Lean StartupBuild - Measure - Learn

Waterfall Development- Waterfall Development was all about execution of the requirements

document

- Early versions of the product were shared with customers in Alpha and Beta Testing

- The goal of early customer access to the product was to uncover bugs not to provide feedback on features or usability.

Waterfall Development- Only after shipping and attempting to sell the product would a

startup hear any substantive feedback from customers

- After months or even years of development, entrepreneurs learned the hard way that customers were not buying their product because they did not need or want most of its features

Agile Development- Best practices in software development started to move to agile

development in the early 2000’s

- This methodology improved on waterfall by building software iteratively and involving the customer

- It lacked a framework for testing all commercialization hypotheses outside of the building.

- With Agile you could end up satisfying every feature a customer asked for and still go out of business.

What is Lean Startup?- The Lean Startup provides a scientific approach to creating and

managing startups and get a desired product to customers' hands faster.

- Too many startups begin with an idea for a product that they think people want.

- They then spend months, sometimes years, perfecting that product without ever showing the product to the prospective customer

- They never spoke to prospective customers and determined whether or not the product was interesting.

What is Lean Startup?- Lean isn't simply about spending less money. Lean isn't just about

failing fast, failing cheap.

- Lean is about putting a process, a methodology around the development of a product.

- A major improvement over Waterfall development, Lean Startup lets startups be fast, agile and efficient.

Lean Startup- The goal of Lean process & Build-Measure-Learn is not to build a

final product to ship or even to build a prototype of a product

- The goal is to maximize learning through incremental and iterative engineering

- Learning could be about product features, customer needs, the right pricing and distribution channel, etc.

WORK SMARTER NOT HARDER- The Lean Startup methodology has as a premise that every startup

is a grand experiment that attempts to answer a question.

- The question is not "Can this product be built?" Instead, the questions are "Should this product be built?" and "Can we build a sustainable business around this set of products and services?"

WORK SMARTER NOT HARDER- This experiment is more than just theoretical inquiry; it is a first

product.

- If it is successful, it allows a manager to get started with his or her campaign

- enlisting early adopters, adding employees to each further experiment or iteration

- Eventually starting to build a product.

- By the time that product is ready to be distributed widely, it will already have established customers

DEVELOP AN MVP- It’s critical to understand that an MVP is not the product with fewer

features.

- 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

DEVELOP AN MVP- Each time you build an MVP you also define what you are trying to

test/measure

- The goal continues to be to maximize learning not to build a beta/fully featured prototype of the product.

DEVELOP AN MVP- The first step is figuring out the problem that needs to be solved

and then developing a minimum viable product (MVP) to begin the process of learning as quickly as possible.

- Once the MVP is established, a startup can work on tuning the engine. This will involve measurement and learning and must include actionable metrics that can demonstrate cause and effect question.

DEVELOP AN MVP- A core component of Lean Startup methodology is the build-

measure-learn feedback loop

DEVELOP AN MVP

DEVELOP AN MVP- The goal of Build-Measure-Learn isn’t just to build things, the goal is

to build things to validate or invalidate the initial idea.

DEVELOP AN MVP- When this process of measuring and learning is done correctly, it

will be clear that a company is either moving the drivers of the business model or not.

- If not, it is a sign that it is time to pivot or make a structured course correction to test a new fundamental hypothesis about the product, strategy

Validated Learning- Rigorous method for demonstrating progress when one is

embedded in the soil of extreme uncertainty.

- Validation comes in the form of data that demonstrates that the key risks in the business have been addressed by the current product.

- That doesn’t always mean revenue, either

Validated Learning- “By all accounts, what impressed investors the most were two facts

about Facebook’s early growth … More than half of the users came back to the site every single day. This is an example of how a company can validate its value hypothesis - that customers find the product valuable.”

Innovation Accounting- Innovation accounting enables startups to prove objectively that

they are learning how to grow a sustainable business.

- The process is done with three steps

Innovation Accounting Process- 1) Establish the baseline.

- Where are you now, and how are you currently performing?

- You can run an MVP test to set some benchmark data points.

- This might involve a smoke test, with pure marketing, just to see if there interest from potential customers.

Innovation Accounting Process- 2)Tune the engine. Initiate your experiment to test your value or

growth hypothesis.

- e.g. a company might spend time improving the design of its product to make it easier for new customers to use.(This presupposes that the activation rate of new customers is a driver of growth)

Innovation Accounting Process- 3) Pivot or persevere. Based on the data, you can persevere with

the product/features/process you now know to be correct, or pivot and test your next assumption.

Bad idea to use a lean startup methodology?

- As a general rule, if people die when your software doesn't work, then you better ship only when you are 100% feature complete and tested.

- You wouldn't want to build systems with many downstream dependencies in an agile way.

- In short: anywhere where the cost of "pivoting" or making a mistake is very expensive would be a bad place to apply lean startup principle

Bad idea to use a lean startup methodology?

- Lean startups work well when the general problem is solvable, but your risk is entirely market risk - that is, the risk that no one wants your product.

Sources- http://theleanstartup.com/principles

- http://www.startuplessonslearned.com/2008/09/lean-startup.html

- http://www.startuplessonslearned.com/2009/08/minimum-viable-product-guide.html

- http://www.startuplessonslearned.com/2010/09/good-enough-never-is-or-is-it.html

Sources- https://www.youtube.com/watch?v=fEvKo90qBns

- https://steveblank.com/2015/05/06/build-measure-learn-throw-things-against-the-wall-and-see-if-they-work/

- https://www.quora.com/Is-there-any-flaw-or-drawback-to-the-lean-startup-methodology

- https://paulminors.com/the-lean-startup-eric-ries-book-summary-pdf/

- http://blog.hypeinnovation.com/the-10-methods-of-the-lean-startup