why lean startup changes everything

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23.1.2014 1 http://de.slideshare.net/pragmaticsolutions Why Lean Startup changes everything Fredi Schmidli & Adrian von Orelli Agile_Company_Series Zürich, 23.1.2014 1

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The myth goes that the more perseverance, brilliance, good timing and a good product, the higher the chance for success. I will show you why exactly the opposite is true: Survival and, even more so, success are highly correlated with the successful application of the “Build-Measure-Learn Feedback Loop”. The fact that this lean framework can be learned and taught is the final kill of the myth. I will give examples of how you can deliver more business value earlier and with less risks by testing everything as soon as possible using a so-called Minimum Viable Product. The Agile Company Series January 23, 2014, Afternoon and Early Evening This is a free event. For registration: http://saat-network.ch/2013/12/agile-company-lean-startup-changes-everything/

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Page 1: Why Lean Startup changes everything

23.1.2014 1http://de.slideshare.net/pragmaticsolutions

Why Lean Startup changes everything

Fredi Schmidli & Adrian von Orelli

Agile_Company_Series Zürich, 23.1.2014

1

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Fredi Schmidli• Business Angel and

Boardmember:

www.startangels.ch

• Entrepreneur

• Community Builder:

- meetup.com/Lean-

startup-Zurich/

- Agile Breakfasts

2

Adrian von Orelli

• EE PhD ETHZ

• R&D leader

• Innovator

• 15 years of high tech

product development

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Your expectations?

• ... ?

• ... ?

• ... ?

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Collective experience?

• Who heard about

• Lean Manufacturing?

• Scrum/Kanban?

• Lean Startup?

• Who worked with it?

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What is a start up?

A human institution designed to create new products

and services under condition of extreme uncertainty(Eric Ries)

A Start up is a temporary organization in search of a

scalable, repeatable business model (Steve Blank)

Business Model must be found before you run out of money

>> Efficient searching required

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Two ways to build a Startup

1. Plan then Execute (Conventional way)

• Assumption: excellent plan and execution > success

• Focus: do the things right / Perseverance myth

• Business plan / Waterfall product innovation

2. Lean startup way• Assumption: Dynamic systems require self-organization and fast

learning.

• Focus: do the right things

• Business Model Canvas / Agile product innovation

6

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Feedback loop

Hypothesis verified by experiment, facts based approach

Turn hypothesis in ......

Minimum viable

Product (MVP)Innovation accounting

Pivot or persevere? weeks

not

years

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Lean is …

a company culture touching all aspects: Values,

Leadership, Employee Development, Empowerment,

Performance, Accountability, …

not a collection of tools

A culture can not be copied

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Lean startup way

Culture: Embrace to learn core aspects every day to master condition of

extreme uncertainty

Pre-requisites: Transparency, trust and courage

Method: Choose right metric, learn fast by using short feedback loop, agile

development

Goal: MVP asap / minimize cycle time to learn fast

Characteristics:

Handle all nine dimensions of Business Model Canvas

Every relevant business aspect is verified by an experiment

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Lean EcoSystem

Lea

n E

coS

yste

m

Classic Lean Management

Invented by Toyota after

WW2

Maximize efficiency

under “stable” conditions

Failed in the creative field

Focus on continuous

improvement and

execution excellence

Lean Startup

Blank /Ries /Osterwalder

5 years old

Maximize innovation

efficiency under extreme

uncertainty

Agile development

(not waterfall)

customer development

(not market research)

It took 50+ years until agile SW development methods finally started to

successfully combine innovation with lean management principles

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Lean Startup Components

Lea

n S

tartu

p C

om

po

ne

nts

“Steve Blank”

Customer Developmentopposed to market research

Apply scientific method

to validate customer and

business assumptions.

Docu with BM canvas

Customer discovery

Customer validation

Customer creation

Company building

“Eric Ries”

Lean Startup

Agile Development

Short cycle time MVP

learn fast

Innovation accounting

growth engine types

Validate assumptions

pivot or persevere

choose relevant metric

sticky, viral, paid

“Alexander Osterwalder”

Business Model Generation

Consider all nine

business dimensions

Tackle highest risks first

Common language to

talk about business

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Lean Startup in a Nutshell:

A Startup which combines fast, iterative development

methodologies with customer development principles

(Brant Cooper)

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Minimal Viable Product (Wikipedia)

The minimum viable product 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. (Eric Ries)

An MVP is not a minimal product, it is a strategy and

process directed toward making and selling a product

to customers.

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Examples of MVP

http://www.thisispaper.co.uk/2013/10/10/mvps-an-introduction/#more-1819/

4. Test vision of service offering for Dropbox

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Exercise (5 minutes)

Define the MVP for your current product idea

Hint:

• Where is your largest risk?

• What do you want to learn with your MPV?

• What metric will you measure?

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Examples

http://steveblank.com/2013/07/22/an-mvp-is-not-a-cheaper-product-its-about-smart-learning/

5. Test business model for Drone based imaging system

MVP: Rent camera and plane

instead of building a drone

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Examples

MVP

3. Test vision for flat TV

From Tom Kelly „the ten faces of innovation“

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Customer Development

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More information

HBS article „Why lean start up changes everything“

www.steveblank.com

Steve lank: “Startup Owners Manual”

Eric Ries: „Lean start up“

Alexander Osterwalder: “Business Model Generation”

Brant Cooper: “Entrepreneurs Guide to Customer

Development”

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Expectations met?

• Yes?

• Somehow?

• No?

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Contact Information

Fredi Schmidli

[email protected]

Adrian von Orelli

[email protected]