Lean startup workshop

Implemen'ng Lean Startup Twi$er:@ChetanChawla

MBA, Ph.D. North Central College

Email: [email protected]

2016 Ideas to Profits – Entrepreneurship & Small Business Conference May 21, 2016 – Wentz Concert Hall

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Supply Push or Demand Pull?

h;ps://marketoonist.com/2013/04/target-‐market-‐2.html

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Why Do Startups Fail? (CB insights)

•  No market need: 42 % •  Ran out of cash: 29 % •  Not the right team: 23 % •  Got outcompeted: 19 % •  Pricing/cost issues: 18 % h;ps://www.cbinsights.com/blog/startup-‐failure-‐post-‐mortem/ h;ps://www.cbinsights.com/blog/startup-‐failure-‐reasons-‐top/

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Lean Startup

•  Based on book by Eric Ries •  Goal: “make what people want.” -‐  Paul Graham

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Key Principles

1.  Entrepreneurs are everywhere 2.  Entrepreneurship is management 3.  Validated learning 4.  Innova'on accoun'ng 5.  Build – Measure – Learn

h;p://theleanstartup.com/principles

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Entrepreneurs Are Everywhere

•  Startups create value under condi'ons of uncertainty

•  i.e. ①  Not specific to industry/sector ②  May focus on “social value” crea'on ③  Face uncertainty ④  Startup = Experiment = Hypothesis* tes'ng * A testable statement/proposi'on.

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#1 Entrepren

eurs A

re Everywhe

re

Entrepreneurship is Management

① Incorporate “science” into management of uncertainty

② Goal: create systems/ins'tu'ons, not just a product/service

③ Need adaptability due to condi'ons of extreme uncertainty

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#2 Entrepren

eurship is Managem

ent

Validated Learning ① Goal: proving the viability of the company’s

business model, what investors call “trac'on.” ② Measure of progress = validated learning about

customers. ③ Valida'on = data that demonstrates that the key

risks in the business have been addressed by the current product.

④ Anything that doesn’t help you learn what customers want è Waste.

h;p://www.startuplessonslearned.com/2009/04/validated-‐learning-‐about-‐customers.html

#3 Validated

Learning

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Innova'on Accoun'ng

① MVP = Minimum Viable Product è test how customers behave now

② Experiment to test if value created can be increased

③ Pivot or Persevere

#4 Inno

va'o

n Accoun

'ng

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Build-‐Measure-‐Learn

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#5 Build-‐M

easure-‐Learn

The Pivot

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#5 Build-‐M

easure-‐Learn

Pivot

•  Build – Measure – Learn •  Choice: Persevere OR Pivot •  If your hypothesis (e.g. x customers value our y product) is wrong è pivot

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#5 Build-‐M

easure-‐Learn

Pivot – must be jus'fied

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#5 Build-‐M

easure-‐Learn

Goal = Fast Learning

Reduce 'me between pivots

Get to Product-‐Market fit

fast

Before you run out of $

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To Avoid

•  Achieving Failure

= Successfully (on 'me/budget) building product/service that no one wants

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First Step

•  Business Model Canvas •  Describe, Challenge, Test Key Assump'ons.

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Business Model Canvas = Key Drivers •  Customer Segments: Who are the customers? What do they think? See?

Feel? Do? •  Value ProposiMons: What’s compelling about the proposi'on? Why do

customers buy, use? •  Channels: How are these proposi'ons promoted, sold and delivered?

Why? Is it working? •  Customer RelaMonships: How do you interact with the customer through

their ‘journey’? •  Revenue Streams: How does the business earn revenue from the value

proposi'ons? •  Key AcMviMes: What uniquely strategic things does the business do to

deliver its proposi'on? •  Key Resources: What unique strategic assets must the business have to

compete? •  Key Partnerships: What can the company not do so it can focus on its Key

Ac'vi'es? •  Cost Structure: What are the business’ major cost drivers? How are they

linked to revenue?

h;p://www.alexandercowan.com/business-‐model-‐canvas-‐templates/

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Learning without MVP (Minimum Viable Product)

•  Do MVE (Minimum Viable Experiments) •  How? 1)  Customer interviews 2)  Landing Page Tests 3)  Undercover compe'tor studies 4)  Concierge/ Wizard of Oz (e.g. Zappos) 5)  Prototypes 6)  A/B tests

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Exercise: For Your Venture

I.  Fill out the Lean/ Business Model Canvas for your business.

II.  Assump'on/hypotheses tes'ng: •  What are our assump'ons? •  What is the riskiest assump'on? •  How can we validate/ invalidate the riskiest assump'on quickly?

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Business Model Canvas = Key Drivers •  Customer Segments: Who are the customers? What do they think? See?

Feel? Do? •  Value ProposiMons: What’s compelling about the proposi'on? Why do

customers buy, use? •  Channels: How are these proposi'ons promoted, sold and delivered?

Why? Is it working? •  Customer RelaMonships: How do you interact with the customer through

their ‘journey’? •  Revenue Streams: How does the business earn revenue from the value

proposi'ons? •  Key AcMviMes: What uniquely strategic things does the business do to

deliver its proposi'on? •  Key Resources: What unique strategic assets must the business have to

compete? •  Key Partnerships: What can the company not do so it can focus on its Key

Ac'vi'es? •  Cost Structure: What are the business’ major cost drivers? How are they

linked to revenue?

h;p://www.alexandercowan.com/business-‐model-‐canvas-‐templates/

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Sources

•  Eric Ries’: 1.  Presenta'ons

h;p://www.slideshare.net/startuplessonslearned/2011-‐10-‐12-‐eric-‐ries-‐lean-‐startup-‐web-‐20-‐expo-‐ny-‐keynote

2.  Website: h;p://theleanstartup.com/

•  Steve Blank 1.  Why the Lean Startup Changes Everything:

h;ps://hbr.org/2013/05/why-‐the-‐lean-‐start-‐up-‐changes-‐everything 2.  Website: h;ps://steveblank.com/

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Lean startup workshop

Small Business & Entrepreneurship

Transcript of Lean startup workshop