lean startup methodolgy
TRANSCRIPT
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Lean StartupBuild - Measure - Learn
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Waterfall Development- Waterfall Development was all about execution of the requirements
document
- Early versions of the product were shared with customers in Alpha and Beta Testing
- The goal of early customer access to the product was to uncover bugs not to provide feedback on features or usability.
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Waterfall Development- Only after shipping and attempting to sell the product would a
startup hear any substantive feedback from customers
- After months or even years of development, entrepreneurs learned the hard way that customers were not buying their product because they did not need or want most of its features
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Agile Development- Best practices in software development started to move to agile
development in the early 2000’s
- This methodology improved on waterfall by building software iteratively and involving the customer
- It lacked a framework for testing all commercialization hypotheses outside of the building.
- With Agile you could end up satisfying every feature a customer asked for and still go out of business.
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What is Lean Startup?- The Lean Startup provides a scientific approach to creating and
managing startups and get a desired product to customers' hands faster.
- Too many startups begin with an idea for a product that they think people want.
- They then spend months, sometimes years, perfecting that product without ever showing the product to the prospective customer
- They never spoke to prospective customers and determined whether or not the product was interesting.
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What is Lean Startup?- Lean isn't simply about spending less money. Lean isn't just about
failing fast, failing cheap.
- Lean is about putting a process, a methodology around the development of a product.
- A major improvement over Waterfall development, Lean Startup lets startups be fast, agile and efficient.
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Lean Startup- The goal of Lean process & Build-Measure-Learn is not to build a
final product to ship or even to build a prototype of a product
- The goal is to maximize learning through incremental and iterative engineering
- Learning could be about product features, customer needs, the right pricing and distribution channel, etc.
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WORK SMARTER NOT HARDER- The Lean Startup methodology has as a premise that every startup
is a grand experiment that attempts to answer a question.
- The question is not "Can this product be built?" Instead, the questions are "Should this product be built?" and "Can we build a sustainable business around this set of products and services?"
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WORK SMARTER NOT HARDER- This experiment is more than just theoretical inquiry; it is a first
product.
- If it is successful, it allows a manager to get started with his or her campaign
- enlisting early adopters, adding employees to each further experiment or iteration
- Eventually starting to build a product.
- By the time that product is ready to be distributed widely, it will already have established customers
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DEVELOP AN MVP- It’s critical to understand that an MVP is not the product with fewer
features.
- The minimum viable product is that version of a new product which allows a team to collect the maximum amount of validated learning about customers with the least effort
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DEVELOP AN MVP- Each time you build an MVP you also define what you are trying to
test/measure
- The goal continues to be to maximize learning not to build a beta/fully featured prototype of the product.
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DEVELOP AN MVP- The first step is figuring out the problem that needs to be solved
and then developing a minimum viable product (MVP) to begin the process of learning as quickly as possible.
- Once the MVP is established, a startup can work on tuning the engine. This will involve measurement and learning and must include actionable metrics that can demonstrate cause and effect question.
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DEVELOP AN MVP- A core component of Lean Startup methodology is the build-
measure-learn feedback loop
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DEVELOP AN MVP
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DEVELOP AN MVP- The goal of Build-Measure-Learn isn’t just to build things, the goal is
to build things to validate or invalidate the initial idea.
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DEVELOP AN MVP- When this process of measuring and learning is done correctly, it
will be clear that a company is either moving the drivers of the business model or not.
- If not, it is a sign that it is time to pivot or make a structured course correction to test a new fundamental hypothesis about the product, strategy
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Validated Learning- Rigorous method for demonstrating progress when one is
embedded in the soil of extreme uncertainty.
- Validation comes in the form of data that demonstrates that the key risks in the business have been addressed by the current product.
- That doesn’t always mean revenue, either
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Validated Learning- “By all accounts, what impressed investors the most were two facts
about Facebook’s early growth … More than half of the users came back to the site every single day. This is an example of how a company can validate its value hypothesis - that customers find the product valuable.”
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Innovation Accounting- Innovation accounting enables startups to prove objectively that
they are learning how to grow a sustainable business.
- The process is done with three steps
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Innovation Accounting Process- 1) Establish the baseline.
- Where are you now, and how are you currently performing?
- You can run an MVP test to set some benchmark data points.
- This might involve a smoke test, with pure marketing, just to see if there interest from potential customers.
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Innovation Accounting Process- 2)Tune the engine. Initiate your experiment to test your value or
growth hypothesis.
- e.g. a company might spend time improving the design of its product to make it easier for new customers to use.(This presupposes that the activation rate of new customers is a driver of growth)
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Innovation Accounting Process- 3) Pivot or persevere. Based on the data, you can persevere with
the product/features/process you now know to be correct, or pivot and test your next assumption.
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Bad idea to use a lean startup methodology?
- As a general rule, if people die when your software doesn't work, then you better ship only when you are 100% feature complete and tested.
- You wouldn't want to build systems with many downstream dependencies in an agile way.
- In short: anywhere where the cost of "pivoting" or making a mistake is very expensive would be a bad place to apply lean startup principle
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Bad idea to use a lean startup methodology?
- Lean startups work well when the general problem is solvable, but your risk is entirely market risk - that is, the risk that no one wants your product.
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Sources- http://theleanstartup.com/principles
- http://www.startuplessonslearned.com/2008/09/lean-startup.html
- http://www.startuplessonslearned.com/2009/08/minimum-viable-product-guide.html
- http://www.startuplessonslearned.com/2010/09/good-enough-never-is-or-is-it.html
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Sources- https://www.youtube.com/watch?v=fEvKo90qBns
- https://steveblank.com/2015/05/06/build-measure-learn-throw-things-against-the-wall-and-see-if-they-work/
- https://www.quora.com/Is-there-any-flaw-or-drawback-to-the-lean-startup-methodology
- https://paulminors.com/the-lean-startup-eric-ries-book-summary-pdf/
- http://blog.hypeinnovation.com/the-10-methods-of-the-lean-startup