lean startup victoria 01 introduction to lean startup

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The slides from the introduction to Lean Business Methodology from the Victoria, BC Lean Startup Meetup.meetup.com/Lean-Startup-Victoria

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  • 1.Lean Startup Victoria

2. This meetup is not about how to write a business plan. The end result is not a PowerPoint slide deck for a VC presentation. 3. Instead, we want to get our hands dirty talking to customers, partners, and competitors to leap into the chaos and uncertainly of how a startup actually works. 4. Well learn how to useabusiness modelto brainstorm each part of a company,customer developmentto get out of the building and see whether anyone would want and use your product, andagile developmentto help us rapidly iterate our products into something customers will use and buy. 5. The goal is to have avalidatedbusiness model that can bootstrap profitably or raise capital 6. Engineering 245 The Lean LaunchPad Session 1: Overview/Business Models/Customer Development Professors Steve Blank, Ann Miura-Ko, Jon Feiber http://e245.stanford.edu/ 7. Reading

  • Business Model Generation
  • Four Steps to the Epiphany
  • Founders at Work

8. How to Build A Startup Idea Size Opportunity Business Model Customer Development 9. How to Build A Startup Idea Sizeof the Opportunity Business Model(s) CustomerDiscovery CustomerValidation Theory Practice 10. How to Build A Startup Idea Sizeof the Opportunity Business Model(s) CustomerDiscovery CustomerValidation 11. An Idea is _Not_ aCompany 12. Size of Opportunity 13. Small BusinessStartups Small Business Startup

  • -Business Model found
  • - Profitable business
  • Existing team
  • < $1M in revenue

14. Small BusinessStartups

  • -Business Model found
  • - Profitable business
  • Existing team
  • < $10M in revenue
  • 5.7 millionsmall businessesin the U.S. $100M/year
    • Total Available Market > $500m
    • Company can grow to $100m/year
    • Business model found
    • Focused on execution and process

    16. ScalableStartup Scalable Startup Large Company >$100M/year

    • Total Available Market > $500m
    • Company can grow to $100m/year
    • Business model found
    • Focused on execution and process
    • Typically requires risk capital
    • In contrast ascalable startupis designed to grow big
    • Typically needs risk capital
    • What Silicon Valley means when they say Startup

    17. Very DifferentStartup Goals Small Business Startup

    • - Business Model found
    • - Profitable business
    • Existing team
    • < $10M

    Scalable Startup Large Company

    • Total Available Market > $500m
    • Company can grow to $100m/year
    • Business model found
    • Focused on execution and process
    • Typically requires risk capital

    18. Venture FirmsInvest inScalable Startups Small Business Startup Scalable Startup Large Company 19. Market/Opportunity Analysis

    • How Big is It?:Market/Opportunity Analysis
      • Identify a Customer and Market Need
      • Size the Market
      • Competitors
      • Growth Potential

    20. How Big is the Pie? Total Available Market Total Available Market

    • How many peoplewouldwant/need the product?
    • How largeis the market be(in $ s) if they all bought?
    • How many unitswould that be?
    • How Do I Find Out?
    • Industry Analysts Gartner, Forrester
    • Wall Street Analysts Goldman, Morgan

    21. How Big is My Slice? Served Available Market

    • How many peopleneed/can useproduct?
    • How many peoplehave the moneytobuy the product
    • How largewould the market be (in $ s)if they all bought?
    • How manyunits would that be?
    • How Do I Find Out?
    • Talk to potential customers

    ServedAvailableMarket Total Available Market 22. How Much Can I Eat? Target Market

    • Who am I going to sell toin year 1, 2 & 3?
    • How many customersis that?
    • How large is the marketbe(in $ s) if they all bought?
    • How many unitswould that be?
    • How Do I Find Out?
    • Talk to potential customers
    • Identify and talk to channel partners
    • Identify and talk to competitors

    Total Available Market TargetMarket Served Available Market 23. Segmentation Identification of groups most likely to buy TargetMarket

    • Geographic
    • Demographic
    • Psychographic variables
    • Behavioral variables
    • Channel
    • etc

    Total Available Market Served Available Market 24. Market Size: Summary

    • Market Size Questions:
      • How big can this market be?
      • How much of it can we get?
      • Market growth rate
      • Market structure (Mature or in flux?)
    • Most important : Talk to Customers and Sales Channel
    • Next important: Market size by competitive approximation
      • Wall Street analyst reports are great
    • And :Market research firmsLike Forester, Gartner

    25. Business Model 26. What Is a BusinessModel ?

    • Diagramof flows between company and customers
    • Scorecardof hypotheses testing
    • Rapid changewith each iteration and pivot
    • Founder- driven

    * Alex Osterwalder 27. 9 building blocksof a business model: 28. CUSTOMER SEGMENTS which customers and users are you serving?which jobs do they really want to get done? 29. VALUE PROPOSITIONS what are you offering them? what is thatgetting done for them? do they care? 30. CHANNELS how does each customer segment want to be reached? through which interaction points? 31. CUSTOMER RELATIONSHIPS what relationships are you establishing with each segment? personal? automated? acquisitive? retentive? 32. REVENUE STREAMS what are customers really willing to pay for? how?are you generating transactional or recurring revenues? 33. KEY RESOURCES which resources underpin your business model? which assets are essential? 34. KEY ACTIVITIES which activities do you need to perform well in your business model? what is crucial? 35. KEY PARTNERS which partners and suppliers leverage your model?who do you need to rely on? 36. COST STRUCTURE what is the resulting cost structure?which key elements drive your costs? 37. images by JAM customer segments key partners cost structure revenue streams channels customer relationships key activities keyresources value proposition 38. sketch out your business model 39. 9 Guesses Guess Guess Guess Guess Guess Guess Guess Guess Guess 40. But, Realize They re Hypotheses 41. More startupsfail froma lack of customersthan from a failure of product development (focus on who more than what) 42.

    • Test Hypotheses:
    • Problem
    • Customer
    • User
    • Payer
    • Test Hypotheses:
    • Demand Creation
    • Test Hypotheses:
    • Channel
    • Test Hypotheses:
    • Product
    • Market Type
    • Competitive
    • Test Hypotheses:
    • Pricing Model / Pricing
    • Test Hypotheses:
    • Size of Opportunity/Market
    • Validate Business Model
    • Test Hypotheses:
    • Channel
    • (Customer)
    • (Problem)

    Customer Development Team Agile Development 43. ThePivot

    • The heart of Customer Development
    • Iteration without crisis
    • Fast, agileandopportunistic