lean 101
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My lean 101 slides. Please share!TRANSCRIPT
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About Me
Rafael Balbi On twitter @rafaelbalbijr
• Lean Startup Machine Director of Operations
• Helped a VC raised 5MM USD
• Skillshare Master Teacher on Lean // Business Models
• Founder of not 1 but 2 failed startups
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200 WORKSHOPS IN 2013
New York
Boston
Chicago
Austin
Philadelphia
Los Angeles
Washington DC
San Francisco
San Diego
Toronto
Montreal
Tokyo
Shanghai
Karachi
Lahore
Dubai
Moscow
Tel Aviv
Milan
Amsterdam
Riyadh
Sao Paolo
London
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Making Sh* Happen
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Funded Startups
Instacanvas
Borrowmydog.gy
Branch.com
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LET’SADVANCE THE SCIENCE OF ENTREPRENEURSHIP
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Let’s break some ice
About Me//About You
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The Abyss
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Lean
I will code
I will get funding,
I will write a business plan
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Don’t be a super hero
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There’s an easier way
A Startup, is a human institution designed to create and build new products and services under conditions of extreme uncertainty…
– Eric Ries
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Lean is about...
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Experiment - An operation or procedure carried out in
order to discover and test
Planning - A detailed proposal for doing or achieving something.
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Experimenting vs Planning
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What is “waste” in a startup?
• Building the wrong thing
• Pre-mature optimization
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Successful startups pivot
• YouTube, Facebook, PayPal
• Twitter, Instagram
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Make data-driven decisions
• Increase team transparency
• Move faster
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Build//Measure//Learn
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Some Context
What are the most important costs inherent in our business model? Which Key Resources are most expensive? Which Key Activities are most expensive?
Through which Channels do our Customer Segments want to be reached? How are we reaching them now?How are our Channels integrated? Which ones work best?Which ones are most cost-efficient? How are we integrating them with customer routines?
For what value are our customers really willing to pay?For what do they currently pay? How are they currently paying? How would they prefer to pay? How much does each Revenue Stream contribute to overall revenues?
For whom are we creating value?Who are our most important customers?
What type of relationship does each of our CustomerSegments expect us to establish and maintain with them?Which ones have we established? How are they integrated with the rest of our business model?How costly are they?
What value do we deliver to the customer?Which one of our customer’s problems are we helping to solve? What bundles of products and services are we offering to each Customer Segment?Which customer needs are we satisfying?
What Key Activities do our Value Propositions require?Our Distribution Channels? Customer Relationships?Revenue streams?
Who are our Key Partners? Who are our key suppliers?Which Key Resources are we acquiring from partners?Which Key Activities do partners perform?
What Key Resources do our Value Propositions require?Our Distribution Channels? Customer Relationships?Revenue Streams?
Day Month Year
No.
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What a VC taught me..
Concept Phase Execution Phase
Value Prop//Customer Segment//
//Management//Systems
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Lean Business Models
Get to your first sale as quickly as possible!
Break it! -> Push
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Build//Hypothesize
• What’s your idea/problem that you want to solve?
• Customer?
•
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Measure//Test
Customer Development - Get out of the building
Putting what we’ve built in front of people
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Learn//Iterate
Gain Knowledge
Implement
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Build//Measure//Learn
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• The minimal amount of effort you have to exert to complete one turn around the Build-Measure-Learn loop. - Eric Ries
• MVP ≠ functioning product
MVP
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• MVP = Minimal Viable Experiment
MVP
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Goals of MVP
Maximize Learning
Minimize opportunity cost
Rapid Testing + Iteration
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Types of MVP
Exploration
Pitch
Concierge
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An interaction with customers problems to understand behavior
Exploration
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PitchWorking towards a soluCon
Pitching the customer on a soluCon with the intent of gaining back some form of validaCon (email signup, cash, leGer of intent)
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Pitch
1. Decreasing Discount
2. Meta
3. Innovator
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Concierge
Manually delivering on the soluCon
Minimal code, pulling+pushing levers
No automaCon
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Concierge
1. One use case
2. Real life simulaCon
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Customer Development
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Customer Development is the process by which we go out and test our
hypothesis and assumptions
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Customer Development…
1. Sucks…it hurts, a lot
2. Is the cornerstone and key of LEAN
3. Lot’s of Cust Dev Leads to Results
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Look for a Pattern
When is enough, enough?
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CUSTOMER
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Persona Development Project Name: Team Leader Name: Experiment #:
PersonFactual information about your target customer.
BehaviorExisting behavior they exhibit now, because they don’t have your solution.
PainState the problem you believe your target customers have, that your solution solves for.
GoalsWhat goals are they trying to accomplish through the behavior, that your solution will do better?
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“No business plan survives first contact with customers.”
- Steve Blank
Get Out of the Building
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• Uncovers how users think and behave
• Validates assumptions/removes bias
• Shows difference between intent and reality
• Provides direction and data instead of opinion or speculation
• Provides the ability to inform design
What’s the point?
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It is NOT
• Multiple Choice Surveys
• Focus Groups
• Your Personal (Biased!) Experience
• Conversations with Friends
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Effective Interviewing
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Go in with 2 to 3 objectives and have a real conversation.
Brant Cooper
Know your goals and questions. Giff Constable
Use a script. Ash Maurya
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No Selling Allowed
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3 Point Interview
1. Do You {insert problem}
2. Tell me a story about the last Cme you dealt with {insert problem}
3. What’s your ideal soluCon for {insert problem}
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Track Data
• Write everything down RIGHT after
• Set up time to evaluate data
• Have one location where everything is stored
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Validation Board
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“A startup’s runway is the number of pivots it can still make.”
-Eric Ries
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GOAL: Decrease Cash Spent Between Pivots
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PRODUCT =EXPERIMENT
GOAL: Decrease Cash Spent Between Pivots
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PROGRESS = VALIDATED LEARNING
PRODUCT =EXPERIMENT
GOAL: Decrease Cash Spent Between Pivots
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Ok...so?
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VC’s invest to get a return on $$$-‐want $ back w/ i*
Raise skillset...lessen risk...raise probability of funding
What a VC taught me...
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Business Models
Concept Phase Execution Phase
Value Prop//Customer Segment//
//Management//Systems
want to get out of concept phase as quickly as possible. business become profitable at SCALE
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Ok...so?
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3D prinMng -‐ will do to hardware what the internet did to soNware
Singularity RoboMcsNanotech
Africa/China/Brasil/India
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leanstartupmachine.com
@rafaelbalbijr
validaMonboard.com
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