ash maurya, beyond mvp - scaling lean, bos usa 2016

Hashtag: #leanstack

ASH MAURYA @ashmaurya

ash@leanstack.com

BEYOND MVP: SCALING LEAN

All my ideas started out as awesome ideas.

Not all them became awesome products.

Good ideas are rare and hard to find.

So I was ready for the search process.

But what really bothered me was my cycle time between ideas.

18-24 months between ideas.

Life’s Too Short to Build Something Nobody Wants.

BACKWARDS

Show me traction

How does this solve my problem?

#1 reason why new products fail

We waste needless time, money, and effort building the wrong product.

Solution

Awesome

`

?

?

The Innovator Bias

Your business model, NOT your solution, is THE product.

1st MINDSHIFT

http://RunningLean.co

575+ 5-Star reviews

01 Document your Plan A

MET

A-P

RIN

CIP

LES

02 Identify the riskiest parts of your plan

03 Systematically test your plan

Document your Plan A

Problem

Top 3 problems

Solution

Top 3 features

Unique Value Proposition

Single, clear, compelling message that states why you are different and worth paying attention

Unfair Advantage

Can’t be easily copied or bought

Customer Segments

Target customers

Key Metrics

Key activities you measure

Channels

Path to customers

Cost Structure

Customer Acquisition Costs Distribution Costs Hosting People, etc.

Revenue Streams

Revenue Model Life Time Value Revenue Gross Margin

Lean Canvas is adapted from The Business Model Canvas (http://www.businessmodelgeneration.com) and is licensed under the Creative Commons Attribution-Share Alike 3.0 Un-ported License.

PRODUCT MARKET

Identify the riskiest parts of your plan

Document your Plan A

Systematically test your plan

Identify the riskiest parts of your plan

Document your Plan A

Systematically test your plan

Identify the riskiest parts of your plan

Document your Plan A

Business Model Development Process

CASE-STUDY

WHAT is the riskiest assumption?

ROADSTER

WHY did they use the Lotus Esprit versus another car model?

Scale your idea in stages.2nd MINDSHIFT

Whyanother book?

Identifying what’s riskiest is quite hard.1

Systematically test your plan

Identify the riskiest parts of your plan

Document your Plan A

Reporting on your learning is not enough.2

Validated learning

The Dichotomy of the Progress Story

Validated learning

The Dichotomy of the Progress Story

Whatever demonstrates growth

Drowning in a sea of numbers.3

What you wanted

WTF?

The reality

01 Defining Progress

OU

TLIN

E

02 Prioritizing Waste

03 Achieving Breakthrough

What do both investors and entrepreneurs want?

The hockey-stick curve

TRACTION matters above everything else

Yay!

Traction can be gamed

Traction can be gamed Same data plotted differently

What is TRACTION exactly?

A business model describes how you create, deliver, and capture value.

-Saul Kaplan

The hockey-stick curve

Track Customer behavior

Create Value Capture Value Cost (Deliver Value)

Create Value Capture Value Cost (Deliver Value)>1

VALUE EQUATION

Create Value Capture Value Cost (Deliver Value)>1

VALUE EQUATION

>=2

MONETIZATION EQUATION

Create Value Capture Value Cost (Deliver Value)> >=

TRACTION

The rate at which a business model captures monetizable value from its customers.

Saas

Freemium

Trial

E-commerce

Ad-based

Marketplace

Big Data

User Generated Content

Retail

Media

Community

Membership site

Platform

Open Source

Enterprise

Non-profit

Social

3 business model archetypes

DIRECT MULTI-SIDED MARKETPLACE

$

DIRECT

Unaware visitors Happy customers

Direct models

Unaware visitors Happy customers

Direct models

TRACTION IN A DIRECT MODEL:

The rate at which you create customers.

What customer behaviors lead to traction?

Unaware visitors Happy customers

Direct models

Time spent in store correlated with money spent

MULTI-SIDED

Unaware visitors Happy users

Multi-sided models

Unaware visitors Happy users

Multi-sided models

Derivative asset

Unaware visitors Happy users

Multi-sided models

Happy customers

Derivative asset

Unaware visitors Happy users

Multi-sided models

Happy customers

Derivative asset

Advertisers

TRACTION IN A MULTISIDED MODEL:

Derivative asset to revenue exchange rate

MARKETPLACE

$

Marketplaces

Happy buyer

Happy seller

Marketplaces

Happy buyer

Happy seller

$

Marketplaces

Transaction

Unaware buyers Happy buyer

Unaware sellers Happy seller

$Transaction

Marketplaces

TRACTION IN A MARKETPLACE MODEL:

The rate of transactions.

Waste is any activity that consumes resources but adds no value.

Taiichi Ohno’s chalk circles.

Waste is everywhere.

RIGHT ACTION, RIGHT TIME

There are only a few key actions that matter. Focus on those and ignore the rest.

Theory of Constraints:

Every business is a system of interconnected processes with a single constraint.

Addressing the weakest link is the only thing the matters.

Addressing the weakest link is the only thing the matters.

premature optimization premature optimization

Be wary of local optimization.

You can’t predict the next bottleneck.

Before you can prioritize waste, you have to be able to see the factory floor.

Unaware visitors Happy customers

ACQUISITION

ACTIVATION

RETENTION

REVENUE

REFERRAL

Unaware visitor

Passionate Happy Customer

Pirate Metrics

More Visual

Systems Thinking

Indicates interest through teaser page

Ongoing engagement with sessions and tool

Interview and then start trial

Organic Channels Blog, twitter, workshops

Ask for referrals to like-minded companies

Monthly SaaS paymentafter first 30 days

Exposes the constraint which prioritizes focus

Strategy:

Qualify leads

Focus on a single key metric.NEEDS REVISION

Focus on a single key metric, but always monitor the entire customer factory.

REVISED

One final takeaway…

You can’t brute force a solution…

Starting with a solution is like building a key without a door.

Love the problem, not your solution. 3rd MINDSHIFT

ASH MAURYA @ashmaurya

ash@leanstack.com

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