Lean Startup talk at Business Bootcamp, Brunel
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Transcript of Lean Startup talk at Business Bootcamp, Brunel
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Lean StartupAn overview
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Disclaimer
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Disclaimer
• No silver bullets
• No substitute for experience
• Just one tool
• Not the whole tool
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Disclaimer
• No silver bullets
• No substitute for experience
• Just one tool
• Not the whole tool
![Page 5: Lean Startup talk at Business Bootcamp, Brunel](https://reader031.fdocuments.net/reader031/viewer/2022020217/5441093dafaf9f52208b4600/html5/thumbnails/5.jpg)
Disclaimer
• No silver bullets
• No substitute for experience
• Just one tool
• Not the whole tool
![Page 6: Lean Startup talk at Business Bootcamp, Brunel](https://reader031.fdocuments.net/reader031/viewer/2022020217/5441093dafaf9f52208b4600/html5/thumbnails/6.jpg)
Disclaimer
• No silver bullets
• No substitute for experience
• Just one tool
• Not the whole tool
![Page 7: Lean Startup talk at Business Bootcamp, Brunel](https://reader031.fdocuments.net/reader031/viewer/2022020217/5441093dafaf9f52208b4600/html5/thumbnails/7.jpg)
“Lean Startup”
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What is a startup?
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What is a startup?
“The act or fact of starting something; a setting in motion.”
-Dictionary (useless)
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What is a startup?
“Startups are fresh, new companies trying to do cool stuff.”
-Instinctive (still mostly useless)
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What is a startup?
“A startup is an organization formed to search for a repeatable and scalable business model.”
-Steve Blank
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What is a startup?
“A startup is a human institution designed to deliver a new product or service under conditions of extreme uncertainty.”
-Eric Ries
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What is a startup?
“...essentially a startup is a new business designed for scale.”“A startup is a small company that takes on a hard technical problem.”
-Paul Graham
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What is a startup?
“A startup is a business which has ambitions and plans to grow by a large factor over the next few years.”
-Me!
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Key points
• Uncertainty, search, difficulty
• Ambition, growth
• Methods, plans
• Business, money
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How should I build a startup?
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Some typical approaches that don’t
work
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1. First, write a business plan...
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2. Raise lots of money and then figure it out
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3. Plan it, build it and they will come
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4. Get lots of users and figure the rest out later
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5. Don’t spend anything at all.
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A better method... “Lean”
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Lean is not...
• Cheap
• Rigid
• Limited to simple ideas
• The magic key to success
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Lean is...
• A method to organise the chaos
• Less waste
• Less risk
• More learning
• A common language
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The fundamental principle of “Lean”
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• A business is there to achieve a purpose
• Building things people don’t need is waste
• Building large things that people don’t need is large waste
• You have no idea what you’re doing
• You have no idea what to build
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• A business is there to achieve a purpose
• Building things people don’t need is waste
• Building large things that people don’t need is large waste
• You have no idea what you’re doing
• You have no idea what to build
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• A business is there to achieve a purpose
• Building things people don’t need is waste
• Building large things that people don’t need is large waste
• You have no idea what you’re doing
• You have no idea what to build
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• A business is there to achieve a purpose
• Building things people don’t need is waste
• Building large things that people don’t need is large waste
• You have no idea what you’re doing
• You have no idea what to build
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• A business is there to achieve a purpose
• Building things people don’t need is waste
• Building large things that people don’t need is large waste
• You have no idea what you’re doing
• You have no idea what to build
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Sounds hard!
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The “Lean” approach:
Build the smallest, easiest, smartest thing that teaches you what you need to learn
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The “Lean” approach:
Build the smallest, easiest, smartest thing that teaches you what you need to learn
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What do you need to learn?
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Do people want it?
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Can I sell it?
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Can I build it?
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A startup plan
1. Do people want it?
2. Can I sell it?
3. Can I build it?
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The “Lean” approach:
Build the smallest, easiest, smartest thing that teaches you what you need to learn
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Minimum Viable Product
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Minimum Viable Product
• Landing page
• Paper prototype
• Presentation/pitch
• Anything that enables you to learn!
•
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Minimum Viable Product
• Landing page
• Paper prototype
• Presentation/pitch
• Anything that enables you to learn!
•
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Minimum Viable Product
• Landing page
• Paper prototype
• Presentation/pitch
• Anything that enables you to learn!
•
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Minimum Viable Product
• Landing page
• Paper prototype
• Presentation/pitch
• (Fake) demo video
• “Concierge MVP”
• Anything that enables you to learn!
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Minimum Viable Product
• Landing page
• Paper prototype
• Presentation/pitch
• (Fake) demo video
• “Concierge MVP”
• Anything that enables you to learn!
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Minimum Viable Product
• Landing page
• Paper prototype
• Presentation/pitch
• (Fake) demo video
• “Concierge MVP”
• Anything that enables you to learn!
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MVP
• MVP is not a crappy version of the product.
• MVP is driven by the questions you need answered.
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The Lean Cycle
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The Lean Cycle (backwards)
Metric
Hypothesis Experiment
Text
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Lean Toolkit
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Metrics
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Up and to the right...
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Vanity metrics
• User signups
• Traffic
• Retention rate
• Any metric in a vacuum
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Good metrics
• Mostly: A/B test results
• Cohort breakdowns
• Retention rates over time
• Activity stream
• Any metric that’s actionable
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Actionable?
• Must be related to the key engines of your business...
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Engines:value and growth
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Engine of value
• How much value is your startup delivering?
• Is it enough to be worth paying for?
• Do people perceive that and agree?
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Engine of growth
• How does your startup acquire new customers?
• Paid
• Viral
• Sticky
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Engine of growth
• How does your startup acquire new customers?
• Paid (CAC & LTV)
• Viral (Viral Coefficient)
• Sticky (Retention rate)
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Actionable Metrics
• Actionable metrics are the ones which lead to a change which you know will impact your key drivers.
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“Innovation Accounting”
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Lean reporting
• If you only report usage/revenue, that’s what you’ll be judged on
• Track validated learning instead
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Pivots(hot buzzword alert)
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Experiment failed... what now?
• Why did it fail? Which assumption was wrong?
• Can the assumption be tweaked, or does it need to be thrown out?
• How can we rework the business model now we know that we know this?
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Experiments succeeded, but...
• If it’s not working well enough to build a sustainable business, it’s not working, period.
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• Zoom-in pivot: single feature becomes the whole product
• Zoom-out pivot: the product becomes a feature of a larger product
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• Customer segment pivot: some customers like us, but not the ones initially targeted
• Customer need pivot: the product doesn’t solve a big enough problem for our customers
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• Business architecture pivot: low margin, high volume, vs. high margin, low volume
• Value capture pivot: change the way you monetise
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But... don’t abuse pivots.
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Let’s recap...
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Startups are experiments
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Test critical things as quickly as possible
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Work back from what you want to test...
Metric
Hypothesis Experiment
Text
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Actionable metrics, not vanity metrics
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Report on learning progress
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Pivot when assumptions are wrong
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Lean is just a method Be smart
Get advice
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Where to go from here...
• “The Lean Startup” - Eric Ries
• “Running Lean” - Ash Maurya
• “The entrepreneur’s guide to customer development” - Brant Cooper & Patrick Vlaskovits
• Numerous blogs online...
• Mentors...
• EXPERIENCE!