Date post: | 21-Oct-2014 |
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Lean Startup Essentials
@lfittl @nikgraf
SeedHack23rd September 2011
Lean Startup Essentials
Whats the Lean Startup?
• How to create order in the (unavoidable) chaos of a startup
• First learn, then execute
• Quick Iterations on your business model
#1: IntroductionLean Startup Essentials
Most startups failfrom a lack of (paying) customers.
#1: Lean StartupLean Startup Essentials
Why?Startups are not just a small
version of a big company.
#1: Lean StartupLean Startup Essentials
Startup: Temporary organization used to
search for a repeatable and scalable business model.
As defined by Steve Blank.
#1: Lean StartupLean Startup Essentials
We needstructured learning
before we execute.
#1: The Lean CanvasLean Startup Essentials
The Lean Canvas
#1: The Lean CanvasLean Startup Essentials
#1: The Lean CanvasLean Startup Essentials
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 Metrics
Key activities you measure
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
Problem
• The top 3 problems the customer is facing today
• These might be things they’ve already started building in house, because there is an active need
#1: The Lean CanvasLean Startup Essentials
Problem Key Activities Value PropositionValue Proposition
CustomerRelationships
Customer Segments
Problem
Key Resources
Value PropositionValue Proposition
Channels
Customer Segments
Cost StructureCost StructureCost Structure Revenue StreamsRevenue StreamsRevenue Streams
Customer Segments
• Narrow group of people that buy/use your product
• Marketplace biz models =2 cust segmens (or more)
#1: The Lean CanvasLean Startup Essentials
Key Partners Key Activities Value PropositionValue Proposition
CustomerRelationships
Customer Segments
Key Partners
Key Resources
Value PropositionValue Proposition
Channels
Customer Segments
Cost StructureCost StructureCost Structure Revenue StreamsRevenue StreamsRevenue Streams
Value Proposition
• Single, clear, compelling message that turns an unaware visitor into an interested prospect
• What you put on yourlanding page
#1: The Lean CanvasLean Startup Essentials
Key Partners Key Activities Value PropositionValue Proposition
CustomerRelationships
Customer Segments
Key Partners
Key Resources
Value PropositionValue Proposition
Channels
Customer Segments
Cost StructureCost StructureCost Structure Revenue StreamsRevenue StreamsRevenue Streams
Solution
• Whats the Minimum viable product (MVP) ?
• Minimal set of functionality to solve each problem of the customer
#1: The Lean CanvasLean Startup Essentials
Key Partners Key Activities Value PropositionValue Proposition
CustomerRelationships
Customer Segments
Key Partners
Key Resources
Value PropositionValue Proposition
Channels
Customer Segments
Cost StructureCost StructureCost Structure Revenue StreamsRevenue StreamsRevenue Streams
Channels
• How does the customer learn about your product?
• B2B and B2C vastly different!
• SEM, SEO, Friend Invites, Social Media, Direct Sales, Tradeshows, PR, Content Marketing, etc.
#1: The Lean CanvasLean Startup Essentials
Key Partners Key Activities Value PropositionValue Proposition
CustomerRelationships
Customer Segments
Key Partners
Key Resources
Value PropositionValue Proposition
Channels
Customer Segments
Cost StructureCost StructureCost Structure Revenue StreamsRevenue StreamsRevenue Streams
Revenue Streams
• How much is the problem worth to the customer?
• Not how much it costs you to implement the solution
• Avoid Free and Freemium! (marketing tactic, not rev model)
#1: The Lean CanvasLean Startup Essentials
Key Partners Key Activities Value PropositionValue Proposition
CustomerRelationships
Customer Segments
Key Partners
Key Resources
Value PropositionValue Proposition
Channels
Customer Segments
Cost StructureCost StructureCost Structure Revenue StreamsRevenue StreamsRevenue Streams
Cost Structure
• What are your HR costs?(rough estimate)
• Marketing channel costs
• Infrastructure costs
• It’s about Unit Economics, not your made-up 5 year plan
#1: The Lean CanvasLean Startup Essentials
Key Partners Key Activities Value PropositionValue Proposition
CustomerRelationships
Customer Segments
Key Partners
Key Resources
Value PropositionValue Proposition
Channels
Customer Segments
Cost StructureCost StructureCost Structure Revenue StreamsRevenue StreamsRevenue Streams
Live Example
Someone from the audience:Pitch us an idea
4 other people:What’s the problem?
What’s the customer segment?What’s the value proposition?What’s the revenue model?
Lean Startup Essentials #1: The Lean Canvas
Test Your Hypothesis
#2: Customer Discovery
Customer Interviews
30 min in-person withyour prototypical customer
People like talking about their field - explore their worldview.
Lean Startup Essentials #2: Customer Discovery
How to conduct an interview
1. Set context & tell your story2. Tell your problem hypothesis 3. Listen to their worldview
4. Ask for follow up / references
Lean Startup Essentials #2: Customer Discovery
DO NOT sell them your solution
Online Market Tests:
Google AdwordsFake Landing Page with
“Signup to be notified when we launch”“Can we call you to ask a couple of Qs?”
Lean Startup Essentials #2: Customer Discovery
Amy Hoy’sSales Safari:
Lurk in online forums of your customer segment, learn how they
talk about products & benefits
Lean Startup Essentials #2: Customer Discovery
Q&A
Lean Startup Essentials
Literature
Lean Startup Essentials Literature
Steve Blank - The Four Steps to the Epiphany
steveblank.com
Lean Startup Essentials Literature
Lean Startup Essentials Literature
Alex Osterwalder - Business Model Generation
businessmodelgeneration.com
Lean Startup Essentials Literature
Eric Ries - The Lean Startup
lean.st
Lean Startup Essentials Literature
Ash Maurya - Running Lean
book.runningleanhq.com
Neil Davidson - Don’t Just Roll the Dice
Lean Startup Essentials Literature
Thanks!
Lean Startup Essentials
@lfittl @nikgraf