2. What’s a Startup?
A startup is a human institution designed to
create a new product or service under
conditions of extreme uncertainty.
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3. ServerVault
• Pure Startup
• $9MM VC Funding
• Cutting Edge Technology
• Hot Sector - Data Center Hosting
• Differentiation - Ultra High Security
• Experienced Management Team
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4. Postmortem
• Didn’t know our customers
• Overstaffed too soon
• Marketing didn’t focus on the
customer’s pain points
• Board focus on revenue
• Never changed strategy
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5. Foundation Questions
• What Problem Do You Solve?
• Who’s Got It?
• What’s the Impact of the Problem?
• What Will They Pay to Make It Go Away?
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6. The Lean Startup
• Eric Ries - Serial Entrepreneur
• Published in September 2011
• Based on Toyota Lean Manufacturing
• A New Way to Launch Startups
• Reduce the Risk by Only Building
What Customers Want
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7. Customer Development
Model
Customer Customer Customer Company
Discovery Validation Creation Building
Source: Steven Blank, “The Four Steps to the Epiphany”
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8. The Lean Methodology
Ideas
Innovation Minimum Viable
Accounting Product
Learn Build
Data Product
Measure
A/B Testing
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9. Initial Business Plan
• Leap of Faith Hypothesis
• Drivers of Growth Hypothesis
• A Plan to Acquire Validated Learning
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10. Minimum Viable Product
• An absolute bare bones “product” that
allows for testing of the initial hypotheses
• It may have multiple versions of the
functionality
• Speed is more important than perfect
or even good quality
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13. Drivers of Growth
• Word of Mouth
• As a Side Effect of Usage
• Through Funded Advertising
• Through Repeat Purchase or Use
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14. Running Tests
• Embed Google Analytics in the MVP
• Use Google AdWords to Target Audience
• Run Multiple Tests
• Duration Can Be Short as a Day
• Price, Features, Workflow, Offer, Audience
• Get out of the office and meet customers
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15. Innovation Accounting
• Actionable, Audit-able and Accessible
• Don’t fall prey to Vanity Metrics
• Pick metrics that test the
Leap of Faith hypothesis
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17. Pivot or Full Speed Ahead?
• Regularly scheduled review mtgs
• Have our actions created positive results?
• If yes, continue development on features
• If no, pivot
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18. Tuning the Plan
Product Optimization
Strategy Pivot
Vision
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19. The Value of Lean Startup
• Focus on Solving Real Customer Problems
• Don’t Build What’s Not Needed
• Faster Time to Market
• Greatly Reduced Capital Requirements
• Develop Early Stage Fans
• Real Data for Future VC Funding
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20. References
• “The Lean Startup” by Eric Reis
• “Four Steps to the Epiphany” by Steve Blank
• Google Analytics - www.google.com/analytics
• Google AdWords - adwords.google.com
• Ghostery - www.ghostery.com
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