Lean 101

Lean 101@rafaelbalbijr//[email protected]

Thursday, January 31, 13

mailto:[email protected]


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


Singapore


Santiago


Sao Paulo


Beijing New York

San Fran

Sydney

London


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


Making Sh* Happen


Funded Startups

Instacanvas

Borrowmydog.gy

Branch.com


LET’SADVANCE THE SCIENCE OF ENTREPRENEURSHIP


Let’s break some ice

About Me//About You


The Abyss


Lean

I will code

I will get funding,

I will write a business plan


Don’t be a super hero


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


Lean is about...


Experiment - An operation or procedure carried out in

order to discover and test

Planning - A detailed proposal for doing or achieving something.


Experimenting vs Planning


What is “waste” in a startup?

• Building the wrong thing

• Pre-mature optimization


Successful startups pivot

• YouTube, Facebook, PayPal

• Twitter, Instagram


Make data-driven decisions

• Increase team transparency

• Move faster


Build//Measure//Learn


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.

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What a VC taught me..

Concept Phase Execution Phase

Value Prop//Customer Segment//

//Management//Systems


Lean Business Models

Get to your first sale as quickly as possible!

Break it! -> Push


Build//Hypothesize• What’s your idea/

problem that you want to solve?

• Customer?

•


Measure//Test

Customer Development - Get out of the building

Putting what we’ve built in front of people


Learn//Iterate

Gain Knowledge

Implement


Build//Measure//Learn


• 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


http://en.wikipedia.org/wiki/Not_equals_sign

http://en.wikipedia.org/wiki/Not_equals_sign

• MVP = Minimal Viable Experiment

MVP


Goals of MVP

Maximize Learning

Minimize opportunity cost

Rapid Testing + Iteration


Types of MVP

Exploration

Pitch

Concierge


An interaction with customers problems to understand behavior

Exploration


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)


Pitch

1. Decreasing Discount

2. Meta

3. Innovator


Concierge

Manually delivering on the solution

Minimal code, pulling+pushing levers

No automation


Concierge

1. One use case

2. Real life simulation


Customer Development


Customer Development is the process by which we go out and test our

hypothesis and assumptions


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


Look for a Pattern

When is enough, enough?


CUSTOMER


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?


“No business plan survives first contact with customers.”

- Steve Blank

Get Out of the Building


• 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?


It is NOT

• Multiple Choice Surveys

• Focus Groups

• Your Personal (Biased!) Experience

• Conversations with Friends


Effective Interviewing


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


No Selling Allowed


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}


Track Data• Write everything down RIGHT after

• Set up time to evaluate data

• Have one location where everything is stored


Validation Board


“A startup’s runway is the number of pivots it can still make.”

-Eric Ries


GOAL: Decrease Cash Spent Between Pivots


PRODUCT =EXPERIMENT



PROGRESS = VALIDATED LEARNING

PRODUCT =EXPERIMENT



Ok...so?


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...


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


Ok...so?


3D printing - will do to hardware what the internet did to software

Singularity RoboticsNanotech

Africa/China/Brasil/India


leanstartupmachine.com

[email protected]

@rafaelbalbijr

validationboard.com


http://www.validationboard.com








Lean 101

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