20121122 lean startup sydney - introduction to customer discovery and lean startup basics

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Brief Introduction to Customer Development Model / Lean Startup Humphrey Laubscher @HumphreyPL [email protected]

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Presentation from a talk I gave at Lean Startup Sydney at Fishburners.

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Page 1: 20121122 Lean Startup Sydney - Introduction to customer discovery and lean startup basics

Brief Introduction to

Customer Development Model / Lean Startup

Humphrey Laubscher

@HumphreyPL

[email protected]

Page 2: 20121122 Lean Startup Sydney - Introduction to customer discovery and lean startup basics

Why are we here? Entrepreneur 21 years , 8 Tech Companies including a workstation, semiconductor, 3d graphics, supercomputer, military intelligence systems supplier, and a video games company. Lecturer U.C. Berkeley, Stanford University, Columbia University, Caltech and the Joint Berkeley/Columbia Executive MBA program

Steven Blank steveblank.com

Page 3: 20121122 Lean Startup Sydney - Introduction to customer discovery and lean startup basics

And more than likely…

Student Steven Blank Stanford Entrepreneurship Class Entrepreneur CTO IMVU – 3D Virtual World Founder Startup Lesson Learned Conference Founder of Lean Startup Author of The Lean Startup

Eric Reis Startuplessonslearned.com

Page 4: 20121122 Lean Startup Sydney - Introduction to customer discovery and lean startup basics

And less likely…

Entrepreneur Founder and CEO – Spark 59 – Startup Software Founder and CEO – WiredReach – File and Media Sharing First Speaker at Startup Lesson Learned Conference Author of Running Lean

Ash Maurya ashmaurya.com

Page 5: 20121122 Lean Startup Sydney - Introduction to customer discovery and lean startup basics

So where to start..

24 Months - $800 Million $5 Billion

Page 6: 20121122 Lean Startup Sydney - Introduction to customer discovery and lean startup basics

What wrong with this picture?

• Where are the customers?

• Focus on First Customer Ship Date

• Emphasis on Execution instead of Learning and Discovery

• Lack of meaningful metrics

• Premature scaling

Page 7: 20121122 Lean Startup Sydney - Introduction to customer discovery and lean startup basics

Greatest Risk for a Startup

• Is not in the development of the new product but in the development of the its customers and markets.

• Startups don’t fail because they lack a product; they fail because they lack customer and a proven financial model.

- Steven Blank

Page 8: 20121122 Lean Startup Sydney - Introduction to customer discovery and lean startup basics
Page 9: 20121122 Lean Startup Sydney - Introduction to customer discovery and lean startup basics

SEARCH EXECUTION The Search for a Business Model

Page 10: 20121122 Lean Startup Sydney - Introduction to customer discovery and lean startup basics

Customer Development Manifesto

• THERE ARE NO FACTS INSIDE YOUR BUILDING, SO GET OUTSIDE

• PAIR CUSTOMER DEVELOPMENT WITH AGILE DEVELOPMENT

• FAILURE IS AN INTEGRAL PART OF THE SEARCH • MAKE CONTINUOUS ITERATION AND PIVOTS • NO BUSINESS PLAN SURVIVES FIRST CONTACT WITH

CUSTOMER SO USE A BUSINESS MODEL CANVAS • DESIGN EXPERIMENTS AND TEST TO VALIDATE YOUR

HYPOTHESIS

Page 11: 20121122 Lean Startup Sydney - Introduction to customer discovery and lean startup basics

Customer Development Experiments

Hypothesis

Design Experiment

Test

Insight

Page 12: 20121122 Lean Startup Sydney - Introduction to customer discovery and lean startup basics

How to get Started with Customer Discovery?

Page 13: 20121122 Lean Startup Sydney - Introduction to customer discovery and lean startup basics
Page 14: 20121122 Lean Startup Sydney - Introduction to customer discovery and lean startup basics

Customer Discovery

Page 15: 20121122 Lean Startup Sydney - Introduction to customer discovery and lean startup basics

Customer Validation

Page 16: 20121122 Lean Startup Sydney - Introduction to customer discovery and lean startup basics

Customer Creation

Page 17: 20121122 Lean Startup Sydney - Introduction to customer discovery and lean startup basics

Lets Focus on Customer Discovery

Page 18: 20121122 Lean Startup Sydney - Introduction to customer discovery and lean startup basics

Example Problem and Exercise:

• Problem:

– Families face difficulties in maintaining the health and nutrition they need in the foods they eat.

• Task: Start with What Matters

– 3 Top Problems

– 3 Top Solutions

– Target Market

Page 19: 20121122 Lean Startup Sydney - Introduction to customer discovery and lean startup basics

Exercise continued..

• Task: Tackle the riskiest part

– Unfair Advantage

– Channels

– Revenue Stream

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Time to Test your Hypothesis through Interviews

• Customer Segments: Who has the pain?

– How to identify early-adopters?

• Problem: What are you solving?

– How do customers rank the top 3 problems?

– What is their pain level: must-have, nice-to-have, don’t-need?

– How do customers solve these problems today?

Page 21: 20121122 Lean Startup Sydney - Introduction to customer discovery and lean startup basics

Interview Script

Page 22: 20121122 Lean Startup Sydney - Introduction to customer discovery and lean startup basics

Example Problem and Exercise:

• Write out a list of interview questions using your Lean Canvas that allows you to:

– Confirm your Target Market

– Helps you confirm and rate your problems in order of importance by the customers from #1 to #3

– Rate your solutions in order of important by asking if they are “Nice to Haves” or “Must Haves”

– Also ask the magic wand question.

Page 23: 20121122 Lean Startup Sydney - Introduction to customer discovery and lean startup basics

Track your Results

Page 24: 20121122 Lean Startup Sydney - Introduction to customer discovery and lean startup basics

Time to Get out of the Building!

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Page 26: 20121122 Lean Startup Sydney - Introduction to customer discovery and lean startup basics

Any Questions?

Humphrey Laubscher

@HumphreyPL

[email protected]

Page 27: 20121122 Lean Startup Sydney - Introduction to customer discovery and lean startup basics

Problem Top 3 Problems:

Unique Value Propositions Single, clear, compelling message that states why you are different and worth buying

Customer Segments Target Customers

Unfair Advantage Can't be easily copied or bought.

Channels Path to Customers

Solution Top 3 Features:

Key Metrics Key Activities you measure

Cost Structure Customer Acquisition Costs Distribution Costs Hosting People

Revenue Streams Revenue Model Lifetime value Revenue Gross Margin

Business Model Generation: Date: / /