LEAP LEAN ENTREPRENEUR ACCELERATOR PROGRAM. Welcome Topics: Lean Startup Overview Make Your Idea...

LEAPLEAN ENTREPRENEUR ACCELERATOR

PROGRAM

Welcome

Topics: Lean Startup OverviewMake Your Idea TangibleLean ExperimentsDecisions – The Art of the Pivot

Copyright © 2013 Moves the Needle LLC All Rights Reserved

Agenda Day 18:00 – 8:30 Breakfast – Let’s Eat!8:30 – 9:00 Intro to Lean Startup9:00 – 9:30 Enterprise Innovation Spectrum9:30 – 11:00 Doing it – LEAP Loop #1 Exercise11:00 – 11:30 Create Your Experiment11:30 – 2:30 Get Outside – run your experiment!2:30 – 3:00 Close the Loop3:00 – 3:30 Building Your Case3:30 – 5:00 LEAP Loop #25:00 + Optional work time (we’ll stay as late as needed)


What is LEAP?Goal: Learn and apply lean startup principles by doing, so you never go back to the old way.

What to expect: - Get outside your comfort zone- The need for speed – we’ll go fast!- We’re here to help, don’t hesitate to ask- Have fun!


How will you do it?


Ready to LEAP in?


What is “Lean”?Elimination of waste in the production and delivery of value to the customer…


What is a Startup?

“A startup is an temporary organization formed to search for a repeatable and scalable business

model.” – Steve Blank

“A human institution designed to create new products and services

under conditions of extreme uncertainty.” – Eric Ries


What is “Lean Startup”?Elimination of waste in searching for a scalable business model, or significant business impact.

Goal for lean startups: Learning!

Lean Startup Myths• Lean = cheap or poor quality• Only for high tech (hint: it works in large

orgs too)• Replaces vision with customer demandsCopyright © 2013 Moves the Needle LLC All Rights Reserved

Innovation Spectrum


How do we search?Begin with an educated guess- OK to begin without the answers, you’re probably wrong

anyway.

Change guesses into facts using experiments- Measure behavior, test hypotheses, capture surprises- Make decisions based on the results of your experiments

Move through the loop quickly- Build the absolute minimum required to test your

assumptions- Build your case one experiment at a time- Get moving – NOW! (rinse and repeat forever)


Source: Eric Ries, The Lean Startup

Lean Experimentation

Rigor Inspiration

Rapid Experimentation Continuum

Sustaining Innovations

BreakthroughInnovations

(disruptive)

No Experience(unknown)

Experienced(known)

OptimizeLow Risk - few unknowns

SearchHigh Risk - many

unknowns

MeasureFocus on the key metrics that matter – ignore vanity metrics.

- Measure important customer behavior- Willingness to exchange “currency” (time,

attention, $$$)- What activities must we do to deliver customer

value- Something else unique to your idea?

Use metrics to eliminate gap between “say vs. do”, focus on metrics involving “do”.


Lie Witness NewsWhy don’t we just ask customers if they will use our product?

http://www.youtube.com/watch?v=Vp4SnmOxP0U




Learn and DecideThe output from lean experimentation is new knowledge and insights about your customer or business model.

• Build a case over time, using multiple experiments

• Experiments to learn, not just validate.• Savor the surprises! • Is your confidence increasing or decreasing?• Why, why, why?


Let’s Get Loopy!The Lean Startup Loop

Exercise – Run the Loop0:05 – Review and post your idea (customer + problem + solution)

0:15 - Brainstorm your riskiest assumptions0:10 – Narrow to your top 3 assumptions0:05 – Document your Leap of Faith Assumption

0:10 – Brainstorm hypotheses0:05 – Document a single hypothesis

0:15 - Brainstorm experiments to test hypothesis0:10 – Narrow to a single experiment0:05 - Document your experiment

– Build and run your experiment outside with real customers0:15 – Learn as a team – close the loop


Exercise 1Make Your Idea Tangible

Document Your Idea (:05)Tangible, measurable solution to a specific customer problem or pain – be specific!

Task: Post 3 sticky notes on your posterCustomer: Who is experiencing the problem.Problem: What is the customer’s problem Solution: Your proposed solution to the problem


What are Assumptions?

“Something taken for granted or accepted as true without proof”

Opinions vs. Facts

(Hint: What you think is fact, is likely an assumption)


Exercise 2Leap of Faith Assumption

Brainstorm Assumptions (:10)• What customer behaviors must take place

for your solution to be adopted?• What assumptions are you taking for

granted as fact?• What keeps you up at night?

Task: Write down as many assumptions as possible as a team, one assumption per sticky note.


Narrow Assumptions (:10)• What is the biggest assumption that if false,

will cause you product to fail?• What is most unknown, where do gaps exist?• Focus on customer behavior related

assumptions

(ex: Sports cars lovers will drive an electric car)

Task: Narrow your assumptions using the LEAN Loop poster 2x2 grid.


Post Your Leap of Faith (:05)This is the riskiest assumption for your business idea.

“If this is not true, we’re out of business”

(ex: Sports cars lovers want an electric car)

Task: Place a single sticky note of your riskiest, LOF assumption on your poster.


Exercise 3Hypothesis

If we do X, Y% of people will behave in way Z

X= Your solution (the carrot)Y% = Your target metric (the number)Z = The customers’ behavior (the

hoop)

Create Hypothesis (:05)

If we do X, Y% of people will behave in way Z

Task: Write down your hypothesis on a sticky note, and place on your poster.


Pitch (:01)

Customer + Problem + Solution + LOF


Exercise 4Lean Experiments

Why Lean Experiments?Reduce the risk associated with resource investment, move faster with more certainty.

• Change opinions into facts• Inform our decisions with data and customer insights• Separate customer words from behavior – say vs. do!

Output = Insights + Data(what did I learn from the customer + what

behavior did I measure)Copyright © 2013 Moves the Needle LLC All Rights Reserved

Brainstorm Experiments (:15)

• Will his experiment will test your hypotheses?• Measure real behavior (or as close to it as possible)• Can you get an answer quickly!• Capture surprises as well as data

Important: Use behavior + “currency exchange” to eliminate say vs. do – NO SURVEYS – KEEP IT HUMAN

(currency = time, money, attention, personal info, usage)

Task: Brainstorm at least 3 different experiment methods listed your survival guide.


Choose 1 Experiment (:10)

• Can you get your answers quickly?• How will you measure behavior?• How will you interact in person with your target

customer?

Did we mention:NO SURVEYS + KEEP IT HUMAN

Task: Select the best experiment to run first (use 2x2 for help)


Document Experiment (:05)Task: On your poster, complete a sticky note for each of the following:- Describe the experiment- What specific behavior will you measure?- What currency will you collect?- Minimum success criteria (ex: 50% sign-up)

NO SURVEYS!KEEP IT HUMAN!


Go! (2:45)Run your experiment in the wild- Don’t tell people this is an experiment- Collect contact info so you can follow-up

later- Ask why or why not – look for surprises!- Stay out of jail…

Return by 2:15pm


Learn and DecideClosing the Loop

What are you looking for?A strong behavioral response from your target customer, confirming or denying your hypothesis.- Did your numeric hypothesis pass or fail?- Do you know why or why not?- What surprised you?

Ex: 50% of small business signed up for our online beta program, providing their email and contact info.


Output = LearningWhat insights did you encounter which change the way you think about your customer..?

How painful is the problem? Does it exist at all? - Vitamin > Medicine > Addictive Drug

Are they trying to solve it today?- What process, if any, are they taking to solve their

problem

What were your biggest surprises?Copyright © 2013 Moves the Needle LLC All Rights Reserved

The Art of the PivotA significant change in direction based on new customer insights, where the vision remains the same.

Idea: App to help diabetics maintain healthy eating habits.

Insight: “Diabetic caregivers often care more than patients about maintaining healthy habits”

Pivot to: App for diabetic caregivers instead of diabetics


Close the Loop (:15)Based on what you learned, Is your Leap of Faith true or false..? Why or why not?

If true – Persevere!- Move on to next leap of faith, repeat loop process- Push to be more aggressive for next experiment

If false – Pivot!- Change one or more components of your Idea, Repeat loop

process - Important: leverage insights gathered during your experiment!

Document updates on your poster and canvas - Create new sticky notes and place them on top of existing

notes Copyright © 2013 Moves the Needle LLC All Rights Reserved

Pitch 2 (:03)

Customer + Problem + Solution + LOF + Experiment + Decision


Let’s Get Loopy Again!Rinse and Repeat –

Forever!

Loop to the Start, Begin Again

• Review/update your vision and idea• Pick your next Leap of Faith assumption to

test• Create a new hypothesis for next experiment• Create the next experiment to test your next

hypothesis• Run your next experiment with real

customers!

Task: As a team, run through the steps of your poster, asking for mentor help if needed.


Digital ExperimentsRun a digital experiment overnight• Unbounce.com• Bit.ly• Wufoo.com• MailChimp.com• Godaddy.com• Craigslist.com• Facebook Ads• Google AdWords


Congrats!You Survived Day 1

Agenda Day 28:00 – 8:30 Welcome back check-in9:30 – 10:00 Breaking frame10:00 – 10:30 Pitch Updates (tell your story)~11:00 – 2:00 Go outside! Experiment #12:00 – 3:00 Closing the loop 3:00 – 4:00 Breaking frame4:00 – 4:30 Experiment plan #2 4:30 – 5:00 Operationalize LEAP (now what?)


Day 1 - ReflectionsWhat did you feel and observe?

How is this process different than your current way of working?

Are we uncovering game-changing ideas for our customers?


Judge the Search…Teams are just as important as ideas- Teams must demonstrate the ability to “search”, in addition

to their idea’s viability. No team gets it right the first time.

Real customer behavior trumps opinion- Teams must demonstrate the ability to generate data from

customers using behavioral experiments.

Evidence builds in small increments over time- Teams must move through multiple experiments loops in

small increments, in order to increase confidence over time.

Judge the Business Model

Identify a specific customer- Teams must demonstrate understanding of their specific

customer segment, and insights related to the customer’s desired outcomes.

Deliver value to the customer- Teams must demonstrate their proposed solution is

delivering value to their target customer, via currency exchange (time, attention, dollars)

Generate positive business impact- Teams must demonstrate Intuit can extract value for

shareholders (and employees as well)

Before we Begin, Review…• Review/update your vision and idea• Pick your next Leap of Faith assumption to

test• Create a new hypothesis for next experiment• Create experiment(s) to test your next

hypothesis• Run your next experiment with real

customers!

Task: As a team, run through the steps of your poster, asking for mentor help if needed.


Pitch – (:03)

Tell Your Story

Vision + Customer + Problem + Solution + LOF + Experiment 1


What are you looking for?A strong behavioral response from your target customer, confirming or denying your hypothesis.- Do you know why or why not?

How painful is the problem? Does it exist at all? - Vitamin > Medicine > Addictive Drug

Are they trying to solve it today?- What process, if any, are they taking to solve

their problem


Example – LEAP• Vision: Create entrepreneurs inside corporations• Idea: A 2-day “lean competition” for entrepreneurs at big

companies– Customer Segment: Internal entrepreneurs at corporations– Customer Problem: I don’t know how to move my new idea forward– Value Proposition: Jumpstart your idea while learning lean startup

principles– Revenue Model: Fee to attend

• Leap of Faith: If we conduct a startup competition, entrepreneurial-minded employees will attend and make rapid progress on their ideas

• Hypothesis: At least 3 teams will attend an event, and at least 1 team will validate their business idea with real customers.

• Experiment: Conduct a LEAP competition in San Diego• Metrics/Currency: Number of entrepreneurs who attend, idea

success, currency is willingness to spend time spent away from day job.


Let’s get Loopy - Again!Repeat until your business is validated (or

not)


Final LoopDid you get a strong behavioral response from your target customers?- Did your numeric hypothesis pass or fail?- Do you know why or why not?- What surprised you?

What is your decision as of right now?- How confident are you in this decision?


Pitch 3 – Final (:05)

Tell Your Story

Vision + Customer + Problem + Solution + LOF + Experiment 1, 2, 3 + Final Decision


Next Steps• Try it – Don’t wait for permission to run

experiments• Start small, think big• Set aside specific time for experiments• Help each other – you’re in the club• Include leaders in the process


Business Model Canvas

Business Model Canvas

1 1

2

Start with Customer, then BusinessUse learning from customers to inform how to create business

1 1

2

3

3

5

5

6

4 CUSTOMERBUSINESS

Vision: Create Intrepreneurs…

Jumpstart your idea quickly….

Lean lean startup principles…

Find out if customers like your idea…

Have fun!

Intrepreneurs

Product Teams

Academies

(GMs, pipeline owners, shareholders)

Fees to attend

% of New ideas in market

Word of Mouth

Event + follow-up support from the community.

LEAP MentorsLEAP Content

Conduct eventsFollow-up coaching

Corporations

Conferences

Lean Startup community (Eric)

Per-event: Facilities, facilitators(~$6,000 est.)

IDEA: 48 hour startup competition for corporate intrepreneurs


Jumpstart your idea quickly….

Lean lean startup principles…

Find out if customers like your idea…

Have fun!

Intrepreneurs

Product Teams

Academies

(GMs, pipeline owners, shareholders)

Fees to attend

% of New ideas in market

Word of Mouth

Event + follow-up support from the community.

LEAP MentorsLEAP Content

Conduct eventsFollow-up coaching

BUsLean Startup community (Eric)

Per-event model(~$6,000) + employee time

IDEA: 48 hour startup competition for internal entrepreneurs

Vision: Create Entrepreneurs…


Thanks!

Now go do it!

LEAP LEAN ENTREPRENEUR ACCELERATOR PROGRAM. Welcome Topics: Lean Startup Overview Make Your Idea...

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