1. What is a startup?
2. What is a lean startup?
3. How do lean startups operate?
4. What do lean startups believe?
Presented to the Asia Pacific Leadership Program at the East West Center, Octobe4, 2014.
3. What is a startup?
“A startup is an organization
formed to search for a repeatable
and scalable business model.”
- Steve Blank
Source: http://steveblank.com/2010/01/25/whats-a-startup-first-principles/
4. Let’s unpack that definition
A startup is an organization
formed to search for a repeatable
and scalable business model.
-Steve Blank
Source: http://steveblank.com/2010/01/25/whats-a-startup-first-principles/
5. So what is not a startup?
● A small business is not a startup
● A large company is not a startup
● Non-profits and govts are not startups
6. So what is not a startup?
● A small business is not a startup
● A large company is not a startup
● Non profits and govts are not startups
● But all of these organizations can
learn from startups!
7. Why should you care about startups?
● You might want to start one!
● You might want to work for one
● You might need to engage with them
● You can definitely learn from them
8. What can you learn from startups?
● How to deal with uncertainty
● How to work with limited resources
● How to create something genuinely new
10. What is a lean startup?
"Lean Startup" is a system for
developing a business or product in
the most efficient way possible to
reduce the risk of failure.”
Source: http://leanstartup.pbworks.com/w/page/65946049/Intro%20to%20Lean%20Startup
11. Let’s unpack that definition
● Startups are extremely risky
● Lean startup is not about removing risk, it
is about managing risk
● Lean startups manage risk by linking
“investment” (quantum of risk) to
validation (risk reduction)
13. Where does it really come from?
● Lean manufacturing (Toyota)
● Agile development (Many folks)
● Innovation theory (C. Christensen)
● Customer development theory (S. Blank)
14. What is lean startup responding to?
PETS.COM NASDAQ 2000 - 2002
15. How is lean startup different?
● Engage with customers immediately
● Launch fast and iterate
● Set clear milestones for “investment”
● Change direction as needed
● Treat every aspect of the startup as a
hypothesis that needs to be proven
20. Customer Development
● Formal technique for engaging with
customers prior to product development
● Generally starts with interviews (problem
or solution) cf Steve Blank
● Can also include various online tests and
experiments before building a product
25. Problem/Solution Fit
● The output of a successful customer
development cycle
● Confirmation of:
○ a well defined customer segment
○ a real problem that the customer has
○ a plausible solution to that problem
33. Pivoting
● Orderly response to “failure”
● Product pivots - zoom in, out
● Customer pivots - zoom in, out, switch
● Other pivots - channel, platform etc.
● The smaller/faster the pivot the better
● The bigger the pivot, the more painful
38. Product/Market Fit
● The only thing that matters
● Roughly corresponds to confirmation of a
scalable business model
● Does not correspond to profitability
● Lots of argument about how to define it
● Will trigger funding for scale/efficiency
41. A/B Testing
● Long time marketing technique embraced
by lean startups
● More about incremental improvement
● Becomes extremely relevant after
product/market fit
45. Lean Startup beat “fat” startups
“Fat” Startups Lean Startups
Pre launch Stealth mode Landing page
Product Fully featured MVP
Initial Investment Large Small
Risk Super high Moderate
Note - that said, sometimes fat is the way to go
46. Startups are not like big companies,
so they should not act like them
Big Company Startup
Customer Knows its customer Not sure about its customer
Product Mature product Immature product
Innovation Incremental Disruptive
Learning speed Slow Fast
47. Startups are learning organizations
● A startup is a series of hypothesis
● The goal of the startup is to move from
hypothesis to fact
● The customer is the only source of facts
● The measure of an early stage startup is
the speed at which it produces facts