Steve Barsh on De-Risking and Key Assumptions for Wharton Biz Plan Competition Community Feb 20131. Lean Startups
From Idea to Traction:
Tricks & Traps for
Maximizing Success
Steve Barsh
steve@barsh.com * +1.215.888.2101
@sbarsh
Jeff Deville
jeffdeville@gmail.com * +1.484.278.1852
@jeffdeville
1
Copyright © 2009-2013 by Steve Barsh. All Rights Reserved.
Monday, February 18, 13
2. Observations
• Don’t understand key
assumptions
• Don’t de-risk before
• Building the product
• Pitching
• Don’t use out-of-box
techniques
• Ask for money too early
• Look for validation from
investors
2 Copyright © 2009-2013 by Steve Barsh & Jeff Deville. All Rights Reserved.
Monday, February 18, 13
3. 3 – 7 Key Assumptions
3 Copyright © 2009-2013 by Steve Barsh & Jeff Deville. All Rights Reserved.
Monday, February 18, 13
4. De-Risking Goals
• Convert assumptions into
knowledge
• At lowest cost
• As quickly as possible
• Decrease assumptions
to increase value
• Consume intellectual capital
before outside capital
• Succeed or fail quickly
4 Copyright © 2009-2013 by Steve Barsh & Jeff Deville. All Rights Reserved.
Monday, February 18, 13
5. Stop Waving, Start Pointing!
5 Copyright © 2009-2013 by Steve Barsh & Jeff Deville. All Rights Reserved.
Monday, February 18, 13
6. Experiment
• Hypotheses
• Prove or Disprove
• Build -- Release,
measure, learn,
iterate
• Research
• Valid proxies
6
Copyright © 2009-2013 by Steve Barsh & Jeff Deville. All Rights Reserved.
Monday, February 18, 13
7. Example of Experimentation to De-risk Key Assumptions
✓ Used when full guest details don’t flow through the supply chain
✓ Like “checking in” for a flight or cruise
✓ Collects all guest arrival and contact details
✓ Coordinates a smooth arrival
7 Copyright © 2009-2013 by Steve Barsh & Jeff Deville. All Rights Reserved.
Monday, February 18, 13
8. Things to think about
1. Don't debate, A/B test. (applies to software,
messaging / positioning (e.g., Adwords))
2. Innovate in real time
3. Get an unfair advantage (mentors, advisors, Board,
LinkedIn, University, wherever you can)
4. Ask for advice, not money. (1 mouth, 2 ears)
5. What are you learning?
6. What are your key assumptions?
7. What can you prove with $0?
8. Minimum viable product (MVP) -- get things to
users.
8 Copyright © 2009-2013 by Steve Barsh & Jeff Deville. All Rights Reserved.
Monday, February 18, 13