SeedHack @ London Business School.

1. Lean Startup Essentials
Lean Startup
Essentials
@lfittl @nikgraf
SeedHack
23rd September 2011

2. Lean Startup Essentials #1: Introduction
Whats the Lean Startup?
• How to create order in the
(unavoidable) chaos of a startup
• First learn, then execute
• Quick Iterations on your
business model

3. Lean Startup Essentials #1: Lean Startup
Most startups fail
from a lack of (paying) customers.

4. Lean Startup Essentials #1: Lean Startup
Why?
Startups are not just a small
version of a big company.

5. Lean Startup Essentials #1: Lean Startup
Startup:
Temporary organization used to
search for a repeatable and scalable
business model.
As defined by Steve Blank.

6. Lean Startup Essentials #1: The Lean Canvas
We need
structured learning
before we execute.

7. Lean Startup Essentials #1: The Lean Canvas
The Lean Canvas

9. Lean Startup Essentials #1: The Lean Canvas
Problem Solution Unique Value Unfair Customer
Proposition Advantage Segments
Top 3 problems Top 3 features
Single, clear, Can’t be easily Target customers
compelling copied or bought
message that
states why you
are different and
Key Metrics worth buying Channels
Key activities you Path to
measure customers
Cost Structure Revenue Streams
Customer Acquisition Costs Revenue Model
Distribution Costs Life Time Value
Hosting Revenue
People, etc. Gross Margin

10. Lean Startup Essentials #1: The Lean Canvas
Problem
• The top 3 problems the
Problem Key Activities Value Customer Customer
Proposition Relationships Segments
customer is facing today
Key Channels
Resources
Cost Structure Revenue Streams
• These might be things they’ve
already started building in
house, because there is an
active need

11. Lean Startup Essentials #1: The Lean Canvas
Customer Segments
• Narrow group of people that
Key Partners Key Activities Value Customer Customer
Proposition Relationships Segments
buy/use your product
Key Channels
Resources
Cost Structure Revenue Streams
• Marketplace biz models =
2 cust segmens (or more)

12. Lean Startup Essentials #1: The Lean Canvas
Value Proposition
• Single, clear, compelling
Key Partners Key Activities Value Customer Customer
Proposition Relationships Segments
message that turns an unaware
Key Channels
Resources
visitor into an interested
Cost Structure Revenue Streams
prospect
• What you put on your
landing page

13. Lean Startup Essentials #1: The Lean Canvas
Solution
• Whats the Minimum viable
Key Partners Key Activities Value Customer Customer
Proposition Relationships Segments
product (MVP) ?
Key Channels
Resources
Cost Structure Revenue Streams
• Minimal set of functionality to
solve each problem of the
customer

14. Lean Startup Essentials #1: The Lean Canvas
Channels
• How does the customer learn
Key Partners Key Activities Value Customer Customer
Proposition Relationships Segments
about your product?
Key Channels
Resources
Cost Structure Revenue Streams
• B2B and B2C vastly different!
• SEM, SEO, Friend Invites, Social
Media, Direct Sales, Tradeshows,
PR, Content Marketing, etc.

15. Lean Startup Essentials #1: The Lean Canvas
Revenue Streams
• How much is the problem
Key Partners Key Activities Value Customer Customer
Proposition Relationships Segments
worth to the customer?
Key Channels
Resources
Cost Structure Revenue Streams
• Not how much it costs you to
implement the solution
• Avoid Free and Freemium!
(marketing tactic, not rev model)

16. Lean Startup Essentials #1: The Lean Canvas
Cost Structure
• What are your HR costs?
Key Partners Key Activities Value Customer Customer
Proposition Relationships Segments
(rough estimate)
Key Channels
Resources
Cost Structure Revenue Streams
• Marketing channel costs
• Infrastructure costs
• It’s about Unit Economics,
not your made-up 5 year plan

17. Lean Startup Essentials #1: The Lean Canvas
Live Example
Someone from the audience:
Pitch us an idea
4 other people:
What’s the problem?
What’s the customer segment?
What’s the value proposition?
What’s the revenue model?

18. #2: Customer Discovery
Test Your Hypothesis

19. Lean Startup Essentials #2: Customer Discovery
Customer Interviews
30 min in-person with
your prototypical customer
People like talking about their field -
explore their worldview.

20. Lean Startup Essentials #2: Customer Discovery
How to conduct an interview
1. Set context & tell your story
2. Tell your problem hypothesis
3. Listen to their worldview
4. Ask for follow up / references
DO NOT sell them your solution

21. Lean Startup Essentials #2: Customer Discovery
Online Market Tests:
Google Adwords
Fake Landing Page with
“Signup to be notified when we launch”
“Can we call you to ask a couple of Qs?”

22. Lean Startup Essentials #2: Customer Discovery
Amy Hoy’s
Sales Safari:
Lurk in online forums of your
customer segment, learn how they
talk about products & benefits

23. Lean Startup Essentials
Q&A

24. Lean Startup Essentials Literature
Literature

25. Lean Startup Essentials Literature
Steve Blank - The Four Steps to the Epiphany
steveblank.com

26. Lean Startup Essentials Literature
Alex Osterwalder - Business Model Generation
businessmodelgeneration.com

27. Lean Startup Essentials Literature
Eric Ries - The Lean Startup
lean.st

28. Lean Startup Essentials Literature
Ash Maurya - Running Lean
book.runningleanhq.com

29. Lean Startup Essentials Literature
Neil Davidson - Don’t Just Roll the Dice

30. Lean Startup Essentials
Thanks!
@lfittl @nikgraf