lean startup masterclass for edge
TRANSCRIPT
LEAN STARTUP MASTERCLASS
ShapenYourEDGE #2, March 2017
PresentWorking on peerex.co
Evernote Certified Consultant
Seeking opportunities in product management
PastEntrepreneur-in-Residence @ JFDI
Chief Operating Officer @ T.Ware
Computer Engineering @ NUS
Huang Chi-Kai(just call me Kai)
[email protected]@huangchikai
linkedin.com/in/huangchikai
Getting to know you...
1. Who is running a startup?
2. Who is thinking about running a startup?
3. Who is thinking about working for a startup?
4. Who is thinking about working for a big company?
5. How do you evaluate if a startup idea is worth pursuing?
Agenda
1. Innovation Patterns & Theories
2. Lean Startup Concept
3. Lean Canvas
4. Lean Startup Roadmap
INNOVATION PATTERNS& THEORIES
BILL GROSS: THE SINGLE BIGGEST REASON WHY STARTUPS SUCCEED
Video Link
WHY NOW?
Technology Insight
Market Insight
Early adopters who live in the future
Technology Insight
Market Insight
LEAN STARTUP CONCEPT
THE LEAN STARTUP MOVEMENT
LEAN =
DON’T WASTE RESOURCES
In Lean Manufacturing, a stack of car doors that never get placed onto an automobile is waste.
In Lean Software, a stack of requirement documents or .PSD files that never make it into a product is waste.
In Lean Startup, a stack of features you’ve built that never get used by a customer is waste.
Link
A startup is a temporary organization used to search for a repeatable and scalable business model
Steve Blank
LEAN STARTUP
Figure out what’s working before running out of resources
LEAN STARTUP =VALIDATED LEARNING
RESOURCE
THINK LIKE A “BUSINESS SCIENTIST”
MINIMISE LOOP TIME
EXPERIMENT
HYPOTHESIS
LEARN LIKE A CHILD
There’s no failure. Only feedback.
WHY LEAN STARTUP?
THE CYNEFIN FRAMEWORK
THE CYNEFIN FRAMEWORK
STARTUPS
PATTERN-BASED MANAGEMENT
CORPORATES
FACT-BASED MANAGEMENT
INNOVATION RISKSM
arke
t Ris
k- S
houl
d it
be d
one?
Technology Risk - Could it be done?LOW HIGH
HIGH
HIGH
Mar
ket R
isk-
Sho
uld
it be
don
e?
Technology Risk - Could it be done?LOW HIGH
HIGH
VISION DRIVEN INNOVATION
Mar
ket R
isk-
Sho
uld
it be
don
e?
Technology Risk - Could it be done?LOW HIGH
HIGH
DISCOVERY DRIVEN INNOVATION
LEAN CANVAS
WHY LEAN CANVAS?
1. Writing and updating biz plans takes too much time
2. Hard to get feedback because nobody wants to read biz plans
3. Provides focus
CUSTOMER SEGMENTS
● Whose problem are we solving for?● Customers pay for the product and users
just use
EARLY ADOPTERS
● A specific subset of a targeted customer segment that can be monopolised quickly
● Develop a persona
PROBLEM
● What’s preventing the customer from fulfilling their needs?
● Be specific to this customer segment● Include context/situation● Ask why a few times
EXISTING ALTERNATIVES
● How do customer solve these problems today?
● Existing behaviours● Incumbents and competitors
UNIQUE VALUE PROPOSITION (UVP)
● Why is it important to solve these problems?
● What’s the end goal benefit for the customers?
● Marketing headline
HIGH-LEVEL CONCEPT
● How your product feels like?● The big vision● Easy for people to talk about
SOLUTION
● Corresponds to problem hypothesis● How is the problem solved in order to
deliver the UVP?
CHANNELS
● Which distribution channel to reach customers?
● Online? Offline? Outbound? Inbound?
Poor distribution, not product, is the number one cause of failure
Peter Thiel
DISTRIBUTION CONTINUUM
DISTRIBUTION CONTINUUM
CLV: $3 $300 $3,000 $30,000 $30 million
$1,000
FINDING THE RIGHT CHANNEL
19 channels
The channel that we know might not be the right the one
Channel saturation
50% resource on product dev. 50% resource on channel dev.
REVENUE STREAMS
● Start with one simple pricing model● Explain customer lifetime value (CLV)
COST STRUCTURE
● Focus on customer acquisition cost (CAC)● Fixed costs and other variable costs
KEY METRICS
● Growth rate○ 5 to 10% week on week growth
● CLV/CAC ratio○ 2 to 3
● Payback period○ 6 to 9 months
UNIT ECONOMICS
Management accounting for corporates
Unit economics for startups
UNFAIR ADVANTAGE
● Domain expertise?● Product defensibility?
○ Core tech, network effects, stickiness…● Why incumbents can’t do the same?● Branding?
DEVELOPINGUNFAIR ADVANTAGE
● Book: Zero to One● Video:
What type of company makes a VC excited?
LEAN STARTUP ROADMAP OVERVIEW
3 STAGES OF A STARTUP
STAGE 1
PROBLEM/SOLUTION
FIT
STAGE 2
PRODUCT/MARKET
FIT
STAGE 3
SCALE
STAGE 1
Do I have a problem worth solving?
STAGE 1
PROBLEM/SOLUTION
FIT
STAGE 2
PRODUCT/MARKET
FIT
STAGE 3
SCALE
STAGE 2
Have I built something people want?
STAGE 1
PROBLEM/SOLUTION
FIT
STAGE 2
PRODUCT/MARKET
FIT
STAGE 3
SCALE
STAGE 3
How do I accelerate growth?
STAGE 1
PROBLEM/SOLUTION
FIT
STAGE 2
PRODUCT/MARKET
FIT
STAGE 3
SCALE
3 STAGES OF A STARTUP
STAGE 1
PROBLEM/SOLUTION
FIT
STAGE 2
PRODUCT/MARKET
FIT
STAGE 3
SCALE
FOCUSVALIDATED LEARNING
&PIVOTS
GROWTH&
OPTIMIZATIONS
3 STAGES OF A STARTUP
STAGE 1
PROBLEM/SOLUTION
FIT
STAGE 2
PRODUCT/MARKET
FIT
STAGE 3
SCALE
SEEDFUNDIN
G
SERIES A
FUNDING
ACHIEVING PRODUCT/MARKET FIT
STAGE 1
PROBLEM/SOLUTION FIT
STAGE 2
PRODUCT/MARKET FIT
UNDERSTAND
PROBLEMDEFINE
SOLUTIONVALIDATE
QUALITATIVELY
VERIFYQUANTITATIV
ELY
UNDERSTAND
PROBLEMDEFINE
SOLUTIONVALIDATE
QUALITATIVELY
VERIFYQUANTITATIV
ELY
Lean canvas sections to be validated
Problem - Do we have a problem worth solving?
Customer Segment - Who has the pain?
Existing Alternatives - How is the problem being solved now?
Experiments
Problem interviews
UNDERSTAND
PROBLEMDEFINE
SOLUTIONVALIDATE
QUALITATIVELY
VERIFYQUANTITATIV
ELY
Lean canvas sections to be validated
Solution - What’s the smallest possible solution?
Early Adopter - Who really want your product now?
Revenue Stream - How do customer react to pricing?
Experiments
Solution interviews
UNDERSTAND
PROBLEMDEFINE
SOLUTIONVALIDATE
QUALITATIVELY
VERIFYQUANTITATIV
ELY
Lean canvas sections to be validated
UVP - Is this what customer want?
Channel - What are the outbound channels?
Revenue Stream - Do customers pay?
Experiments
Minimum viable product (MVP) testing
UNDERSTAND
PROBLEMDEFINE
SOLUTIONVALIDATE
QUALITATIVELY
VERIFYQUANTITATIV
ELY
Lean canvas sections to be validated
Key Metrics - Can we meet our targets?
Channels - What are the inbound channels?
Cost Structure - Is our business model sustainable?
Experiments
Full product launch
Split testing (UI/UX, features, pricing…)
Channel testing
UNDERSTAND
PROBLEMDEFINE
SOLUTIONVALIDATE
QUALITATIVELY
VERIFYQUANTITATIV
ELY
FOCUSVALIDATED LEARNING
&PIVOTS
GROWTH&
OPTIMIZATIONS
PROCESSESMANUAL AUTOMATED
BUILD-MEASURE-LEARN LOOP TIMEDAYS MONTHS
UNDERSTAND PROBLEM
UNDERSTAND
PROBLEMDEFINE
SOLUTIONVALIDATE
QUALITATIVELY
VERIFYQUANTITATIV
ELY
Lean canvas sections to be validated
Problem - Do we have a problem worth solving?
Customer Segment - Who has the pain?
Existing Alternatives - How is the problem being solved now?
Experiments
Problem interviews
PROBLEM INTERVIEW STRUCTURE
1. ProfileDemographics and psychographics for developing persona of early adopter
2. ValidateLean Canvas: Problem, Existing Alternatives, Customer Segment
3. AskTest commitment level (follow up, referrals)
GROUND RULES & TIPS
Video Link
DEFINE SOLUTION
UNDERSTAND
PROBLEMDEFINE
SOLUTIONVALIDATE
QUALITATIVELY
VERIFYQUANTITATIV
ELY
Lean canvas sections to be validated
Solution - What’s the smallest possible solution?
Early Adopter - Who really want your product now?
Revenue Stream - How do customer react to pricing?
Experiments
Solution interviews
SOLUTION INTERVIEW STRUCTURE
1. ProfileSkip this for old prospects from earlier problem interview.
2. QualifyConfirm if problem is true for the prospect. If untrue, switch to problem interview.
3. DemoShow how your solution can deliver the UVP by solving the prospects problem. Ask for feedback at the end of the demo.
4. Test PricingState pricing and observe reaction.
5. AskTest commitment (follow up, pre-order, letter of intent, referrals)
DEMO TYPES● Verbal● Hand drawn● Screenshots● Video● Clickable mockups
DEMO TOOLS● Printable/Sketchable Templates● POP - Quick prototyping for mobile apps● Keynotopia - Templates for Keynote/Power
point● FluidUI - Clickable mockups
VALIDATE QUALITATIVELY
UNDERSTAND
PROBLEMDEFINE
SOLUTIONVALIDATE
QUALITATIVELY
VERIFYQUANTITATIV
ELY
Lean canvas sections to be validated
UVP - Is this what customer want?
Channel - What are the outbound channels?
Revenue Stream - Do customers pay?
Experiments
Minimum viable product (MVP) testing
START NOW. NO FUNDING NEEDED.
Video Link
MVPThe smallest thing you can build that lets you quickly make it around the build/measure/learn loop
