Silicon Flatirons is pleased to host Rally Software's Zach Nies for a Crash Course about some of the surprising science behind building successful startups. Even though building a startup is hard work with high failure risk, entrepreneurs Steve Blank and Eric Ries have popularized practices that can increase the odds of success. Following the Customer Development or Lean Startup practices will show you what to do. This talk will give you an understanding of why these techniques work, which will allow you to better apply them to your startup or scale them into your enterprise. The event will focus on high growth business based on the deep experience. Entrepreneurs are by nature execution-oriented and you will walk away from the talk with concrete, actionable ideas that will help you make better decisions tomorrow. The subject matter should be relevant to both entrepreneurs creating new companies and entrepreneurs reinventing existing enterprises.

1. Lean Startups
Silicon Flatirons Crash Course

2. h"p://www.flickr.com/photos/nateone/3768979925;

3. Zach Nies
@zachnies

4. Why I care
about startups

6. Font Sampler
http://media.kelbymediagroup.com/layersmagazine/images/columns/artoftype/may06/glyph-set.jpg http://en.wikipedia.org/wiki/File:Caslon-schriftmusterblatt.jpeg

8. 2,500,000
Customers
Revolutionized
an industry

10. Amazing
team, culture,
product, and
process

11. One problem…

12. Bad business

13. Revolutionized
nothing

15. Amazing
team, culture,
product, process

16. I love to change
industries

17. Apply new
disciplines
to your startup

18. Become disciplined
explorers…

19. who know how to
balance exploration
and execution

20. Increase your
odds of success

22. What is a startup?

24. How do we navigate
that uncertainty?

25. Explore Execute
h"p://www.slideshare.net/sblank/the?startup?owners?manual?sxsw?11954724;

26. When to explore vs
execute?

27. Brown,;Tim;(2009?09?16).;Change;by;Design;(Kindle;LocaPon;1984).;Harper;Collins,;Inc..;Kindle;EdiPon.;;

28. Where are you?

29. Brown,;Tim;(2009?09?16).;Change;by;Design;(Kindle;LocaPon;1984).;Harper;Collins,;Inc..;Kindle;EdiPon.;;

30. What to do
Execute
Brown,;Tim;(2009?09?16).;Change;by;Design;(Kindle;LocaPon;1984).;Harper;Collins,;Inc..;Kindle;EdiPon.;;

31. What to do
Brown,;Tim;(2009?09?16).;Change;by;Design;(Kindle;LocaPon;1984).;Harper;Collins,;Inc..;Kindle;EdiPon.;;

32. What to do
Big
Companies
Brown,;Tim;(2009?09?16).;Change;by;Design;(Kindle;LocaPon;1984).;Harper;Collins,;Inc..;Kindle;EdiPon.;;

33. Big
Companies
h"p://www.flickr.com/photos/ironnickel/6076087519;

34. Startups
h"p://www.flickr.com/photos/elcapitan/2387917709;

35. What to do
Execute
Brown,;Tim;(2009?09?16).;Change;by;Design;(Kindle;LocaPon;1984).;Harper;Collins,;Inc..;Kindle;EdiPon.;;

36. Explore vs. Execute

37. 30 years
of science

38. Unordered Ordered
Chaotic Complex Complicated Simple

39. Unordered Ordered
Complex Complicated
Chaotic Simple

40. Unordered Ordered
Complex Complicated
Chaotic Simple

41. Unordered Ordered
Complex Complicated
Cause & Effect is only Cause & Effect is not
understandable in obvious and requires
retrospect, and is not analysis or expertise
repeatable
Cause & Effect is
Cause & Effect not obvious to all
perceivable and is repeatable
Chaotic Simple
Cynefin

42. Music Industry in 2000 - Napster
Complex Complicated
Independent Managing a large tour
musicians self
publishing online
Disorder
Managing a NIN tour
Major label online Major label CD
distribution distribution
Chaotic Simple
Unordered Ordered

43. Unordered Ordered
E E
x x
p e
l c
o u
r t
e e

44. Unordered Ordered
E D
e
m l
e i
r b
g e
e r
a
n t
t e

45. Unordered Ordered
P
r P
e
p l
a a
r n
e

46. Unordered Ordered
E
n
t G M
r e a
e n n
p e a
r r g
e a e
n l r
e
u
r

47. Ideal team sizes
Complex Complicated
< 30 People < 150 People
< 7 People > 150 People
Chaotic Simple

48. Not Black and White
Complex Complicated
Create Create
market buzz sales comp
plan
Write
Increase terms of
signups service
Disorder
Secure Order ;
hacked office supplies
server
Chaotic Simple
Unordered Ordered

49. Market Dynamics
Complex Complicated
Product/market fit
Disorder
Chaotic Simple
Unordered Ordered

50. What to do
Execute
Brown,;Tim;(2009?09?16).;Change;by;Design;(Kindle;LocaPon;1984).;Harper;Collins,;Inc..;Kindle;EdiPon.;;

51. Example – Rideorama

54. Brown,;Tim;(2009?09?16).;Change;by;Design;(Kindle;LocaPon;1984).;Harper;Collins,;Inc..;Kindle;EdiPon.;;

55. Market Dynamics
Complex Complicated
Chaotic Simple
Unordered Ordered

57. h"p://www.flickr.com/photos/virtualeyesee/6107062655;

58. Create a plan to
predict the future

59. h"p://www.flickr.com/photos/isaacmao/380257543;

63. Market research
Product definition
Product requirements
Detailed plan
Alpha release
Beta release
Final release
FIRST CONTACT WITH CUSTOMERS

64. Market research
Product definition
Product requirements
Detailed plan
Alpha release
Beta release
Final release
FIRST CONTACT WITH CUSTOMERS

65. Market research
Product definition
Product requirements
Detailed plan
Alpha release
Beta release
Final release
FIRST CONTACT WITH CUSTOMERS

66. Market research
Product definition
Product requirements
Detailed plan
Alpha release
Beta release
Final release
FIRST CONTACT WITH CUSTOMERS

67. Market research
Product definition
Product requirements
Detailed plan
Alpha release
Beta release
Final release
FIRST CONTACT WITH CUSTOMERS

68. Market research
Product definition
Product requirements
Detailed plan
Alpha release
Beta release
Final release
FIRST CONTACT WITH CUSTOMERS

69. Market research
Product definition
Product requirements
Detailed plan
Alpha release
Beta release
Final release
FIRST CONTACT WITH CUSTOMERS

70. HOW MANY GUESSES?

71. FIRST CONTACT WITH
POTENTIAL CUSTOMERS

74. h"p://www.flickr.com/photos/oregondot/4132135156;

75. Create
an environment
to discover the future

76. How?

78. Entrepreneurship
Vision; Culture
Business;Model;
Frame Frame Frame Frame
Build & Ship
Build & Ship
Build & Ship
Build & Ship
Learn
Learn
Learn
Learn
Test & Measure Test & Measure Test & Measure Test & Measure

79. Disciplined way to
turn all these guesses
into knowledge

80. h"p://www.richard?feynman.net/gallery.htm;

82. TAKE EACH MAJOR GUESS

83. RUN AN EXPERIMENT

84. h"p://www.youtube.com/watch?v=Iyjs3zeoSrM;

85. How do I run
meaningful
experiments?

89. Maximize learning – Don Reinertsen
http://jchyip.blogspot.com/2010/05/lean-software-and-systems-conference.html

90. What could go wrong
with that?

92. Vision
h"p://www.flickr.com/photos/klearchos/4541072707;

93. Lean Startup
Customer Development

94. Explore Execute
h"p://www.slideshare.net/sblank/the?startup?owners?manual?sxsw?11954724;

95. Explore
h"p://www.slideshare.net/sblank/the?startup?owners?manual?sxsw?11954724;

96. Frame Frame
Build & Ship
Build & Ship
Learn
Learn
Test & Measure Test & Measure
Explore h"p://www.slideshare.net/sblank/the?startup?owners?manual?sxsw?11954724;

97. Startups are NOT
smaller versions
of big companies

98. Discover and solve
customer’s problem

99. “Get out of
the building!”
Steve Blank

100. “Meaning
emerges through
interaction”
Dave Snowden

101. Explore
h"p://www.slideshare.net/sblank/the?startup?owners?manual?sxsw?11954724;

102. Business Model

115. Example – iPod

116. + Margin & Profit
Walkman for
the digital age
Design, Manufacturing,
Marketing, Support
h"p://www.flickr.com/photos/mrmonochrome/93535053; h"p://www.flickr.com/photos/75001512@N00/4683351383;

117. h"p://www.flickr.com/photos/virtualeyesee/6107062655;

118. First big guess:
We understand the
problem a customer
wants solved

120. Who is
feeling the pain?

121. What pain
are they feeling?

122. How do they make
that pain go away
today?

123. “Customers don’t care
about your solution.
They care about their
problems.
Dave McClure

124. h"p://www.flickr.com/photos/adacPo/2535502416;

125. Typical
market research:
Customer
attributes

126. h"p://www.flickr.com/photos/serpicolugnut/172616929;

127. Innovation
market research:
Customer
circumstances

128. h"p://www.flickr.com/photos/serpicolugnut/172616929;

129. h"p://www.flickr.com/photos/indigoprime/2481346616;

130. h"p://www.flickr.com/photos/twostoutmonks/664314897;

131. Milkshake Test
What job is
your solution being
hired to perform?

132. Problem Interview Overview
Running Lean by Ash Maurya, page 118.

134. Example - Iridium

135. 1987

136. 1987 1999
$5.2 B

137. 1987 1999
$5.2 B
30,000 not 42M

138. 1987 1999
$5.2 B
30,000 not 42M
Sold for $25M

139. Next big guess:
Our product
solves the customer’s
job to be done

141. Test your
low fidelity Minimum
Viable Product

142. Solution Interview Overview
Running Lean by Ash Maurya, page 142.

143. Limited access
to a rough prototype

145. Example - $40 MVP

146. Next big guess:
Our business model
can be profitable

148. Explore
h"p://www.slideshare.net/sblank/the?startup?owners?manual?sxsw?11954724;

149. Explore
h"p://www.slideshare.net/sblank/the?startup?owners?manual?sxsw?11954724;

150. Next big guess:
We can sell our offer
or
We can acquire
and retain users

152. Sell to
Earlyvangelists

154. Next guess:
We know how to
position our product

155. Product Positioning
For (target customers)
Who (have the following problem)
The (product name) is a (describe the
product or solution)
That provides (key benefit)
Unlike (reference competition),
The product/solution (describe the key
point of competitive differentiation)

156. Next guess:
We have the right tools
to close customers

158. Next guess:
We can acquire and
activate customers

159. Sales Funnel
h"p://www.flickr.com/photos/carlagates247/5524789016;

160. Activation Funnel
h"p://www.flickr.com/photos/500hats/577630547;

161. Activation Funnel
h"p://www.flickr.com/photos/500hats/577630651;

162. Product Roadmap
8/31/10; 10/30/10; 1/?/11; 3/?/11;
Release 1 Release 2 Release 3 Release 4
Theme: UI Theme: Reporting Theme: Dashboards Theme: Admin
For X, this UI release For <who>, this release For <who>, this release For <who>, this release
provides <what value> provides <what value> provides <what value> provides <what value>
Key Features: Key Features: Key Features: Key Features:
1. Feature A 4. Feature B’ 7. Feature B’’ 10. Feature F
2. Feature B 5. Feature C’ 8. Feature D’ 11. Feature G
3. Feature C 6. Feature D 9. Feature E

163. Next guess:
We have a
valuable product

164. Get out and sell

165. h"p://www.flickr.com/photos/Pnfoilraccoon/5555060858;

167. Pivot
or
Persevere?

168. Execute
h"p://www.slideshare.net/sblank/the?startup?owners?manual?sxsw?11954724;

169. Explore Execute
h"p://www.slideshare.net/sblank/the?startup?owners?manual?sxsw?11954724;

170. Culture

171. Democratize data

172. Distribute
decision making

173. Diversity
Independence
Decentralization
Aggregation

174. No blame or shame

175. Example

177. Don’t squander
your time

178. building
the wrong business

179. Do what you love

180. Love what you do

182. Books that informed this talk

183. People who informed this talk
David Max Ash Clayton
Snowden Boisot Maurya Christensen
Frank H. Eric
Knight Ries
Geoffrey Steve
Moore Blank

184. h"p://www.flickr.com/photos/fla"op341/224597838;

185. @zachnies