Lean Startup - Marcus Whitney
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16-Sep-2014 -
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Transcript of Lean Startup - Marcus Whitney
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