lean startup
Post on 18-Jul-2015
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The Lean Startup is a systematic process that helps
entrepreneurs find a business model that works.
It’s designed to prevent wasting time, money
and effort building the wrong product.
Do customers care about the
problem I am solving?
Phase OneUnderstand the Customer Problem
Phase TwoValidate the Customer Solution
Will customers pay for the
solution I am offering?
Phase One - Understand the Customer
Problem
Hypothesis
Design
Experiments
Run
Experiments
Do customers care about the
problem I am solving?
The goal is to understand the
problem the customer wants you
to solve.
Prioritize
Hypotheses
Capture
Learning
Prioritize
Experiments
Phase One - Capture Your Hypotheses
Write down all of your assumptions about your business idea into the Business
Model Canvas and the Value Proposition Canvas.
Phase One - Prioritize Hypotheses
Hypothesis
1
Hypothesis
3
Hypothesis
2
Hypothesis
4
Hypothesis
5
Hypothesis
6
Hypothesis
7
Rank all hypotheses in order of how
critical they are for your business idea
to survive.
At this stage, the problem you are
trying to solve should be most critical.
Phase One - Design Experiments
Interview Research Observe Co-Create
Problem Interview
Interview Customer
Service & Sales
Teams
Speedboat/Sailboat
Online Reviews
Google Trends
Google Keyword
Planner
Census Data
World Bank, IMF, etc.
Third Party Research
Public Filings (10Ks)
etc.
Observe potential
customers in the real
world and gain
insights into how they
behave.
What jobs do they
focus and how do they
get them done?
Work with customers
and integrate them
into the value
innovation process.
Impersonate
Be your customer and
actually use the
products and services
Phase One - Design Experiments
Step 1: Hypothesis
Test Card
We believe______________________________
Step 2: Test
To verify that, we will______________________
Step 3: Metric
And measure____________________________
Step 4: Criteria
We are right if____________________________
We believe parents of young kids
have a problem finding reliable
babysitters
because they do not trust online reviews
To verify that, we will interview 20 parents
at Toys R US
And measure the number of parents
claiming that they do not trust online
reviews
We are right if 8 parents claim that they
don’t trust online reviews
Phase One - Prioritize Experiments
Test 1
Test 3
Test 5
Test 7
Test 2
Test 4
Test 6
Rank experiments in order of how
critical they are for your business idea
to survive and how quickly you can
execute them.
Phase One - Run Experiments
Interview Research Co-Create Impersonate
Get out of the building and experiment.
Observe
Phase One - Capture Learning
Step 1: Hypothesis
Learning Card
We believed that_________________________
Step 2: Observation
We observed____________________________
Step 3: Learnings and Insight
We learned______________________________
Step 4: Decisions and Actions
Therefore, we will_________________________
We believed that parents of young kids
have a problem finding reliable
babysitters
because they do not trust online reviews
We observed that our assumption was
right as 11 parents stated that they didn't
trust online reviews
We learned that our assumption was
right, but what surprised us was that 17
parents said that they usually call friends
with kids to ask for recommendations
Therefore, we will design and test a
solution based on friend
recommendations
Phase One - Update Your Hypotheses
After running your experiments and capturing insights, update your
Business Model Canvas and Value Proposition Canvas.
Phase One - Understand the Customer
Problem
Hypothesis
Design
Experiments
Run
Experiments
Keep running the cycle until you
have have fully understood your
customer problem.
How do I know when to stop?
When you can confidently make
a $1,000 bet that you can predict
your next interviewee’s problem.
Prioritize
Hypotheses
Capture
Learning
Prioritize
Experiments
Phase Two - Validate the Solution
Hypothesis
Design
Experiments
Run
Experiments
Will customers pay for the
solution I am offering?
The goal is to validate the
solution you are offering.
Prioritize
Hypotheses
Capture
Learning
Prioritize
Experiments
Phase Two - Design Solution, Extract Hypotheses
Use the insights from your Business Model Canvas and
Value Proposition Canvas to design a solution.
Then extract hypotheses that you will test.
Phase Two - Prioritize Hypotheses
Hypothesis
1
Hypothesis
3
Hypothesis
2
Hypothesis
4
Hypothesis
5
Hypothesis
6
Hypothesis
7
Rank all hypotheses in order of how
critical they are for your business idea
to survive.
At this stage, usually the Value
Proposition, Customer Segment
and Channel are most critical. But it
really depends on your business.
Phase Two - Design Experiments
Minimum
Viable
Product
Test your value proposition, customer segments, channels, costs, revenues, etc.
Presales Crowdfunding
Landing
Page
Mock Sales Buy a
Feature
Ad & Link
Tracking
Solution
Interview
Split Testing
Phase Two - Design Experiments
Step 1: Hypothesis
Test Card
We believe______________________________
Step 2: Test
To verify that, we will______________________
Step 3: Metric
And measure____________________________
Step 4: Criteria
We are right if____________________________
We believe parents are looking for quicker
ways to find trustworthy babysitters.
To verify that, we will create a landing
page and display our offering
And measure the conversion rate for
1,000 visitors that we will get from
Facebook for $10 in ads
We are right if we can achieve a
conversion rate of 10% (100 signups for
$10 in Facebook ads)
Phase Two - Prioritize Experiments
Test 1
Test 3
Test 5
Test 7
Test 2
Test 4
Test 6
Rank experiments in order of how
critical they are for your business idea
to survive and how quickly you can
execute them.
Phase Two - Run Experiments
Get out of the building and experiment.
Phase One - Capture Learning
Step 1: Hypothesis
Learning Card
We believed that_________________________
Step 2: Observation
We observed____________________________
Step 3: Learnings and Insight
We learned______________________________
Step 4: Decisions and Actions
Therefore, we will_________________________
We believed that parents are looking for
quicker ways to find trustworthy
babysitters
We observed that 148 out of the 1,000
visitors signed up for our service
We learned that our offering converted at
14.8%, and that for $10 in facebook ads,
we were able to gain 148 customers
Therefore, we will use facebook ads as a
viable channel to get customers. Next, we
will test ways to increase conversion
rates.
Update your canvases with your learnings.
You should have concrete customer acquisition costs at this point.
Phase Two - Update Your Hypotheses
Phase Two - Validate the Solution
Hypothesis
Design
Experiments
Run
Experiments
Keep running the cycle until you
have have validated your
solution.
Continue this cycle to understand
and optimize your value
proposition, ad copy, channels,
customer segments and more.
You can also apply this process
to test additional channels,
customer segments and more.
Prioritize
Hypotheses
Capture
Learning
Prioritize
Experiments
Famous Lean Startups
Dropbox created a video demo that went viral on Digg.
70,000 signups in one night.
Famous Lean Startups
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