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The Lean Entrepreneur

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The Lean Entrepreneur

HOW VISIONARIES CREATE PRODUCTS, INNOVATE with NEW VENTURES, and

DISRUPT MARKETS

BRANT COOPER and PATRICK VLASKOVITS

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Cover image: @FAKEGRIMLOCK

Cover design: C. Wallace

Copyright © 2013 by Brant Cooper and Patrick Vlaskovits. All rights reserved.

Published by John Wiley & Sons, Inc., Hoboken, New Jersey.

Published simultaneously in Canada.

No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means,

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Library of Congress Cataloging-in-Publication Data:

Cooper, Brant.

Th e lean entrepreneur : how visionaries create products, innovate with new ventures, and disrupt markets / Brant

Cooper, Patrick Vlaskovits. — 1

p. cm.

Includes index.

ISBN 978-1-118-29534-2 (cloth); ISBN 978-1-118-33408-9 (ebk); ISBN 978-1-118-33523-9 (ebk);

ISBN 978-1-118-33186-6 (ebk)

1. Entrepreneurship. 2. Success in business. I. Vlaskovits, Patrick. II. Title.

HB615.C6495 2013

658.4'21—dc23

2012035450

Printed in the United States of America

10 9 8 7 6 5 4 3 2 1

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For Riva and Eliza

—BC

For Kati, Shane, and the twinkle in my eye

—PV

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vii

Contents

Special Thanks ix Foreword xvIntroduction xvii

Chapter 1: Startup Revolution 1

The Myth of the Visionary (Take 1) 1

The Myth of the Visionary (Take 2) 4

Case Study: Disrupting Venture Capital 6

Which Is to Say, Disruption Hurts 12

Case Study: Customized Value Creation 21

And Cue the Lean Startup 23

Lean Startup, Please Meet the Lean Entrepreneur 25

Chapter 2: Vision, Values, and Culture 31

Vision and Values 31

Case Study: Is the Problem Really Solvable? 36

Lean into It: The Lean Startup Culture 38

Case Study: Experience-Driven Jumpstart 41

Case Study: KISSmetrics 45

Case Study: Root-Cause Analysis on Sales 50

Over the Horizon: A Framework 56

Case Study: Lean Startup Horizons 57

Chapter 3: All the Fish in the Sea 61

Case Study: The Ethology of the Fish 64

Know Your Audience: Why Segmentation Matters 66

Market Segment 70

Personas: Create a Fake Customer 71

Case Study: Salim’s Fish Inventory 72

Choosing a Market Segment 74

Case Study: Carla’s Dream Jobs 75

Case Study: It’s in the Name 78

Chapter 4: Wading in the Value Stream 83

Articulating the Value Stream 83

Case Study: Seeing from Customer’s View 85

Value-Stream Discovery 91

Case Study: AppFog’s High Hurdle 102

Chapter 5: Diving In 109

Listen to Your Customers—or Not 110

Customer Interaction 113

Case Study: Don’t Just Get Out of the Building, Get Out of the Country 115

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viii CONTENTS

Case Study: What’s the Worst That Can Happen? 121

Case Study: A Nonprofi t Lean Startup 123

Chapter 6: Viability Experiments 131

The Infamous Landing Page 132

Concierge Test 134

Case Study: Curating User Experience 135

Wizard of Oz Test 139

Case Study: Idea to Wizard of Oz in under 90 Days 140

Crowd-Funding Test 141

Case Study: Two-Sided Market Lean Startup 143

Prototyping 146

Case Study: MVP: Motor Vehicle Prototype 148

Chapter 7: Data’s Double-Edged Sword 151

Case Study: Disrupting the Undisruptable 155

New Products 158

Existing Products 163

Case Study: Instrumenting Growth 165

Chapter 8: The Valley of Death 169

Minimum Viable Product 171

Case Study: The Minimum Viable Audience 176

Case Study: Social Impact Lean Startup 180

Case Study: But My Marinara Is to Die For! 183

Case Study: O2, Telecom at the Speed of the Internet 189

Chapter 9: Real Visionaries Have Funnel Vision 193

Innovate the Funnel 195

Growth Waves 209

Case Study: Ten Lean Startup Buzzword Questions with Rob Fan 215

Chapter 10: The Final Word 225

Case Study: Drinking Kool-Aid and Eating Dog Food 229

Notes 237Acknowledgments 241About the Authors 244Index 249

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ix

Special Thanks

Without our early adopters, who believed

enough in Th e Lean Entrepreneur to pre-

order a book when it was merely a landing

page with a silly video, we might not have

survived the process of writing and publish-

ing this book.

Th eir early feedback on content and exer-

cises forced us to simplify, focus, and home

in on how to move the needle for them.

Th ank you,

Brant & Patrick

The Lean Entrepreneur Early Adopters*:@$H0K

@WojKwasi

Aalap Parikh

Abraham Williams

Adalsteinn Ottarsson

Adam Gibson

Adam Jong

Advanced VA

Akili King

Al Bsharah

Al Shaw

Alan David Rojas Yacolca

Alan Lattimore

Alan Turner

Alberto Jr

Alex Wolfe

Alexander Bastien

Alexander Ginsberg

Alexander Konowka

Alexander Osterwalder

Alexandre Marcondes

Alexandre Zamarion Cepeda

Alfred Lo

Alfredo Osorio

Alison Anthoine

Alison Gibbins

Alline Watkins

Alon Goren

Amiel Zwier

Andersen Andre

Andrea Amedeo

Andreas Cem Vogt

Andreas Klinger

Andres Arias

Andres Buritica

Andres Riggioni

Andrew Hemsley

Andrew Korf

Andrew Mohebbi

Andrew Payne

Andrew White

Andrey Gridnev

*to view this list of names online, please visit http://leanentrepreneur.co/earlyadopters.

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x SPECIAL THANKS

Anita Leff el

Antonio Lucena de Faria

Arden Grady

Armando Maldonado

Arthur Dodge

Arturo Garrido

Basil Elway

Beat Goetschi

Becky Smith

Beihua Yu

Benjamin Biddel

Benjamin Patock

Bergson Fogaca de Oliveira

Bernard Lebelle

Bernardo Mazzini

Bill Carver

Bill Kenney

Brendan Baker

Brenton O’Brien

Brittany Lynch

Brunno Cruz

Bryan Hall

C Crouch

Camilo Zamora

Carol Gunby

Casey Armstrong

Cassiano Porreca

Catherine Colgan

Chan Keung

Chandan Kanodia

Chantal Botana

Chin Eugene

Chonchayong Trairatkeyoon

Chris Elam

Chris Gallo

Chris Healy

Christian Fahlke

Christian Kramer

Christopher Conrey

Claudio Perrone

Clayton Levering

Colin Tuggle

Craig Aron

Cristian Valbuena

Cv Harquail

D Elley

Dale Larson

Damien Saunders

Damon D’Amore

Dan Kaplan

Dan Mattrazzo

Daniel Donado

Daniel Fulep

Daniel Haran

Daniel Horowitz

Daniel James Scott

Daniel Politzer

Danny Beckett Jr.

Danny Currie

Darren Fehrmann

Dave Blackman

David Andujo

David Drake

David Fishman

David Hooton

David Stevens

Davorin Gabrovec

Daylin Breen

Deane Sloan

Dennis Cabarroguis

Desiderio Gutierrez

Dmitri Leonov

Donna Klym

Dr. Ernie

Drew Sanocki

Eduardo Burgel

Elio Maggini

Emily Cotter

Emmanuel Devries

Eneko Bilbao

Eric Fader

Eric Galen

Eric Pantera

Erich Buri

Erick Herring

Erik Saltwell

Erika Callahan

Erin Mcclarty

Esteban Quijano

Farez Rahman

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Special Thanks xi

Ferenc Fekete

Fernando Labastida

Fernando Saenz-Marrero

Ferran Giones

Francesc Mutge

Francesco Fullone

Frank Dale

Fuat Koro

Gabriele Lana

Garth Humbert

Gary Chiu

Gary Hellen

Gary Marcos

Gary Percy

Gavin Heer

Geert Bollen

George Komoto

Gerard Charlot

Gibran Abarca

Gideon Walker

Gijsbert Koren

Gil Doukhan

Gilbert Bagaoisan

Giles Farrow

Giorgio Casoni

Glenn Marcus

Gonzalo Santos

Graham Kehily

Guilhem Bertholet

Hampus Jakobsson

Hao Chen

Helge Hannisdal

Hendrik Bohn

Hiroshi Menjo

Howard Iii

Ira Herman

Iren Elisabeth Ovstebo

Ivan Rapin-Smith

Iyas Alqasem

Jacob Taylor

Jake Waxenberg

Jakub Musialek

James Gagel

James Katzenberger

James Levine

James Manias

James McGilvray

James Sutherland

Jan Belke

Jane Garrity

Jared Hardy

Jason Bowser

Jason Fitts

Jason Fraser

Jason HJH

Jason Yip

Jay Beecham

Jay Cranman

Jay Grieves

Jeanne Pi

Jeff Chen

Jeff rey Howell

Jeff rey Mohr

Jeff rey Poole

Jeff rey Tingle

Jennie Enholm

Jeremy George

Jesse Nowlin

Jim Chesebro

JM Bonthous

Joanna Piotrowska

Joe Bailey

Joe Gerber

Joe Waltman

Joel Abraham

Joel Gascoigne

Joel Jenkins

John Asalone

John Beadle

John Carter

John Halpern

John Holcroft

John Hornbaker

John Morrow

John T. Chapman

John Wark

John Wolpert

Jon Gold

Jon Lawrence

Jonatan Alava

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xii SPECIAL THANKS

Jonathan Buccella

Jonathan Drillings

Jonathan Gray

Jonathan Tarud

Jonathan York

Jonathon Schuster

Jonny Lennon

Jordana Adler

Joseph Draschil

Joseph Morgan

Joseph Vandervest

Joshua Kerievsky

Joshua Lewis

Joshua Steimle

jozi9

Juergen Anke

Justin Coetsee

Justin Homkow

Justine Lam

Kahlil Corazo

Kangtao Chuang

Karin Lehner

Karl Shaikh

Kathleen Meairs

Keenahn Jung

Keiron Mccammon

Kelvin Th am

Ken Hejmanowski

Kent Mcdonald

Kim Silva

Kirk Lashley

Kutlu Kazanci

Lars Kristian Aasbrenn

Lars Teigen

Lawrence Schoonover, DDS

Lee Heathfi eld

Lee Munroe

Leslie Hunter

Lindsey Nagy

Lord Fernandez

Louis Galipeau

Lowell Lindstrom

Lowell Winer

Luigi Matrone

Luigi Montanez

Luis Luengo

Lukas Fittl

Luke Scoates

Lynn Pearce

Lynn Rasmussen

M Keeff e

Maciej Czarnik

Makoto Miyagawa

Marc Havener

Marcelo Pimenta

Mark Horoszowski

Mark Morris

Marko Vasiljevic

Martin Alcala Rubi

Martin Giorgetti

Martin Hrdlicka

Matias Waes

Matthew A

Matthew Bellows

Matthew Dally

Matthew Ownby

Mauricio Montilla

Melissa Foster

Melissa Navarro

Meng Wong

Michael Grassotti

Michael Hawkins

Michael Lira

Michael Maretzke

Michael Petronaci

Michael Porcelli

Michael Th ompson

Michael Yevdokimov

Michel Gelobter

Michele Battelli

Michelle Hoang

Mikhail Nikolaev

Mila Vukojevic

Mitchell Villani

Morgan Linton

Mr O’Flynn

Mrs Oliver

Nadav Wilf

Nicholas Wichert

Nick Tippmann

Nicolas Tognoni

Nikhil Th omas

Nikolaos Souris

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Special Thanks xiii

Nina Alter

Nir Eyal

Norbert Schwagmann

Oana Calugar

Olaf Lewitz

Olaf Myklebust

Oleg Mysyk

Olga Pavlovsky

Olin Hyde

Olivier Verbeke

Oriol Pascual

Oskari Kettunen

Paolo Lorenzoni

Parul Singh

Patrick Buechner

Patrick Smith

Paul Connaghan

Paul Gomez

Paul Merino

Paul Reichman

Pedro Carmo Oliveira

Pedro Rocha

Per Sahlin

Peter Cooper

Peter Hargittay

Peter Hong

Peter Troast

Piotr Durlej

Prudencio Herrero

R Bowater

Rachel Willmer

Rahul Gupta

Rak Dheva-Aksorn

Rammohan Reddy

Randall Minchew

Ray Hallare

Reginald Niles

Regis Rehel

Reid Mcgregor

Rene-Martin Tudyka

Ricardo Dorado

Richard Ackermann

Richard Kroon

Richard Prest

Rick Perreault

Ricky Juarez

Rindranirina Ramamonjison

Rob Linton

Robert Bowman

Robert Fan

Robert Fenton

Roberto Magnifi co

Rodney Rumford

Rodolfo Angel Lomascolo Szittyay

Rodrigo Ludwig

Roger Weber

Ross O’Lochlainn

Royce Hamano

Rukesh Patel

Ryan Fujiu

Ryan Poissant

Salim Virani

Samuel Goldberg

Samuel Parker

Sash Catanzarite

Scott Austin

Scott Gillespie

Scott Kurland

Scott Roehrick

Scott Steele

Sean Ammirati

Sean Craft s

Sean Taylor

Sean Tierney

Sebastien Arbogast

Sergio Marrero

Shawn Arnwine

Shawn Purcell

Simone Brunozzi

Son Th anh Le

Stephen Rhyne

Stephen Wood

Steven Craig

Steven Mcilvenna

Sunshine Makarow

Sylvain Montreuil

Takashi Tsutsumi

Tal Rachleff

Tanya Ross-Lane

Th eodore Barnett

Th eodore Shivdasani

Th omas Lin

Th omas Neiger

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