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Learn-Measure-Build Craft Useful Experiments By Running Backwards
Janice FraserDecember 2013
1Monday, December 16, 13
© LUXR.CO20132Monday, December 16, 13
© LUXR.CO2013
Luxr.coRadically helpful workshops for
startup founders
First month free...use discount code: TEHCARD
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© LUXR.CO2013
TWEET!
#LeanStartup
@clevergirl@luxrco
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• Learn the difference between an experiment and a solution test.• Discover the seven steps to crafting an experiment with a clear
result. • Practice identifying assumptions and defining testable
hypotheses. • Understand the anatomy of an experiment. • Design an experiment to test a real-life hypothesis.
• "Get out of the classroom" to run a real-world experiment on your fellow conference-goers.
• Define a result and make a go-forward decision. • Refine the experiment based on cost, time, and manpower. • Identify the four characteristics of successful experiments.
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© 2013 LUXr Incorporated, www.luxr.co
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© 2013 LUXr Incorporated, www.luxr.co
June & Pete’s Wedding Cake
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© 2013 LUXr Incorporated, www.luxr.co
http://saptstrength.com/
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© 2013 LUXr Incorporated, www.luxr.co
http://saptstrength.com/
Pete June
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© 2013 LUXr Incorporated, www.luxr.co
http://saptstrength.com/
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© 2013 LUXr Incorporated, www.luxr.co
April
http://saptstrength.com/
May
June
July
August
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© 2013 LUXr Incorporated, www.luxr.co
sedonaweddingcakes.com
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© 2013 LUXr Incorporated, www.luxr.co
freebestpictures.blogspot.com
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thekitchn.com
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Zoe Clark, The Cake Parlour
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© 2013 LUXr Incorporated, www.luxr.co
Zoe Clark, The Cake Parlour
12Monday, December 16, 13
© 2013 LUXr Incorporated, www.luxr.co
sedonaweddingcakes.com
13Monday, December 16, 13
© 2013 LUXr Incorporated, www.luxr.co
sedonaweddingcakes.com
Zoe Clark, The Cake Parlour
13Monday, December 16, 13
© 2013 LUXr Incorporated, www.luxr.co
LEAN Star tup
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© LUXR.CO 2013
LEAN Star tup
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Build measure
learn!
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© LUXR.CO 201317Monday, December 16, 13
© LUXR.CO 201317Monday, December 16, 13
© LUXR.CO 2013
Lean Startup is NOT
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Lean Startup is NOT
Cheap Startup
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© LUXR.CO 2013
Lean Startup is NOT
Cheap Startup
Fast Startup
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© LUXR.CO 2013
Lean Startup is NOT
Cheap Startup
Fast Startup
Shortcut Startup
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© LUXR.CO 2013
Lean Startup is...
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An approach for building companies that are creating new products and services in situations of extreme uncertainty.
Lean Startup is...
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© LUXR.CO 2013
An approach for building companies that are creating new products and services in situations of extreme uncertainty.
The approach advocates creating small products that test the entrepreneur’s assumptions, and using customer feedback to evolve the product, thereby reducing waste.
Lean Startup is...
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1. List your assumptions.2. Understand your customers.3. Experiment efficiently.4. Adjust direction based on evidence.
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© LUXR.CO 2013
1. List your assumptions.2. Understand your customers.3. Experiment efficiently.4. Adjust direction based on evidence.
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© LUXR.CO 2013
Go backward to go forward.
Learn
Measure
Build
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© LUXR.CO 2013
Go backward to go forward.
Learn
Measure
Build
22Monday, December 16, 13
© LUXR.CO 2013
Go backward to go forward.
Learn
Measure
Build
22Monday, December 16, 13
© LUXR.CO 2013
Go backward to go forward.
Learn
Measure
Build
22Monday, December 16, 13
© LUXR.CO 2013
Go backward to go forward.
Learn
Measure
Build
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© LUXR.CO 2013
Think of it like this...
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Think of it like this...
TDD
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Think of it like this...
TDD
A Lean Startup is a test-driven COMPANY
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Write the test first
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Plot the difference
THINK
release
MAKErelease
MAKErelease
MAKE
RISK
= U
NVAL
IDAT
ED EF
FORT
TIME
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Lots of little wigglesRI
SK =
UNV
ALID
ATED
EFFO
RT
TIME
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© LUXR.CO 2013
Lots of little wigglesRI
SK =
UNV
ALID
ATED
EFFO
RT
TIME
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© LUXR.CO 2013
RISK
= U
NVAL
IDAT
ED EF
FORT
TIME
Each wiggle is a learning cycle.
MAKE
releaseBUILD
LEARN
BUILD
MEASURE
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There’s a pattern to startup work:
ideation decisionmaking
ideation etc.
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In foolproof experiments, the
results should be self-evident.
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1. Choose the problem to tackle. Clarify what’s uncertain, what you need to learn.
2. Understand the possible answers.3. Brainstorm “what you could do to prove it”.4. Choose the most broadly differentiated set of
indicators.5. Run the experiment. 6. Write down the results...on a sheet of paper. 7. Project the results into your future.
7 steps to foolproof experiments
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The Workshop
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© LUXR.CO2013
Box Me UpProvides you with plastic storage boxesTranports your stuff to storagePay to get your stuff back Per-box per year1 round trip per transactionIs it profitable?Storage facility “outside the city” that they have a long-term leaseThey keep your stuff for a yearFully secured; all sorts of insurance; 24-hr armed security.3 sizes of boxTarget customer is Young Families, 2 incomes, urban, 2 kids, owns homeFull “Bill of Lading” Which you fill out online. Max insurance is $500/box. Next-day pickup and deliveryCOGS: $12/box, avg., $6/box per storage, Assumption 40% capacity yr 2. Within 15 of the cityIf no-pay, stuff gets auctioned after 90 days of no-pay.Not a Moving company.Drop-off and pickup are same location. Nothing prevents business useRIght now margin is negative, because we’re not at scale. No union issues.Breaks even in year 3. No special handling boxes.Raised $5m series A from Sand Hill Road VCs150 customers in SF and 42 in NY. Size = boxbee sizeCommitted to pay $28/box/yr. Cost of customer acquisition? Nobody is paying up front.
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How Products Work
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Users
How Products Work
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Needs1. I need...2. I want...3. My goal is...
Users
How Products Work
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© LUXR.CO 2013
Needs1. I need...2. I want...3. My goal is...
UsesMary can...
Users
How Products Work
33Monday, December 16, 13
© LUXR.CO 2013
Needs1. I need...2. I want...3. My goal is...
UsesMary can...
Features
Users
How Products Work
33Monday, December 16, 13
© LUXR.CO 2013
Needs1. I need...2. I want...3. My goal is...
UsesMary can...
Features
Users
PrototypesUser Stories
Themed Releases
This Week
How Products Work
33Monday, December 16, 13
© LUXR.CO 2013
Needs1. I need...2. I want...3. My goal is...
UsesMary can...
Features
Users
Business thinking goes here
whywhathow
PrototypesUser Stories
Themed Releases
This Week
How Products Work
33Monday, December 16, 13
© LUXR.CO 2013
Needs1. I need...2. I want...3. My goal is...
UsesMary can...
Features
Users
Sketches, wireframes, pixels
Business thinking goes here
whywhathow
PrototypesUser Stories
Themed Releases
This Week
How Products Work
33Monday, December 16, 13
© LUXR.CO 2013
Needs1. I need...2. I want...3. My goal is...
UsesMary can...
Features
Users
Sketches, wireframes, pixels
Business thinking goes here
whywhathow
PrototypesUser Stories
Themed Releases
This Week
How Products Work
33Monday, December 16, 13
© LUXR.CO 2013
Needs1. I need...2. I want...3. My goal is...
UsesMary can...
Features
Users
Sketches, wireframes, pixels
Business thinking goes here
whywhathow
PrototypesUser Stories
Themed Releases
This Week
How Products Work
33Monday, December 16, 13
© LUXR.CO 2013
Needs1. I need...2. I want...3. My goal is...
UsesMary can...
Features
Users
Sketches, wireframes, pixels
Business thinking goes here
whywhathow
PrototypesUser Stories
Themed Releases
This Week
How Products Work THINK
MAKECHECK
BUILDMEASURE
LEARN
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© LUXR.CO2013
4 Characteristics of Successful Experiments1. High-stakes learning goal.2. Extremely clear, focused hypothesis with
controlled variables. 3. Broadly differentiated indicators
covering all possible outcomes.4. Right size and scale.
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Thank You!
#LeanStartup
@clevergirl@luxrco
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