lean 101
TRANSCRIPT
Lean 101@rafaelbalbijr//[email protected]
Thursday, January 31, 13
Thursday, January 31, 13
About Me
Rafael Balbi On twitter @rafaelbalbijr
• Lean Startup Machine Director of Operations
• Helped a VC raise 5MM USD
• Skillshare Master Teacher on Lean // Business Models
• Founder of not 1 but 2 failed startups
Thursday, January 31, 13
Singapore
Thursday, January 31, 13
Santiago
Thursday, January 31, 13
Sao Paulo
Thursday, January 31, 13
Beijing New York
San Fran
Sydney
London
Thursday, January 31, 13
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
Thursday, January 31, 13
Making Sh* Happen
Thursday, January 31, 13
Funded Startups
Instacanvas
Borrowmydog.gy
Branch.com
Thursday, January 31, 13
LET’SADVANCE THE SCIENCE OF ENTREPRENEURSHIP
Thursday, January 31, 13
Let’s break some ice
About Me//About You
Thursday, January 31, 13
The Abyss
Thursday, January 31, 13
Lean
I will code
I will get funding,
I will write a business plan
Thursday, January 31, 13
Don’t be a super hero
Thursday, January 31, 13
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
Thursday, January 31, 13
Lean is about...
Thursday, January 31, 13
Experiment - An operation or procedure carried out in
order to discover and test
Planning - A detailed proposal for doing or achieving something.
Thursday, January 31, 13
Experimenting vs Planning
Thursday, January 31, 13
Thursday, January 31, 13
What is “waste” in a startup?
• Building the wrong thing
• Pre-mature optimization
Thursday, January 31, 13
Successful startups pivot
• YouTube, Facebook, PayPal
• Twitter, Instagram
Thursday, January 31, 13
Make data-driven decisions
• Increase team transparency
• Move faster
Thursday, January 31, 13
Build//Measure//Learn
Thursday, January 31, 13
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.
This work is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported License. To view a copy of this license, visit http://creativecommons.org/licenses/by-sa/3.0/
or send a letter to Creative Commons, 171 Second Street, Suite 300, San Francisco, California, 94105, USA.
Thursday, January 31, 13
What a VC taught me..
Concept Phase Execution Phase
Value Prop//Customer Segment//
//Management//Systems
Thursday, January 31, 13
Lean Business Models
Get to your first sale as quickly as possible!
Break it! -> Push
Thursday, January 31, 13
Build//Hypothesize• What’s your idea/
problem that you want to solve?
• Customer?
•
Thursday, January 31, 13
Measure//Test
Customer Development - Get out of the building
Putting what we’ve built in front of people
Thursday, January 31, 13
Learn//Iterate
Gain Knowledge
Implement
Thursday, January 31, 13
Build//Measure//Learn
Thursday, January 31, 13
• 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
Thursday, January 31, 13
• MVP = Minimal Viable Experiment
MVP
Thursday, January 31, 13
Goals of MVP
Maximize Learning
Minimize opportunity cost
Rapid Testing + Iteration
Thursday, January 31, 13
Types of MVP
Exploration
Pitch
Concierge
Thursday, January 31, 13
Thursday, January 31, 13
An interaction with customers problems to understand behavior
Exploration
Thursday, January 31, 13
PitchWorking towards a solution
Pitching the customer on a solution with the intent of gaining back some form of validation (email signup, cash, letter of intent)
Thursday, January 31, 13
Pitch
1. Decreasing Discount
2. Meta
3. Innovator
Thursday, January 31, 13
Thursday, January 31, 13
Thursday, January 31, 13
Concierge
Manually delivering on the solution
Minimal code, pulling+pushing levers
No automation
Thursday, January 31, 13
Concierge
1. One use case
2. Real life simulation
Thursday, January 31, 13
Customer Development
Thursday, January 31, 13
Customer Development is the process by which we go out and test our
hypothesis and assumptions
Thursday, January 31, 13
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
Thursday, January 31, 13
Look for a Pattern
When is enough, enough?
Thursday, January 31, 13
CUSTOMER
Thursday, January 31, 13
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?
Thursday, January 31, 13
“No business plan survives first contact with customers.”
- Steve Blank
Get Out of the Building
Thursday, January 31, 13
• 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?
Thursday, January 31, 13
It is NOT
• Multiple Choice Surveys
• Focus Groups
• Your Personal (Biased!) Experience
• Conversations with Friends
Thursday, January 31, 13
Effective Interviewing
Thursday, January 31, 13
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
Thursday, January 31, 13
No Selling Allowed
Thursday, January 31, 13
3 Point Interview
1. Do You {insert problem}2. Tell me a story about the last time you dealt with {insert problem}3. What’s your ideal solution for {insert problem}
Thursday, January 31, 13
Track Data• Write everything down RIGHT after
• Set up time to evaluate data
• Have one location where everything is stored
Thursday, January 31, 13
Validation Board
Thursday, January 31, 13
Thursday, January 31, 13
Thursday, January 31, 13
“A startup’s runway is the number of pivots it can still make.”
-Eric Ries
Thursday, January 31, 13
GOAL: Decrease Cash Spent Between Pivots
Thursday, January 31, 13
PRODUCT =EXPERIMENT
GOAL: Decrease Cash Spent Between Pivots
Thursday, January 31, 13
PROGRESS = VALIDATED LEARNING
PRODUCT =EXPERIMENT
GOAL: Decrease Cash Spent Between Pivots
Thursday, January 31, 13
Ok...so?
Thursday, January 31, 13
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...
Thursday, January 31, 13
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
Thursday, January 31, 13
Ok...so?
Thursday, January 31, 13
3D printing - will do to hardware what the internet did to software
Singularity RoboticsNanotech
Africa/China/Brasil/India
Thursday, January 31, 13
leanstartupmachine.com
@rafaelbalbijr
validationboard.com
Thursday, January 31, 13