lean startup: a brief introduction

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Lean Startup A Brief Introduction


Objectives

By the end of this presentation, you will understand:• The basic principles of the Lean Startup method,• How to apply it to your business development project,

and• Why it’s important to the success of your business

innovation.

You will also learn a technique for quickly and inexpensively testing the most important assumption of your business model: whether or not your business idea is addressing a problem people are willing to spend money on to solve.


Lean Startup Basics


9/10 startups fail.biz dev initiatives

Is this necessary?


“Our research is unequivocal: persistently high innovation failure rates are not an immutable law of nature.”


eA systematic process for reducing the risk that a new business development initiative will fail.

len start pLean Startup


Why do mostbiz dev initiatives fail?


Creating a new business is like

solving a complex puzzle.


In unsuccessful business development initiatives,the resources run out before the puzzle is solved.


By aggressively cutting waste from the biz dev process, we increase our odds of success.


Thus the “lean” in lean startup.


Going after the wrong customer Solving the wrong problem

Building the wrong product or more

features than necessary

Charging the wrong person & monetizing

the wrong thing

Using the wrong marketing channels

& tactics

Hiring the wrong people

Investing in the wrong resources /

partnerships

Using the wrong governance model or

organization

Where’s the waste?


Core Tenets of Lean Startup

1. Acknowledge the uncertainty2. Articulate your hypotheses3. Identify & prioritize the risks that are

embedded in these hypotheses 4. Design & execute experiments to

validate or invalidate the hypotheses at the lowest possible cost

5. Iterate


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What do we really know?

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Where’s the risk?


Build-Measure-Learn Loop


Key Stages of Lean StartupSTAGE 1You have

identified an important problem

STAGE 2You have

designed a solution that customers

like

STAGE 3You have

delivered a solution that

satisfies customers &

investors

STAGE 4You have built the systems & infrastructure necessary to

scale

Ideas Biz Concept Product Offering

Technical product design

Distribution partnerships, staffing plans, etc.

Product Pitch Deck “Coming Soon” landing page

Minimum Viable Product

Partnerships, etc.

Data Results of ~ 20 “Problem Interviews” w/ target customers

Landing page conversion metrics

End-to-end customer conversion & retention metrics

Operational metrics


Customer Problem InterviewsThe quickest & cheapest way to validate (or invalidate) the riskiest assumption of your

business concept


Background

• For most businesses, the #1 problem is not building the product, but finding a customer who is willing to pay for the product.

• Customer Problem Interviews are a specific technique used by early stage entrepreneurs to quickly and cheaply validate (or invalidate) key hypotheses regarding:– Who is the customer, and– What is the nature and urgency of the

customer’s problem?


Process Summary

1. Formulate testable hypotheses2. Script the interview3. Schedule interviews4. Conduct interviews5. Review results & decide what’s next


Formulate Testable Hypotheses

• Who is the customer – Hypothesis 1: The customer will be businesses with at least 1 –

10 employees– Hypothesis 2: The customer will be in the retail industry sector– Hypothesis 3: The customer will have been in business for 5+

years• What is the nature and urgency of the customer’s problem

– #1 Problem – Don’t have a plan for growing their business. Urgency = High

– #2 Problem – Don’t have reliable access to quality business coaching. Urgency = Medium

– #3 Problem – Lack a network of “peer mentors.” Urgency = Medium


See Example

Script the Interview


Schedule Interviews

Hi –

This is [your name]. I am one of the leaders of a new startup company that hopes to [your mission].

We are in the very early stages of our project and have not yet even developed our product. But before we get too far ahead of ourselves, we wanted to sit down with the type of people/organizations we envision as our future customers and make sure we have really understood their needs.

Would you be willing to sit down with me for a 30-minute conversation to help me understand your current [workflow, etc.]. I’m not selling anything, just looking for advice.


Conduct Interviews

1. Check your biases at the door2. Stick to your script3. Have a team member present4. Avoid recording the interview5. Document the results immediately after


Review & Decide

• Exit criteria for the Problem Interview Process– At least 10 completed interviews– You see a clear pattern of regarding the customer

segment & problem• Review all your notes• Update your business concept with your

validated learnings• Ideate revisions to your business concept as

necessary• Decide what to do next

lean startup: a brief introduction

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