how to identify a lean startup
TRANSCRIPT
HOW TO IDENTIFY A LEAN STARTUP
ASH MAURYA@ashmaurya
http://www.ashmaurya.com
The sad statistics of Plan A
new product ideas to get one successful product.58
startups fail.9/10
change their original plansdrastically.66%
Not better Plan A.But a path to a plan that works.
Lean Startup is a rigorous process for iterating from Plan A to a plan that works.
Agenda
1. What is a Lean Startup?2. What does a Lean Startup look like?3. How you can use Lean to define and measure progress
Agenda
1. What is a Lean Startup?2. What does a Lean Startup look like?3. How you can use Lean to define and measure progress
Don’t let me be misunderstood
We’re Lean because:
- we got a great deal on our furniture!
- we’ve implemented continuous deployment!- we surveyed all our customers and found that…
Don’t let me be misunderstood
We’re Lean because:
- we got a great deal on our furniture!
- we’ve implemented continuous deployment!- we surveyed all our customers and found that…
Don’t let me be misunderstood
We’re Lean because:
- we got a great deal on our furniture!
- we’ve implemented continuous deployment!- we surveyed all our customers and found that…
Don’t let me be misunderstood
We’re Lean because:
- we got a great deal on our furniture!
- we’ve implemented continuous deployment!- we surveyed all our customers and found that…
So, what then is a Lean Startup?
A Lean Startup is about speed
Startups that succeed are those that manage to iterate enough times before running out of resources. - Eric Ries
A Lean Startup is about validated learning
Get out of the building. - Steve Blank
A Lean Startup is about focus
Right Action, Right Time - Bijoy Goswami
Agenda
1. What is a Lean Startup?2. What does a Lean Startup look like?3. How you can use Lean to define and measure progress
Create a business model versus a business plan
Business Model vs Business Plan
Create a business model versus a business plan
Business Model vs Business Plan
A document investors make you write that they don’t read
Create a business model versus a business plan
Business Model vs Business Plan
A single diagram of your business
Start with worksheets
1. WHAT: ProblemWhat is the problem you are trying to solve?
2. WHO: CustomerWho has the problem?
3. HOW: Product/MarketHow do you solve this problem?How big is this market?How are you going to reach this customer?How do you drive demand?How will you make money?
Problem
Top 3 problems
Solution
Top 3 features
Unique Value Proposition
Single, clear, compelling message that states why you are different and worth buying
Unique Value Proposition
Single, clear, compelling message that states why you are different and worth buying
Unfair Advantage
Can’t be easily copied or bought
Customer Segments
Target customers
Problem
Top 3 problems
Key Activity
Activity that drives retention/revenue
Unique Value Proposition
Single, clear, compelling message that states why you are different and worth buying
Unique Value Proposition
Single, clear, compelling message that states why you are different and worth buying Channels
Path to customers
Customer Segments
Target customers
Cost Structure
Customer Acquisition CostsDistribution CostsHostingPeople, etc.
Cost Structure
Customer Acquisition CostsDistribution CostsHostingPeople, etc.
Cost Structure
Customer Acquisition CostsDistribution CostsHostingPeople, etc.
Revenue Streams
Revenue ModelLife Time ValueRevenue Gross Margin
Revenue Streams
Revenue ModelLife Time ValueRevenue Gross Margin
Revenue Streams
Revenue ModelLife Time ValueRevenue Gross Margin
Then get it down tighter
3 stages of a startup
Problem/Solution Fit
Product/Market Fit
Scale
Validate Problem/Solution Fit
Problem/Solution Fit
Product/Market Fit
Scale
Do I have a problem worth solving?
P
Top 3 problems
S
Top 3 features
UVP
Single, clear, compelling message that states why you are different and worth buying
UVP
Single, clear, compelling message that states why you are different and worth buying
UA
Can’t be easily copied or bought
CS
Target customers
P
Top 3 problems
KA
Activity that drives retention/revenue
UVP
Single, clear, compelling message that states why you are different and worth buying
UVP
Single, clear, compelling message that states why you are different and worth buying
CH
Path to customers
CS
Target customers
C$
Customer Acquisition CostsDistribution CostsHostingPeople, etc.
C$
Customer Acquisition CostsDistribution CostsHostingPeople, etc.
C$
Customer Acquisition CostsDistribution CostsHostingPeople, etc.
R$
Revenue ModelLife Time ValueRevenue Gross Margin
R$
Revenue ModelLife Time ValueRevenue Gross Margin
R$
Revenue ModelLife Time ValueRevenue Gross Margin
Problem/Solution Fit - Lean Canvas
Achieve Product/Market Fit
Problem/Solution Fit
Product/Market Fit
Scale
Have I built something people want?
Product development gets in the way of learning
Requirements ReleaseDevelopment QA
Some learning
Very little learning
Most learning happens here
Involve customers throughout product dev
Requirements Release
Customer Discovery
Customer Validation
ContinuousDeployment
P
Top 3 problems
S
Top 3 features
UVP
Single, clear, compelling message that states why you are different and worth buying
UVP
Single, clear, compelling message that states why you are different and worth buying
UA
Can’t be easily copied or bought
CS
Target customers
P
Top 3 problems
KA
Activity that drives retention/revenue
UVP
Single, clear, compelling message that states why you are different and worth buying
UVP
Single, clear, compelling message that states why you are different and worth buying
CH
Path to customers
CS
Target customers
C$
Customer Acquisition CostsDistribution CostsHostingPeople, etc.
C$
Customer Acquisition CostsDistribution CostsHostingPeople, etc.
C$
Customer Acquisition CostsDistribution CostsHostingPeople, etc.
R$
Revenue ModelLife Time ValueRevenue Gross Margin
R$
Revenue ModelLife Time ValueRevenue Gross Margin
R$
Revenue ModelLife Time ValueRevenue Gross Margin
Product/Market Fit - Lean Canvas
Optimize for Scale
Problem/Solution Fit
Product/Market Fit
Scale
How do I accelerate growth?
P
Top 3 problems
S
Top 3 features
UVP
Single, clear, compelling message that states why you are different and worth buying
UVP
Single, clear, compelling message that states why you are different and worth buying
UA
Can’t be easily copied or bought
CS
Target customers
P
Top 3 problems
KA
Activity that drives retention/revenue
UVP
Single, clear, compelling message that states why you are different and worth buying
UVP
Single, clear, compelling message that states why you are different and worth buying
CH
Path to customers
CS
Target customers
C$
Customer Acquisition CostsDistribution CostsHostingPeople, etc.
C$
Customer Acquisition CostsDistribution CostsHostingPeople, etc.
C$
Customer Acquisition CostsDistribution CostsHostingPeople, etc.
R$
Revenue ModelLife Time ValueRevenue Gross Margin
R$
Revenue ModelLife Time ValueRevenue Gross Margin
R$
Revenue ModelLife Time ValueRevenue Gross Margin
Scale - Lean Canvas
Before Product/Market Fit
Problem/Solution Fit
Product/Market Fit
Scale
Validated Learning
Pivots
After Product/Market Fit
Problem/Solution Fit
Product/Market Fit
Scale
Growth
Optimizations
Validated Learning
Pivots
Agenda
1. What is a Lean Startup?2. What does a Lean Startup look like?3. How you can use Lean to define and measure progress
P
1. Problem #12. Problem #23. Problem #3
S
1. Feature #12. Feature #23. Feature #3
UVPUVP UA CS
1. Founders2. Marketers
P
1. Problem #12. Problem #23. Problem #3
KA
UVPUVP
CH
CS
1. Founders2. Marketers
C$C$C$ R$R$R$
Start with what matters
P
1. Problem #12. Problem #23. Problem #3
S
1. Feature #12. Feature #23. Feature #3
UVPUVP UA
Something that cannot be copied or bought.
CS
1. Founders2. Marketers
P
1. Problem #12. Problem #23. Problem #3
KA
UVPUVP
CH
1. Personal Authority2. Website
CS
1. Founders2. Marketers
C$C$C$ R$
Subscription Model: $49/mo
R$
Subscription Model: $49/mo
R$
Subscription Model: $49/mo
But also tackle the riskiest parts early
Formulate falsifiable hypotheses
Leap of Faith: Being known as an “expert” will drive early adopters
Hypothesis: Blog post will drive >100 early sign-ups
Build accessible dashboards
Make the results auditable
Run board meetings in a lessons learned format
Q2 2010
We thought (Hypotheses):
Our Customers told us (Insights):
Next Steps (Future Experiments):0
12.5
25
37.5
50
Jan Feb Mar Apr May June July
$20K
$15K
$10K
$5K
$0
• Personal Authority would be a viable channel to early adopters• Customers would vote the problem as “must-have”• Customers would pay $49/mo
• Most early adopters did come through blog and twitter• Customers voted #3 problem as “must-have”. Others as nice-to-have• $49/mo works for customers with early traction
• Test MVP based on “must-have” problem• Test a Freemium model
Lean Startup is a rigorous process for iterating from Plan A to a plan that works.
Thanks!Ash Mauryatwitter: ashmauryablog: http://www.ashmaurya.com
Running Lean - the bookHow to pivot your web application to product/market fit
http://www.RunningLeanHQ.com