hi

Thanks for coming to this session.

You Are Here

• Interested in startups that create products• Interested in the concept of “lean startups”• Have been, currently are, or are thinking

about founding a startup

I hope to get you here

• Clear, high level understanding of Market Validation, Customer Development and The Lean Startup

• Some level of understanding of how these benefit the creation of a successful product

• Excited to look into these three models and try them out and see what works for you

Market Validation

What does this mean to you?

What is Market Validation?

A process for determining whether or not your target market is:•Real•Worthy of your idea•Addressable

Really. What is Market Validation?

• Primary (Proprietary) Market Research1. Face to Face Interviews2. Phone Interviews3. On Line Interviews / Surveys

• Secondary Market Research– Analysts– Market Research

What does Market Validation Teach Us?

• What state is the market in?– Early adopter, early majority, late majority, laggards

• What is the competition?– Actual competitors– Alternatives to a true solution

• What are customers willing to pay?• How serious is the need?• What is the operational cost to adopting your

proposed solution?

Takeaway: Market Validation ensures that you actually have an

opportunity worth pursuing, and helps you understand what solution will actually capture that market opportunity.

Customer Development

What does this mean to you?

What is Customer Development?A process for achieving product-market fit that helps you to definitively:•Define your customer•Define your market state•Define your go to market strategy•Ensure these definitions are all real

Customer Development:“The Four Steps To Epiphany”

AchieveMarket Fit

AchieveMarket Dominance

Really. What is Customer Development?

• Business Visionary (CEO)– Customer (Day to day user, Economic buyer,

decision maker)– Problem / Solution

• Scale of recognition (Latent or Active)

– Impact of pain / Mission Critical?– How does the customer spend their day now?

• Tech Co-Founder (CTO or Chief Maker)– Product (Features, Benefits, IP, TCO, Dependency

Analysis)

Takeaway: Customer Development is a discipline for bringing a product to the market successfully in a startup.

Lean Startup

What does this mean to you?

What is a Lean Startup?A learning organization, seeking to discover a working business model

How does a Lean Startup Work? The Lean Startup Loop

Customer Development Engineering

http://www.startuplessonslearned.com/2008/09/customer-development-engineering.html

Takeaway: A Lean Startup is a solution finding organization,

who’s sole purpose is to validate a business model.

Business Model

What does this mean to you?

What is a Business Model?A business model describes the rationale of how an organization creates, delivers, and captures value (economic, social, or other forms of value).

Business Model Canvas

Business Model Design + Customer Development

Sounds Nice. Here’s Reality

• Startups are hard. It’s REALLY difficult to actually execute. Don’t ask me why. It just is.

• You will be way better off if you are highly skilled and experienced in your endeavor than otherwise.

• Building a quality team is key, and also hard. A-Level players with good chemistry have the best chance of winning.

More Reality

• You may need money to achieve product-market fit. Raising money sucks for most of us, and has nothing to do with innovation or doing great work.

• Competition validates your market, but can throw you off your path when you start losing deals to it.

• Unless you have innovated before and gone through the pain of mistakes, you will likely make a lot of them.

How to deal with reality

• Lone founder is a tough road. Get a co-founder.• Get advisors and mentors. You have blind spots.• Get laser focused on a minimum viable product.

(makes raising money easier when you have success, or maybe not necessary at all)

• Make goals and measure everything.• Make sure you can’t not do the startup. It’s the

only thing that will get you through.

Practical Application:

• Find a balance of Market Validation & Customer Development that works for you.

• Check yourself against your Business Model Canvas.

• Try Squared Circle Agile for Product Development (I made this crap up).

• Say AAARR! To Determine your MVP. (Acquisition, Activation, Retention, Referral & Revenue)

• Be a Data Driven Founder.

Squared Circle Agile:“The Perfect Square Has No Corners” Tao Te Ching 41

Product Market Validation as Metrics

AARRR Model (Viral, Sticky or Paid)

http://500hats.typepad.com/500blogs/2010/01/startup-metrics-for-pirates-lean-startup-circle-jan-2010.html

AARRR Model

http://500hats.typepad.com/500blogs/2010/01/startup-metrics-for-pirates-lean-startup-circle-jan-2010.html

Data Driven Startup Philosophy & Framework

http://www.slideshare.net/dcancel/data-drivenstartups

The point of testing is to prove or disprove assumptions quickly

Optimize Your Startup for Learning not Data

Checklist for Data Driven Startup: ★ Operating Dashboard Conversion Funnel Analysis★ Cohort Analysis★

Data Driven Operating Dashboard

http://www.slideshare.net/dcancel/data-drivenstartups

Data Driven Conversion Funnel

http://www.slideshare.net/dcancel/data-drivenstartups

Data Driven Cohort Analysis

http://www.slideshare.net/dcancel/data-drivenstartups

Helpful? Hope So.

Discussion Time.

@marcuswhitney