K N O W NU N K N O W N S

STARTUP INSTITUTEAPRIL 5, 2015

INTRO TO LEANAND STARTUP EXPERIMENTS

K N O W NU N K N O W N S

PAGE 2

AGENDA● Setting the stage (frameworks, definition, jargon)● Early-stage customer development (interviews!!!)● Role of prototypes & pilots● Finding product-market fit through experiments● Unpacking hypotheses and assumptions● Integrating experimentation into team/company building● If time…

○ packaging validation, fundraising, growth● Q&A

K N O W NU N K N O W N S

PAGE 3

BACKGROUND

● Successes & failures w/ 5 startups, 2 of my own● Spent the last 3-4 years obsessed with product● Particular focus:

○ Early-stage validation○ Experiment & systems design○ Acquisition, retention, growth

● Community Manager at startup incubator○ Internal metrics and feedback loops

WHY IS NOW DIFFERENT?Pre-2000s vs. Post-2010s

PAGE 4

K N O W NU N K N O W N S

K N O W NU N K N O W N S

PAGE 5

LANDSCAPE

● Barrier to entry for “building” is at all-time low

● Getting traction / to-market is WAY CHEAPER at earliest stages

● Multiple platforms (some free) that reach BILLIONS of USERS

● We’ve learned a lot from our mistakes and failures

SETTING THE STAGE:FRAMEWORKS / DEFINITIONS / JARGON

PAGE 6

K N O W NU N K N O W N S

K N O W NU N K N O W N S

PAGE 7

JARGON

METHODOLOGIES

● Lean Startup● Design Thinking● Agile Development

7

JARGON / BUZZWORDS

● Growth hacking● Pivoting● MVP’s

K N O W NU N K N O W N S

PAGE 8

Hypothesis – falsifiable supposition made on the basis of limited information, as a starting point for further investigation

vs.

Assumption – something believed to be true, without proof

DEFINITIONS

Experiment – controlled procedure carried out to test hypotheses

vs.

Planning – a detailed proposal for achieving something

K N O W NU N K N O W N S

PAGE 9

ULTIMATELY...

We want to practice disciplined entrepreneurship. That means setting intention to our vision, fleshing out

underlying assumptions, tracking our activities effectively, and making the smart business-related decision.

K N O W NU N K N O W N S

PAGE 10

EXPLORE → REFINE

K N O W NU N K N O W N S

PAGE 11

THE LEARNING LOOP

EARLY-STAGE CUST. DEV+++ INTERVIEWS +++

PAGE 12

K N O W NU N K N O W N S

K N O W NU N K N O W N S

PAGE 13

Multiple factors go into opportunity analysis

● Market assessment (size, $$$, competitive landscape)

○ This problem demonstrates large potential as a market.

○ This problem and market will continue to grow.

● Product X Execution X Team X Luck X ...

K N O W NU N K N O W N S

PAGE 14

FOCUS ON THE ACTIONABLE

● There are real customers that will pay me to solve their problem.

● This problem demonstrates large potential as a market.

● This problem and market will continue to grow.

aka TALK TO REAL HUMANS

K N O W NU N K N O W N S

INTERVIEW TIPS● Embrace bad news (don’t “want to hear things...listen!)

● Encourage candor through dialogue and body language

○ Pay attention to theirs as well

● Ask OPEN-ENDED question about BEHAVIOR from their PAST

● Take rigorous notes

● Thank them and follow up (startup karma)

PAGE 15

K N O W NU N K N O W N S

INTERVIEW DON’Ts

● No Leading Questions

● No “would you” or future-related questions

● No product pitches or explanations

● NO SELLING!!!

PAGE 16

K N O W NU N K N O W N S

WHAT ARE YOU LEARNING??

● WHAT problem(s) exist? … WHO has them? … WHY?

● Problem vs. Customer (anchor variable)*

● Gaining customer understanding

○ Facts, pains, goals, behaviors

○ Current problem/solution

● Data → formation of next experiment

PAGE 17

ROLE OF PROTOTYPESAND PILOTS

PAGE 18

K N O W NU N K N O W N S

K N O W NU N K N O W N S

TEST → Product, Customer, Channel

● Those who fail will do so more quickly and cheaply

● Those who are on to something, pivot with time to strike

● Those with traction (measured rigorously) can leverage it BIG

● You bleed a little bit...

○ Major product changes

○ Major customer/market learnings

○ Execution losses

PAGE 19

K N O W NU N K N O W N S

PAGE 20

FINDING PRODUCT-MARKET FITTHROUGH EXPERIMENTS

PAGE 21

K N O W NU N K N O W N S

K N O W NU N K N O W N S

Product-Market fit

● You DEFINITELY are solving a meaningful problem for customers

○ and you UNDERSTAND who those customers are

● You start hearing the same things over and over again

● You actually feel “refinement” (product, execution, growth)

● Helps 100x if you’ve been disciplined

○ You have a barometer to measure against

○ Package that validation + hit the market with force

HYPOTHESIS + ASSUMPTIONSwhat that means

PAGE 23

K N O W NU N K N O W N S

K N O W NU N K N O W N S

Hypothesis Formation

I believe (__specific action__) will result

in (__measurable outcome__)

by (__set date__)

K N O W NU N K N O W N S

Identifying Assumptions

● Implicit → Explicit

● WHY???

○ Assumption #1

○ Assumption #2

● Prioritize by risk

● Design the optimal experiment

EXPERIMENTATION SYSTEMSteam + company building

PAGE 26

K N O W NU N K N O W N S

K N O W NU N K N O W N S

Creating your Experiments Gameplan

WHAT YOU’LL NEED

● Team Buy-In

● Shared vocabulary

● Structure

● Consistency

K N O W NU N K N O W N S

Experiments Need a Home

● Create an “Experiments” Folder

● Store and prioritize backlog of ideas/hypotheses

● Track current experiments

● Tie to core activities

○ Dev sprints // product roadmap // KPI’s

K N O W NU N K N O W N S

Experiments → Business Activities

● Create sprints that work for your teams

○ Daily vs. weekly?

○ Aligned with dev. sprints?

● Share learnings, challenges, feedback

● Hold each other accountable

● Reward validation with action

PACKAGING VALIDATIONtalent, fundraising, growth

PAGE 30

K N O W NU N K N O W N S

K N O W NU N K N O W N S

WHAT IS REAL and WHAT IS NOT

K N O W NU N K N O W N S

Recommended Reads

K N O W NU N K N O W N S

Contact

twitter → @jacksonlindauer

email → jackson@knownunknowns.co

help → sohelpful.me/jacksonlindauer