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Fakultät für Informatik
Technische Universität München
Using the Lean Startup Method for an
Internet Broker in the Recycling Industry Master Thesis
1 2013-12-02 – Stefan Weymann – Using the lean startup method for an internet broker in the recycling industry © sebis
Editor: Stefan Weymann
Supervisor: Prof. Dr. Florian Matthes
Chair: Prof. Dr. Isabell M. Welpe
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Motivation
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the recycling industry 2
Development of Google Search for the term Lean Startup
Source: Google Trends
A new method of how to start a business is coming…
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Research Question
What is the Lean Startup method and how does it contribute/hinder a new
venture?
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the recycling industry 3
How does the lean startup method contribute to :
Positive effects No effect Negative effects
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Agenda
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1. Lean Startup Method
2. Participant Observation
3. Case Study
4. Findings
5. Outlook
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A Startup is a human institution designed to create a new product or service
under conditions of extreme uncertainty. (by Eric Ries 2011)
Lean Startup Method
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The minimal viable product (MVP) is that version of a new product which allows a
team to collect the maximum amount of validated learning about customers with the
least effort. (Ries, 2011)
Lean Startup Method
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the recycling industry 6
Build
Measure Learn
Build-Measure-Learn loop by Eric Ries
2011
Build-Measure-Learn Loop
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Lean Startup Method
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Hypothesis-Driven-Entrepreneurship (by
Eisenmann, Ries and Dillard 2013)
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Participant observation is a research method used for studying groups, programs,
or organizations, formal and informal, ranging in size from several participants to
large-scale organizations. (Kurz, 1984)
Stages of doing participant observation
1. Preparation
2. Choosing the observer role
3. Entering the setting
4. Doing the research
Taking notes
Interviews
Analyse data
Participant observation
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Case Introduction
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the recycling industry 9
Schrott-Deal UG (haftungsbeschränkt)
Date of foundation: 2013-06-06
Purpose:
1. Investigate the use of the lean startup concept
2. Test the business idea
3. Start a new business
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Hesham Ghandour Savas Hobelsberger Stefan Weymann
About Student Computer
Science
Manager at a
recycling retailer
Student TUM-BWL
Responsibilities CTO COO CEO
Case - Team
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Case Lean Startup Approach
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Hypothesis-Driven-Entrepreneurship (by
Eisenmann, Ries and Dillard 2013)
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Case – Set vision
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Consumer
Recycling retailer
Recycling wholesaler
Metal factory
Producer
Where we come in
Producer Wholesaler/Retailer Consumer
Recycling industry Retail industry
Broker/ Affiliates
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Case - MVP
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Do people use the service?
Iteration 1
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• Two orders within the first
week
• Around 100 orders at end of
November
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Iteration 2
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Where to ask for the phone number in the purchase funnel?
0
5
10
15
20
25
30
7.4
.13
7.6
.13
7.8
.13
7.1
0.1
3
7.1
2.1
3
7.1
4.1
3
7.1
6.1
3
7.1
8.1
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7.2
0.1
3
7.2
2.1
3
7.2
4.1
3
7.2
6.1
3
7.2
8.1
3
7.3
0.1
3
8.1
.13
Next Button/Orders
next button
order
Ask for the phone
number in step one
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I3: Which products are requested from customers?
I4: Which prices are accepted by the customers?
I5: Which website design brings better conversions?
I6: How should the order handling tool looks like?
I7: How can marketing expenses be reduced?
I8: Can the business model be scaled to other cities?
Iterations 3 to 8
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Findings
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How does the lean startup method contribute to :
Positive effect Neutral Negative effect
- Answers questions
which are difficult to
find out
- Brings new insights
early
- Fast evaluation of the
business idea
- Legal questions - Most VCs still want to
have a business plan
- Some founding
programs require to
apply before starting
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Start:
15.06.3013
Inaugural presentation: 22.07.2013
Final presentation: 02.12.2013
End:16.12.2013
Outlook
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Questions
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Stefan Weymann
www.schrott-deal.de
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Sources
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Ries, E. (2011). The Lean Startup. New York: Crown Editors.
Eisenmann, T., Ries, E., & Dillard, S. (2013). Hypothesis-Driven
Entrepreneurship : The Lean Startup. Harvard Business Review, 1–26.
Kurz, D. E. (1984). THE USE OF PARTICIPANT OBSERVATION IN
EVALUATION RESEARCH, 6, 93–102.
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Backup
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SEA / Google AdWords
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• Connect with Google Analytics
• Keyword Planner
• Local campaign
• Day limit
• Max CPC Vs. CPC
• Call us: 0800- 589- 4011
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Product development
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7.4.13 7.11.13 7.18.13 7.25.13 8.1.13 8.8.13 8.15.13 8.22.13 8.29.13 9.5.13 9.12.13 9.19.13 9.26.13 10.3.13 10.10.1310.17.1310.24.13
Besu
ch
er
Eindeutige Besucher
1 2 3 4 5 6 Phase
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Phase 1
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Learnings:
• User visit the site and customer use the service
• Customer interact via telephone and not as estimated over the web formula
• Internal processes do not work so far
7.4.13 7.5.13 7.6.13 7.7.13 7.8.13 7.9.13 7.10.13 7.11.13
Eu
ro
Besucher
Besucher
Eindeutige Besucher
Adword-Klicks
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Phase 2
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Eu
ro
Verhältnis Werbekosten zu Umsatz
Kosten kummuliert
Umsatz kummuliert
Learnings:
• Traffic from SEA is expensive need for SEO
• Weekends do not generate any queries stop SEA on the weekends
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SEO
On page vs. Off page Optimization
Google Webmaster Tools
Crawling errors
Search requests
Links to your website
SEO / Google Webmaster Tools
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Phase 3
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Implementation of the new CRM Tool
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Phase 3
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7.4
.13
7.5
.13
7.6
.13
7.7
.13
7.8
.13
7.9
.13
7.1
0.1
3
7.1
1.1
3
7.1
2.1
3
7.1
3.1
3
7.1
4.1
3
7.1
5.1
3
7.1
6.1
3
7.1
7.1
3
7.1
8.1
3
7.1
9.1
3
7.2
0.1
3
7.2
1.1
3
7.2
2.1
3
7.2
3.1
3
7.2
4.1
3
7.2
5.1
3
7.2
6.1
3
7.2
7.1
3
7.2
8.1
3
7.2
9.1
3
7.3
0.1
3
7.3
1.1
3
8.1
.13
Au
fträ
ge
Weiter-Klicks / Aufträge
Weiter-Klicks
Aufträge
Learnings:
• CRM tool needs to be improved
• Customer often leave the form in step 2
• Photo upload function is not used
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Phase 4
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Implementation Phase
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Phase 5
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Eu
ro
SEA
Kosten
Umsatz
SEO
Impression
Klicks
Learnings:
• SEA didn’t run good
• SEO met first goals
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How does SEA really works at Google AdWords?
Phase 5
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Phase 6
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10
.1.1
3
10
.2.1
3
10
.3.1
3
10
.4.1
3
10
.5.1
3
10
.6.1
3
10
.7.1
3
10
.8.1
3
10
.9.1
3
10
.10
.13
10
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10
.12
.13
10
.13
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10
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10
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10
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10
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10
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10
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10
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10
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10
.22
.13
10
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.13
10
.24
.13
10
.25
.13
Eu
ro
Umsatz/Kosten
Kosten
Umsatz
SEA Problem is solved
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Outlook
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E-Commerce
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E-Commerce is the exchange of goods and services with the help of computer and
the internet (by Kumar 2009)
Impression
Clicks
Visits
Conversion