STARTUPLEAN

@HristoNeychevHristoNeychev HristoNeychev

I’M HRISTO NEYCHEVI bring new ideas to life

EXPERIENCE13 years, 4 industries, 3 startups

INTERESTScloud, mobile, web

neychev dance studio

what is the most resilient parasite?

bacteria?

virus?

IDEA

1+1 = 1+1

GROWS LIKE A VIRUS

1+1 = 2+2

“…and even the smallest seed of

an idea can grow. It can grow to

define or destroy you!”

SUCCESSFUL

BUSINESS

BRIGHT

IDEA

BRIGHT

IDEA

SUCCESSFUL

BUSINESS

BRIGHT

IDEA

SUCCESSFUL

BUSINESSTime

Resources

Funding

People

Etc…

BRIGHT

IDEA

SUCCESSFUL

BUSINESS

Time

Resources

Funding

People

Etc…

STARTUPLEAN

LEAN MANUFACTURING(JIT) Just In time Delivery

THE LEAN STARTUPby Eric Ries

JAPAN Manufacturing Industry

Lean startup methodologies apply to any

individual, team, or company looking to introduce

new products or services into the market.

LEANslenderagilequickfastrapidswiftnimble…

STARTUP“A human institution designed to create a new product or service under conditions of extreme uncertainty”

Eric Ries

CREATE

EXTREME UNCERTAINTY

„If you don’t know what you are doing…

…better do it fast“

Put a process/methodology around it.

VALIDATED LEARNING!

Get ready to FAIL!

You rarely hit the bull's-eye, but this never

stopped you from playing!

INNOVATIONAT ESSILOR OF AMERICA

US HQ

50+

Manufacturing

Labs

500+

Sales Reps

30,000+

Eye Care Professionals

(ECPs)

150,000,000+

People wearing eyeglasses

1.9 years

repurchase cycle

EYE EXAM

BUY EYEGLASSES

BUT, YOU HAVE TO WAIT!

THE IDEA

Tablet device will educate patients

while they are waiting

•Educate patients

•Help make the right decision

• Improve eye-care

•Better eye health

• Increase market share

• Improve capture rate

• Increase revenue per customer

?Can this be

done?

…why and how?

WHY AND HOW

•Tablet or TV? Why?

•Education or advertising? Or both? How?

•Before or after the eye exam? Why?

•Self-service or someone will help? Who? Why?

•Should we sell it or give it away? Why? How?

I prefer the

LEANCANVAS

Business Model Canvas

Problem (1) Solution (4) Unique Value Proposition (3) Unfair Advantage (5) Customer Segment (2)

Top 3 problems

Top 3 features

Single, clear, compelling message that states why you

are different and worth buying

Can’t be easily copied or bought

Target customersKey Metrics (8) Channels (9)

Key activities you measure

Path to customers

Cost Structure (7) Revenue (6)

Customer Acquisition CostsDistributing Costs

HostingPeople, etc.

Revenue ModelLifetime Value

RevenueGross Margin

Problem (1) Solution (4) Unique Value Proposition (3) Unfair Advantage (5) Customer Segment (2)

Customers are unaware of the key benefits of

premium lenses

Opticians do a poor job explaining them

Tablet + videos

Learn all you need to know about your eyes and the

lenses you need. Make the right choice. Take care of your

eyes’ health.

We sell the most premium lenses on

the market

Eyeglass wearersKey Metrics (8) Channels (9)

Capture rateRevenue per customer

Share of ECP salesPath to customers

Cost Structure (7) Revenue (6)

Tablets, videos, software, distribution Increased purchases in ECP channel

TOOLS TO HELP YOU•Research

•Surveys

• Interviews – ask for commitment

•Focus groups

•Test market

• [Genchi Genbutsu] – “go and see for yourself”

•EXPERIMENT

COMMITMENTS

TIME – meetings, trials, etc.

REPUTATION – intro, testimonial,

case study, etc.

CASH

現地現物 [Genchi Genbutsu]

A key principle of the Toyota Production System

"go and see for yourself"

現場 [Gemba]

“the real place”

“the crime scene”

“Design an EXPERIMENT that

attempts to answer the question!”

Eric Ries

Create series of FAST and CHEAP

micro-experiments that lead you to

VALIDATED LEARING!

The unit of progress for Lean Startups

VALIDATED LEARNING

PROGRESS IN MANUFACTURING

NUMBER OF UNITS=

PROGRESS IN STARTUPS

VALIDATEDLEARNING=

THE TRADITIONAL APPROACH

1. Slow

2. Expensive

3. Gives you ONLY ONE attempt to succeed/fail (in a 20%/80% game)

RESULT: You build something that nobody wants!

• PIC

Build it and they will come!

Traditional

Sequential

Approach

Lean Startup

Approach

THE LEAN STARTUP APPROACH1. FAST and Cheap

2. MULTIPLE full iteration cycles

3. Gives you MULTIPLE opportunities to LEARN/VALIDATE your thinking

4. Gives you MULTIPLE attempts to SUCCEED/FAIL

5. Gives you MULTIPLE opportunities to PIVOT

Traditional

Sequential

Approach

Lean Startup

Approach

Minimum Viable Product

MINIUM VIABLE

MVP

Crappy

products

nobody

wants

Expensive

products

that require

to much

time and

money

“Any additional work beyond what was required to start learning is waste, no matter how important it might have seemed at the time.”

The Dropbox MVP

“The first version of Gmail was literally written in a day.” –Paul Buchheit (creator and lead developer of Gmail)

“Entrepreneurship in a lean startup is really a series of MVP’s” – Eric Ries

“If Apple can launch a smartphone without Find or Cut-and-Paste, what can you cut out of your product requirements?” – Sramana Mitra

MVP

MVP #5

MVP #1PowerPoint Deck

+ Hristo Neychev

VALIDATED ASSUMPTIONS/HYPOTHESIS

•Customers are willing to spend time to learn more about eyeglass lenses

•Explaining the benefits of high quality lenses changes customers buying decision (upsell)

MVP #2Info in the deck fits

your prescription

MVP #3Self-service deck

(no Hristo Neychev)

MVP #4Simple video playing

from my laptop

MVP #5Ugly tablet plays 5 videos

based on your prescription

KEY LEARNING•Build multiple MVPs

•Don’t spend months waiting for a nice product and then change the company's direction

•Adapt your plan incrementally, inch by inch, minute by minute

•Genchi Genbutsu - "go and see for yourself"

WHAT DO I VALIDATE?

Test the founders hypothesis about:

1. Customer problem

2. Product concept

3. If the minimum feature set solve that problem

What if I fail to validate the hypothesis?

Change in the strategy without changing the vision

PIVOT“Structured course correction designed to test a new fundamental hypothesis about the product, strategy, and engine of growth”

Eric Ries

The direction of your PIVOT

depends on your vision!

PIV

OT E

XA

MP

LE 1

WAS: “The Point” began as a platform for mobilizing

groups of people towards action for various causes

PIVOTED TO: only one group action - group buying

PIV

OT E

XA

MP

LE 2

WAS: blended elements of Foursquare and Mafia Wars in

a mobile app

PIVOTED TO: remove everything except the photo-

sharing feature, thus renamed to “Instagram”

PIV

OT E

XA

MP

LE 3

WAS: “application that will allow individuals to "beam" sums of

money between handheld devices such as mobile phones, Palm

Pilots, and pagers” 07.27.99

PIVOTED TO: online payments

PIV

OT E

XA

MP

LE 4

WAS: Cloud-based IDE for desktop development

THEN: Cloud-based IDE for Mobile development

THEN: Cloud services for hybrid mobile developers

NOW: Cloud platform for Mobile development

Action Plan

Idea

Quick research

Business model canvas

First product

Hypothesis / Assumptions

MVP3

MVP3

MVP1

MVP2

PIVOT or

PERSEVERE

Abandon this direction

PIVOT or

PERSEVERE

ASSUMPTIONS

1. List all assumptions

2. Create MVP(s) to VALIDATE all assumptions

3. BUILD-MEASURE-LEARN

4. List all new assumption

5. Create MVP(s) to VALIDATE all new assumptions

6. BUILD-MEASURE-LEARN

…rinse and repeat

YOUR BIGGEST FEAR?

•No money?

•No time?

•No good ideas?

•No motivation?

•No co-founder?

CREATING

THE

WRONG

THING!

Build

MeasureLearn

PRODUCT

DATA

IDEAS

CLOSING WORDS

• Move as fast as possible

• Learn as much as possible

• Don’t be afraid to PIVOT

• Don’t be afraid to FAIL

• VALIDATE everything

HAPPY VALIDATION!Thank you!

Hristo Neychev

@HristoNeychev

HristoNeychev

HristoNeychev