i realize lean startup hack-nov2010

LEAN STARTUP AT THE GATE

17-11-2010

Map And the winner is...

Customer Development

Lean Startup

Map And the winner is...

Customer Development

Lean Startup

Nessuna vita è rovinata tranne quella la cui crescita si è arrestata

Oscar Wilde

Felix qui nihil debetProverbio latino

Source: Wikipedia through CIA’ s World Factbook 2010

And the winner is...

GROWTH

in particular...

Job Growth in U.S. Driven Entirely by Startups, According to Kauffman Foundation Study

The importance of Startups in Job Creation and Job Destructionwww.kauffman.org

GROWTH through STARTUPS

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

uncertaintySource: Eric Ries

www.startuplessonslearned.com

and...

...an organization formed to search for a repeatable and scalable business model.

Source: Steve Blankhttp://steveblank.com

Startup

Scalable

Big Business

>100M$VC*

NotScalable

Small Business

<10M$No VC*

*Venture Capital

Investment Web based Start-ups

Semiconductors, Pharma, etc.

20K!

1M!

-

+

Barriers to entry 100 10

-

Same Risk? Same ROI?

Trends...

Investment Web based Start-ups

Semiconductors, Pharma, etc.

20K!

1M!

-

+

Barriers to entry 100 10

-

Same Risk? Same ROI?

Trends...

...but too many fail!!

...most startups fail from a lack of

customers than from a failure of product

development...

Source: Steve Blank - http://steveblank.com/

Map And the winner is...

Customer Development

Lean Startup

Source: Steve Blank - http://steveblank.com/

FROM...

Concept/ Bus. Plan

Product Dev.

Alpha/Beta Test

Launch/ 1st Ship

PRODUCT DEVELOPMENT

TO...

Company Building

Customer Discovery

Customer Validation

Customer Creation

CUSTOMER DEVELOPMENT

Product/Market FIT

PIVOT

Customer development is a 4 step framework to:

Discover and validate the market for your product,

build product features that solve customer's needs,

test the correct method for acquiring and converting customers,

deploy the right resources to scale the business.

During your customer

development process

DO NOT FORGET:

1) Discover your MARKET TYPE

If you are introducing a new product you can choose:to enter an existing market

to introduce a new product into a new market

to re-segment an existing market

1) Discover your MARKET TYPE

If you are introducing a new product you can choose:to enter an existing market

to introduce a new product into a new market

to re-segment an existing market

requires millions of

marketing dollars

1) Discover your MARKET TYPE

If you are introducing a new product you can choose:to enter an existing market

to introduce a new product into a new market

to re-segment an existing market

  Even if you think that you

are launching

a new product into a new market, most

likely you are re-segm

enting a market

requires millions of

marketing dollars

SEGMENTATION - the practice of breaking down a large market into a smaller groups of users who share specific needs/interests and who reference each others.

Segmentation allows you to:

learn faster about market fit,find an unoccupied segment,become market leader,     focus existing resources.

2) Pay attention to SEGMENTATION

3) Try to find your EARLY ADOPTERS...

They are important because:

they seek out a new technology to solve their real problems,they want you to be successful,they enjoy opportunities that allow them to be heroes.

EARLY ADOPTERS -passionate, early users of new technology or products who understand its value before mainstream market.

Source: E. M. Rogers - “Diffusion of Innovation”

4) Hack your business model

4) Hack your business model

Alexander Osterwalder Business model tool

www.alexosterwalder.com

Map And the winner is...

Customer Development

Lean Startup

Source: Eric Ries - www.startuplessonslearned.com

LEAN STARTUP

Product Development at Lean StartupUnit of Progress: Validated Learning About Customers ($$$)

Problem: unknown

Solution: unknown

Customer Development

Hypotheses,Experiments,Insights

Data,Feedback,

Insights

A s t ar t u p w h i c h comb i n e s i t e r at i v e development methodologies with customer development

Validate your core hypothesis CustomerProblemSolution

By Developing the MVPBy Pivoting   

The process

Validate your core hypothesis CustomerProblemSolution

By Developing the MVPBy Pivoting   

The process

Achieve Product/Market

Fit

Validate your core hypothesis CustomerProblemSolution

By Developing the MVPBy Pivoting   

The process

Produce a development and marketing roadmap for SCALING

Achieve Product/Market

Fit

C.P.S. - Customer Problem Solution

You must understand and describe the problem you are solving from the customers perspective.

Useful questions:who has the problem ?what problem are you trying to solve ?How are you solving the problem ?How is the person dealing with the problem now ?How is your solution better ?Witch benefits does the user get by using your solution ?

C.P.S. - Customer Problem Solution

Write specific assumptions. It is better to be wrong than vague. if you are wrong you iterate. If you are vague you have wasted your time.

A product with the fewest number of features needed to achieve a specific objective and that people are willing to pay for (or they are very disappointed without this product). 

MVP Minimum Viable Product

Pivot means to change an element in your customer-problem-solution hypothesis or business model BUT DON'T ABANDON WHAT YOU'VE LEARNED (AND YOUR CORE ASSETS).

The sooner you realize an HP is wrong THE FASTER YOU CAN UPDATE IT.

PIVOT

Are you on the right way ???

Business plan and market report will show you the way

Are you on the right way ???

Business plan and market report will show you the way

Are you on the right way ???

Metrics will show you the way...

Business plan and market report will show you the way

“Our” favorite set of metrics

METRICS           DESIRED RESPONSE from users

 Acquisition        clicks links      Activation          download/play

 Retention          signup

 Revenue          personalized easy purchased

 Referral           mentions

“Our” favorite set of metrics

METRICS           DESIRED RESPONSE from users

 Acquisition        clicks links      Activation          download/play

 Retention          signup

 Revenue          personalized easy purchased

 Referral           mentions

Dave McClureStartup Metrics

for Pirates

Requires 3 criteria be satisfied:

1. the customer is willing to pay for the product,

2. the cost of acquiring a new customer is less then what they pay for the product,

3. there is sufficient evidence indicating the market is large enough to support the business.

ALL BUSINESS MUST HAVE A PRODUCT MARKET FIT MILESTONE

PRODUCT/MARKET FIT

Finally you have to scale...MVP

ProductMarket

Fit

from sta

rtup t

o large

compan

y(Startups don't last forever)

VC Boost

Focus on:positioningcustomer acquisitionhiringmarketing

Finally you have to scale...MVP

ProductMarket

Fit

from sta

rtup t

o large

compan

y(Startups don't last forever)

VC Boost

Focus on:positioningcustomer acquisitionhiringmarketing

Lean Startup:IS NOT about spending/raising less money, IT IS about spending/raising money more efficiently

IS NOT just for web / tech startups, IT IS for any company working on innovation

IS NOT about replacing vision with feedback/data, IT IS about making sure you have the right vision

Lean Startup encourage to be honest with yourself !!!

Myths about Lean Startup

THAN

KS

www.top-ix.orgwww.irealize.eu

@top_ix@i_realize