grow by a large factor over the next few years.”

-Me!

Page 15: Lean Startup talk at Business Bootcamp, Brunel

Key points

• Uncertainty, search, difficulty

• Ambition, growth

• Methods, plans

• Business, money

Page 16: Lean Startup talk at Business Bootcamp, Brunel

How should I build a startup?

Page 17: Lean Startup talk at Business Bootcamp, Brunel

Some typical approaches that don’t

work

Page 18: Lean Startup talk at Business Bootcamp, Brunel

1. First, write a business plan...

Page 19: Lean Startup talk at Business Bootcamp, Brunel

2. Raise lots of money and then figure it out

Page 20: Lean Startup talk at Business Bootcamp, Brunel

3. Plan it, build it and they will come

Page 21: Lean Startup talk at Business Bootcamp, Brunel

4. Get lots of users and figure the rest out later

Page 22: Lean Startup talk at Business Bootcamp, Brunel

5. Don’t spend anything at all.

Page 23: Lean Startup talk at Business Bootcamp, Brunel

A better method... “Lean”

Page 24: Lean Startup talk at Business Bootcamp, Brunel

Lean is not...

• Cheap

• Rigid

• Limited to simple ideas

• The magic key to success

Page 25: Lean Startup talk at Business Bootcamp, Brunel

Lean is...

• A method to organise the chaos

• Less waste

• Less risk

• More learning

• A common language

Page 26: Lean Startup talk at Business Bootcamp, Brunel

The fundamental principle of “Lean”

Page 27: Lean Startup talk at Business Bootcamp, Brunel

• A business is there to achieve a purpose

• Building things people don’t need is waste

• Building large things that people don’t need is large waste

• You have no idea what you’re doing

• You have no idea what to build

Page 28: Lean Startup talk at Business Bootcamp, Brunel

• A business is there to achieve a purpose

• Building things people don’t need is waste

• Building large things that people don’t need is large waste

• You have no idea what you’re doing

• You have no idea what to build

Page 29: Lean Startup talk at Business Bootcamp, Brunel

• A business is there to achieve a purpose

• Building things people don’t need is waste

• Building large things that people don’t need is large waste

• You have no idea what you’re doing

• You have no idea what to build

Page 30: Lean Startup talk at Business Bootcamp, Brunel

• A business is there to achieve a purpose

• Building things people don’t need is waste

• Building large things that people don’t need is large waste

• You have no idea what you’re doing

• You have no idea what to build

Page 31: Lean Startup talk at Business Bootcamp, Brunel

• A business is there to achieve a purpose

• Building things people don’t need is waste

• Building large things that people don’t need is large waste

• You have no idea what you’re doing

• You have no idea what to build

Page 32: Lean Startup talk at Business Bootcamp, Brunel

Sounds hard!

Page 33: Lean Startup talk at Business Bootcamp, Brunel

The “Lean” approach:

Build the smallest, easiest, smartest thing that teaches you what you need to learn

Page 34: Lean Startup talk at Business Bootcamp, Brunel

The “Lean” approach:

Build the smallest, easiest, smartest thing that teaches you what you need to learn

Page 35: Lean Startup talk at Business Bootcamp, Brunel

What do you need to learn?

Page 36: Lean Startup talk at Business Bootcamp, Brunel

Do people want it?

Page 37: Lean Startup talk at Business Bootcamp, Brunel

Can I sell it?

Page 38: Lean Startup talk at Business Bootcamp, Brunel

Can I build it?

Page 39: Lean Startup talk at Business Bootcamp, Brunel

A startup plan

1. Do people want it?

2. Can I sell it?

3. Can I build it?

Page 40: Lean Startup talk at Business Bootcamp, Brunel
Page 41: Lean Startup talk at Business Bootcamp, Brunel

The “Lean” approach:

Build the smallest, easiest, smartest thing that teaches you what you need to learn

Page 42: Lean Startup talk at Business Bootcamp, Brunel

Minimum Viable Product

Page 43: Lean Startup talk at Business Bootcamp, Brunel

Minimum Viable Product

• Landing page

• Paper prototype

• Presentation/pitch

• Anything that enables you to learn!

Page 44: Lean Startup talk at Business Bootcamp, Brunel

Minimum Viable Product

• Landing page

• Paper prototype

• Presentation/pitch

• Anything that enables you to learn!

Page 45: Lean Startup talk at Business Bootcamp, Brunel

Minimum Viable Product

• Landing page

• Paper prototype

• Presentation/pitch

• Anything that enables you to learn!

Page 46: Lean Startup talk at Business Bootcamp, Brunel

Minimum Viable Product

• Landing page

• Paper prototype

• Presentation/pitch

• (Fake) demo video

• “Concierge MVP”

• Anything that enables you to learn!

Page 47: Lean Startup talk at Business Bootcamp, Brunel

Minimum Viable Product

• Landing page

• Paper prototype

• Presentation/pitch

• (Fake) demo video

• “Concierge MVP”

• Anything that enables you to learn!

Page 48: Lean Startup talk at Business Bootcamp, Brunel

Minimum Viable Product

• Landing page

• Paper prototype

• Presentation/pitch

• (Fake) demo video

• “Concierge MVP”

• Anything that enables you to learn!

Page 49: Lean Startup talk at Business Bootcamp, Brunel

MVP

• MVP is not a crappy version of the product.

• MVP is driven by the questions you need answered.

Page 50: Lean Startup talk at Business Bootcamp, Brunel

The Lean Cycle

Page 51: Lean Startup talk at Business Bootcamp, Brunel

The Lean Cycle (backwards)

Metric

Hypothesis Experiment

Text

Page 52: Lean Startup talk at Business Bootcamp, Brunel

Lean Toolkit

Page 53: Lean Startup talk at Business Bootcamp, Brunel

Metrics

Page 54: Lean Startup talk at Business Bootcamp, Brunel
Page 55: Lean Startup talk at Business Bootcamp, Brunel
Page 56: Lean Startup talk at Business Bootcamp, Brunel
Page 57: Lean Startup talk at Business Bootcamp, Brunel
Page 58: Lean Startup talk at Business Bootcamp, Brunel

Up and to the right...

Page 59: Lean Startup talk at Business Bootcamp, Brunel

Vanity metrics

• User signups

• Traffic

• Retention rate

• Any metric in a vacuum

Page 60: Lean Startup talk at Business Bootcamp, Brunel

Good metrics

• Mostly: A/B test results

• Cohort breakdowns

• Retention rates over time

• Activity stream

• Any metric that’s actionable

Page 61: Lean Startup talk at Business Bootcamp, Brunel

Actionable?

• Must be related to the key engines of your business...

Page 62: Lean Startup talk at Business Bootcamp, Brunel

Engines:value and growth

Page 63: Lean Startup talk at Business Bootcamp, Brunel

Engine of value

• How much value is your startup delivering?

• Is it enough to be worth paying for?

• Do people perceive that and agree?

Page 64: Lean Startup talk at Business Bootcamp, Brunel

Engine of growth

• How does your startup acquire new customers?

• Paid

• Viral

• Sticky

Page 65: Lean Startup talk at Business Bootcamp, Brunel

Engine of growth

• How does your startup acquire new customers?

• Paid (CAC & LTV)

• Viral (Viral Coefficient)

• Sticky (Retention rate)

Page 66: Lean Startup talk at Business Bootcamp, Brunel

Actionable Metrics

• Actionable metrics are the ones which lead to a change which you know will impact your key drivers.

Page 67: Lean Startup talk at Business Bootcamp, Brunel

“Innovation Accounting”

Page 68: Lean Startup talk at Business Bootcamp, Brunel

Lean reporting

• If you only report usage/revenue, that’s what you’ll be judged on

• Track validated learning instead

Page 69: Lean Startup talk at Business Bootcamp, Brunel

Pivots(hot buzzword alert)

Page 70: Lean Startup talk at Business Bootcamp, Brunel

Experiment failed... what now?

• Why did it fail? Which assumption was wrong?

• Can the assumption be tweaked, or does it need to be thrown out?

• How can we rework the business model now we know that we know this?

Page 71: Lean Startup talk at Business Bootcamp, Brunel

Experiments succeeded, but...

• If it’s not working well enough to build a sustainable business, it’s not working, period.

Page 72: Lean Startup talk at Business Bootcamp, Brunel

• Zoom-in pivot: single feature becomes the whole product

• Zoom-out pivot: the product becomes a feature of a larger product

Page 73: Lean Startup talk at Business Bootcamp, Brunel

• Customer segment pivot: some customers like us, but not the ones initially targeted

• Customer need pivot: the product doesn’t solve a big enough problem for our customers

Page 74: Lean Startup talk at Business Bootcamp, Brunel

• Business architecture pivot: low margin, high volume, vs. high margin, low volume

• Value capture pivot: change the way you monetise

Page 75: Lean Startup talk at Business Bootcamp, Brunel

But... don’t abuse pivots.

Page 76: Lean Startup talk at Business Bootcamp, Brunel

Let’s recap...

Page 77: Lean Startup talk at Business Bootcamp, Brunel

Startups are experiments

Page 78: Lean Startup talk at Business Bootcamp, Brunel

Test critical things as quickly as possible

Page 79: Lean Startup talk at Business Bootcamp, Brunel

Work back from what you want to test...

Metric

Hypothesis Experiment

Text

Page 80: Lean Startup talk at Business Bootcamp, Brunel

Actionable metrics, not vanity metrics

Page 81: Lean Startup talk at Business Bootcamp, Brunel

Report on learning progress

Page 82: Lean Startup talk at Business Bootcamp, Brunel

Pivot when assumptions are wrong

Page 83: Lean Startup talk at Business Bootcamp, Brunel

Lean is just a method Be smart

Get advice

Page 84: Lean Startup talk at Business Bootcamp, Brunel

Where to go from here...

• “The Lean Startup” - Eric Ries

• “Running Lean” - Ash Maurya

• “The entrepreneur’s guide to customer development” - Brant Cooper & Patrick Vlaskovits

• Numerous blogs online...

• Mentors...

• EXPERIENCE!