Lean Startup Introduction

Inspirations

Customer Development + Lean Manufacturing + Agile Software Development

___________________________ = Lean Startup

90% of startups fail Only 4% make it to $1 million turnover

How startups are built?

Start with an idea ☟

Write Business Plan ☟

Raise $$ ☟

Build Product ☟

Launch ☟

Marketing ☟

90% chance to fail

No business plan survives first contact with customers

Steve Blank - godfather of the Lean Startup

Waterfall Product Development

Requirements

Specifications

Design

Implementation

Verification

Maintenance

Problem: known

Solution: known

Achieving Failure

= Successfully executing a bad plan

On budget, on time, well designed?

“There is nothing so useless as doing efficiently what should not be done at all.” Peter Drucker (1909-2005)

Agile Product Development

“Product Owner” or in-house customer

Problem: known

Solution: unknown

Lean Startup

Problem: unknown

Solution: unknown

Problem (What)

Unknown

Solution

(How)

Waterfall

AgileLean

StartupKnow

n

Known Unknown

Can it be done? Should it be done?

A startup is a temporary organization formed to search for a repeatable and scalable business model Steve Blank

Execute

Exploit Planning Predictable outcome Do not fail

Optimize

VSSearch

Explore

Experimenting

Unexpected Discovery

Test & fail

Learn

Reactive and not perfect Adaptability over planning

Learn if your assumption is true of false

True: move on to the next riskiest assumption

False: review your hypotheses

Select the riskiest assumption

Build an experience or MVP to test this assumption on the market.

Measure customer behaviours during that experience

You are wasting if you are not learning

Lean Canvas

Search Validate Grow

Problem / Solution Product / Market Scale

Customer Discovery Customer Validation Company Building

Customer/Problem Solution

Delivering Value Retention

Channels Growth Engine

Pricing Virality, CAC, CLTV

Sales Execution Scale Organisation Scale Operations

Scale Delivery

Quality

Quantity

Growth Experiment

Problem interview

Solution interview

Concierge Landing Page

Mock Sales

Crowd funding

MVP Optimisation

☞☞

Diffusion process

Source: the diffusion process, by Joe M. Bohlen, George M. Beal and Everett M. Rogers, 1957

Source: the diffusion process, by Joe M. Bohlen, George M. Beal and Everett M. Rogers, 1957

Target micro-segment

Customer & problem

? ?

A startup is a temporary organization formed to search for a repeatable and scalable business model Steve Blank

Turn your hypotheses into facts

Based on the outcome, pivot or persevere. Go back to step 1.

Identify the riskiest assumption from your business model.

Design and run an experiment that can prove the hypothesis true or false.

1

2

3

Iterate

The better you know your customers the better you can help them Iain Wallace - 2015

Problem? Need? Pain? Desire?

Think job-to-be-done...

Customer don’t just buy products. They “hire” them to do a job.

Clayton Christensen

People don’t want to buy a drill. They want a hole. Theodore Levitt - 1962

Customer Discovery:

Find a problem worth solving for your customers

Don’t Survey Questionnaire Focus group Market Study Your personal experience Conversation with friends

Customers Discovery

Do ● Observation ● Interview ● Role play ● Games

☞ Behaviours

Question:

“I like the idea of having one portable device to fulfill all my needs”

Sources: http://universalmccann.bitecp.com/um_report_pttp_lr3.pdf http://www.gsb.stanford.edu/news/headlines/itamar-simonson-emanuel-rosen-how-digital-age-rewriting-rule-book-consumer-behavior

Market study: No need for iPhones in 2007

Conclusions:

“Users not motivated to replace their digital cameras, cellphones and MP3 players with one device that did everything.”

“No need for a convergent product in the U.S., Germany and Japan”

It’s really hard to design products by focus groups.

A lot of times, people don’t know what they want until you show it to them.

Steve Jobs

If I had asked people what they wanted, they would have said faster horses Henry Ford

what people do

what people think

what people say

Franck Debane @fdebane

How to understand the customer need?

Observation witness the customer experiencing the problem methods: day in the life, shadowing, video journal, fly in the wall

Interviews listen the customer talk about the problem, ask questions this is called Problem Interview

Immersion

https://www.youtube.com/watch?v=CKsSvR5u-qk

GET OUT OF THE

BUILDING

How to do Customer Interviews?

Be like Columbo

Nice with everyone Look at the problem from all possible angles Trust no one Draw your own conclusions based on FACTS

Interviews are hard Empathy and Active listening (no questionnaire) Forget your idea Focus on the customer problem

Guide and Drill Learn, be curious Ask why. Why why. Be nosy. Find facts and avoid opinions Watch for bias

Ask about past events

Do you get headaches frequently if so how often?

Do you get headaches occasionally if so how often?

Source: John Hayes, Interpersonal Skills at work. Routledge 2002 referencing Loftus, 1975

2.2 / week

0.7 / week

What you can discover Bigger problems the customer has Alternative solutions Cost of the problem How customer looks for solution Root causes of the problem Key insights to design a solution Pain level...

has the problem

aware of having the problem

looking for a solutionhacked a solution

pay for a solution

Pain level…

Early adopter?

1. What do you do when you have this problem? 1. What else did you try? 2. Tell me the last time you had this problem... 3. How much would you pay for this? 4. Why did you do this? 5. Does it happen to you often? 6. How much does it cost you?

CustomerSegment

Problem

hypotheses

Interview preparation

Go with a partner Understanding Notes Bias

Finding customers Persona Behaviours Alternative solutions IRL. Online.

Starting the conversation Just one person “I am doing a research on ...” Smile. Make them comfortable Trust and complicity About them

After the interview Thank you Answer questions Ask for introductions and referrals Debrief with partner

Solution Interview

Tangible proof of commitment

Something that has a cost for the buyer

Tangible proof of commitment

Money - pre-order Check - to cash later A signed agreement - with blood? Invitation to another meeting - location? An email, phone number, access to friends list Access to their sensitive data Something that is valuable...your ideas...

1. I love it, it’s amazing. 2. That’s great. Please let me know when it’s

ready. 3. I will surely buy this! 4. When it’s ready, I will tell my friends. 5. This sucks! 6. Amazingly awesome! 7. I love it. Here is my money...

Unless commitment is made, there are only

promises and hopes; but no plans

Peter Drucker