lean methodology
TRANSCRIPT
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1Identification
2 Evaluation
3Initiation
4 Progress
5Persistence
6 Success
The Entrepreneurial Process
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Typical Questions1
Identification
• I know this technology, I find these things happening in the environment, I think can do it• What all could I build?• Do I have the means to do it?
Evaluation
• Is there a need for something that I would like to build? Technology?• Family support? Financial Considerations? • Impact of action? Self awareness
2
Initiation
• What is the MVP I could build?• Who are the people I could meet to get a good assessment of the product/service
3
Progress
• What feedback should I incorporate? What should I discard?• What markets would be attractive to pursue? What features should I project?
4
Persistence
• Should I pursue or pivot? • What do the metrics tell me?5
Success
• Scaling issues!6
The Golden Circle
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What
How
Why
Traditional Business Approach
Suggested Business Approach
Understanding the root of the issue we decide to work on is essential
Before we start!
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What
How
Why
Produc
t
Strategy
VisionLong term
Failure is not for the entrepreneur, its only for these stages!
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MARKETPRODUCT
Your product is NOT “the product” Your “Business Model” is the productRemember
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FOR START-UPSTHE CHALLENGE IS....
ITERATE FROM PLAN A TO A PLAN THAT WORKS-before you run out of resources...
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Vision
ProductStrategy
Vision
Strategy: Employed by the start up to achieve its vision & includes – business model, product road map, partners, competitors, who is a customer etc.Change in Strategy is a Pivot
Product: Is the end result of the strategyChange in Product is Optimization
Vision: The true north! The destination the start up intends to reachEntrepreneurs are committed to seeing what the start up to its destination
A startup is a human institution designed to create a new product or service under conditions of extreme uncertainty
5 Principles of Lean Startup Method1. Entrepreneurs are everywhere2. Entrepreneurship is manageme
nt3. Validated Learning4. Build-Measure-Learn5. Innovation Accounting
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Steer• Startup is a catalyst that transforms ideas into products• As customers interact with the products they generate feedback and data •Feedback Loop - Build Measure Learn1.Identify the hypothesis to test – leap of faith assumptions2.Build the MVP – version that enables a full turn of the BML loop3.Measure: Is the product development effort leading to real progress –
1. Innovation Accounting2. Learning Milestones
01 IDEA !
02 HYPOTHESIS
03 EXPERIMENTAL DESIGN
04 EXPERIMENTATION
05 PIVOT OR PERSEVERE?
6.b PERSEVEREExperiment proves hypothesis
6.a PIVOTExperiments disprove hypothesis
MetricsVanity
Actionable
Pivot?
Accelerate
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Batch
The power of small Batches- Equivalent of the andon card- Continuous deployment-Feedback on design decisions almost instantaneous-Large batches could initiate death spirals for the organization!- pull instead of push (learn-measure-build)!
Growth
New customers come from the action of past customers.Growth Through- word of mouth- aside effect of product usage- funded advertisement- repeat purchase or use
3 engines of growth1.Sticky engine2.Viral 3.Paid
Adapt
The 5 why approach1.Be tolerant to all mistakes the first time2.Never allow the same mistake to be made twice
Innovate
Structure - • Scarce but secure resources• Independent development authority • Personal stake in the outcome• Innovation sandbox• Internal teams accountableWatch out - • Protect from the parent organization • Rational fears• Hiding innovation inside the black box
PeopleCulture
Process
Accountability
The Startup
Way
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Identify the Riskiest Parts of your businessBuilding a successful product is fundamentally about risk mitigation
For most parts, the solution is not what’s riskiest!
Problem/Solution Fit1 Key Question: Do I have a problem worth solving?
• Is it something customers want? (must-have)• Will they pay for it? If not, who will? (viable)• Can it be solved? (feasible
Product/Market Fit2
Key Question: Have I built something people want?
Scale3
Key Question: How do I accelerate growth?
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The Process01 IDEA !
02 HYPOTHESIS
03 EXPERIMENTAL DESIGN
04 EXPERIMENTATION
05 PIVOT OR PERSEVERE?
6.b PERSEVERE
Do I have real evidence from my buyer that this is compelling?
What are the key assumptions required to make this business work?
How do I definitely prove or disprove the assumption with minimum time or effort?Am I reacting or am I focused on validating my pivotal assumptions?
Pivot or Persevere
Experiment proves hypothesis
6.a PIVOTExperiments disprove hypothesis
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The Iteration Meta-Pattern
Understanding Problem
Defining Solution
Validating Qualitatively
Verifying Quantitativel
y
Problem Solution Fit Product Market Fit
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Pivoting - Optimize
© Sachidananda
Focus:
Experiments:
GrowthOptimizations
Focus:
Experiments:
Validated LearningPivots
Finding a plan that works Accelerating that planValidate Refine
Course Correction Efficiency
Your Goal:
Investor’s Goal:
GrowthGrowth
Your Goal:
Investor’s Goal:
LearningGrowth
Pick bold outcomes instead of chasing incremental
improvements
Ideal time to raise funding
Problem/Solution Fit Product/Market Fit Scale
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The Key Metrics
Acquisition
Activation
Retention
Revenue
Referral
How do users find you?
Do users have a great first experience?
Do users come back ?
How do you make money?
Do users tell others?
Systematically testing your plan
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Idea
BUILD
Product
MEASURE
Data
LEARN
Minimize TOTAL time
through the loop
Build Faster
Unit TestsUsability Tests
Continuous IntegrationIncremental Deployment
Free & Open-SourceCloud Computing
Cluster Immune System
Just-in-time ScalabilityRefactoring
Developer SandboxMinimum Viable
Product
Measure FasterFunnel AnalysisCohort Analysis
Net Promoter ScoreSearch Engine
MarketingPredictive Monitoring
Measure Faster
Split TestsContinuous DeploymentUsability TestsReal-time Monitoring & AlertingCustomer Liaison
Learn Faster
Split TestsCustomer DevelopmentFive WhysCustomer Advisory BoardFalsifiable HypothesesProduct OwnerAccountabilityCustomer ArchetypesCross-functional TeamsSemi-autonomous TeamsSmoke Tests
Experiment is a cycle around the validated
learning loop
BUIL
D- M
EASU
RE- L
EARN
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Recollect: Vision – Strategy - ProductProductStrategy
Vision
Strategy: Employed by the start up to achieve its vision & includes – business model, product road map, partners, competitors, who is a customer etc.
Change in Strategy is a Pivot
Product: Is the end result of the strategy
Change in Product is Optimization
Vision: The true north! The destination the start up intends to reach
Entrepreneurs are committed to seeing what the start up to its destination
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Pivots – Catalogue
Platform PivotBusiness
Architecture Pivot
Zoom-out Pivot
Engine of Growth Pivot
Customer Segment Pivot
Channel Pivot
Zoom-in Pivot
Value Capture Pivot
Customer Need Pivot
Technology Pivot
Pivot is a structured course correction designed to test a new fundamental hypothesis about the product, business model and engine of growth
Companies that cannot bring themselves to pivot to a new direction on the basis of feedback from the marketplace can get stuck in the land of the living dead
Pivot is a special kind of change designed to test a new fundamental
hypothesis about the product, business model and engine of
growth
PIVOTS!
A pivot is better understood as a new strategic hypothesis that will require a new MVP (minimal viable product) to test. Successful pivot puts a company on a path toward growing a sustainable business