How to Identify a lean startup

How to Identify a lean startup
HOW TO IDENTIFY A LEAN STARTUP ASH MAURYA @ashmaurya http://www.ashmaurya.com
The sad statistics of Plan A
58 new product ideas to get one successful product.
9/10 startups fail.
66% change their original plans drastically.
Not better Plan A. But a path to a plan that works.
Lean Startup is a rigorous process for iterating from Plan A to a plan that works.
Agenda 1. What is a Lean Startup? 2. What does a Lean Startup look like? 3. How you can use Lean to define and measure progress
Don’t let me be misunderstood We’re Lean because: - we got a great deal on our furniture! - we surveyed all our customers and found that… - we’ve implemented continuous deployment!
So, what then is a Lean Startup?
A Lean Startup is about speed Startups that succeed are those that manage to iterate enough times before running out of resources. - Eric Ries
A Lean Startup is about validated learning Get out of the building. - Steve Blank
A Lean Startup is about focus Right Action, Right Time - Bijoy Goswami
Create a business model versus a business plan Business Model vs Business Plan
Create a business model versus a business plan Business Model vs Business Plan A document investors make you write that they don’t read
Create a business model versus a business plan Business Model vs Business Plan A single diagram of your business
Start with worksheets 1. WHAT: Problem What is the problem you are trying to solve? 2. WHO: Customer Who has the problem? 3. HOW: Product/Market How do you solve this problem? How big is this market? How are you going to reach this customer? How do you drive demand? How will you make money?
Then get it down tighter 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 worth Key Activity buying Channels Activity that drives Path to customers retention/revenue Cost Structure Revenue Streams Customer Acquisition Costs Revenue Model Distribution Costs Life Time Value Hosting Revenue People, etc. Gross Margin
3 stages of a startup Problem/Solution Product/Market Scale Fit Fit
Validate Problem/Solution Fit Problem/Solution Product/Market Scale Fit Fit Do I have a problem worth solving?
Problem/Solution Fit - Lean Canvas P S UVP UA CS 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 worth buying KA CH Activity that drives Path to customers retention/revenue C$ R$ Customer Acquisition Costs Revenue Model Distribution Costs Life Time Value Hosting Revenue People, etc. Gross Margin
Achieve Product/Market Fit Problem/Solution Product/Market Scale Fit Fit Have I built something people want?
Product development gets in the way of learning Some learning Most learning happens here Requirements Development QA Release Very little learning
Involve customers throughout product dev Continuous Requirements Release Deployment Customer Customer Discovery Validation
Product/Market Fit - Lean Canvas P S UVP UA CS 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 worth buying KA CH Activity that drives Path to customers retention/revenue C$ R$ Customer Acquisition Costs Revenue Model Distribution Costs Life Time Value Hosting Revenue People, etc. Gross Margin
Optimize for Scale Problem/Solution Product/Market Scale Fit Fit How do I accelerate growth?
Scale - Lean Canvas P S UVP UA CS 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 worth buying KA CH Activity that drives Path to customers retention/revenue C$ R$ Customer Acquisition Costs Revenue Model Distribution Costs Life Time Value Hosting Revenue People, etc. Gross Margin
Before Product/Market Fit Problem/Solution Product/Market Scale Fit Fit Validated Learning Pivots
After Product/Market Fit Problem/Solution Product/Market Scale Fit Fit Validated Learning Growth Pivots Optimizations
Start with what matters P S UVP UA CS 1. Problem #1 1. Feature #1 1. Founders 2. Problem #2 2. Feature #2 2. Marketers 3. Problem #3 3. Feature #3 KA CH C$ R$
But also tackle the riskiest parts early P S UVP UA CS 1. Problem #1 1. Feature #1 Something that 1. Founders 2. Problem #2 2. Feature #2 cannot be copied 2. Marketers 3. Problem #3 3. Feature #3 or bought. KA CH 1. Personal Authority 2. Website C$ R$ Subscription Model: $49/mo
Formulate falsifiable hypotheses Leap of Faith: Being known as an “expert” will drive early adopters Hypothesis: Blog post will drive >100 early sign-ups
Build accessible dashboards
Make the results auditable
Run board meetings in a lessons learned format Q2 2010 We thought (Hypotheses): 50 $20K • Personal Authority would be a viable channel to early adopters • Customers would vote the problem as “must-have” 37.5 $15K • Customers would pay $49/mo Our Customers told us (Insights): 25 $10K • Most early adopters did come through blog and twitter • Customers voted #3 problem as “must- 12.5 $5K have”. Others as nice-to-have • $49/mo works for customers with early traction 0 $0 Next Steps (Future Experiments): Jan Feb Mar Apr May June July • Test MVP based on “must-have” problem • Test a Freemium model
Lean Startup is a rigorous process for iterating from Plan A to a plan that works.
Thanks! Ash Maurya twitter: ashmaurya blog: http://www.ashmaurya.com Running Lean - the book How to pivot your web application to product/market fit http://www.RunningLeanHQ.com

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