Lean Startup Presentation + 2 Hours of Team Breakouts to solve a problem and create a business.

1. Lean Startup
Ryan D. Hatch
October 2014
rdkhatch
#LeanStartup

2. Lean Startup
Ryan D. Hatch
October 2014
rdkhatch
#LeanStartup
1. Crash Course in Lean Startup
2. Team Collaboration Workshop

3. About Ryan
Family & Background

4. About Ryan
 Co-Founder, Dynamis
 Recovering Developer
 Lean Product Strategy & Agile Coach
 Focused on Innovation, Software Startups
 Helping teams accelerate new product growth

5. How Not to Waste Your Life
Provide Value to Others
Higher Rates of Startup Success.

6. Story Time
Gold Ore Mining
Meet Jim

7. Story Time
Jim’s
Company

8. Gold Ore Mining
Built Mine Price Drop

9. Gold is invisible.
only
1 oz gold
63 tons of rock. Long, expensive process.
Challenge: Must find rocks with highest value.

10. Jim Burnell
holding his X-ray gun
Fast Feedback. Before Investing.

11. Fast-Feedback Innovation
Jim Burnell
holding his X-ray gun
Create Value
Playing by a new set of rules.
Fast Feedback. Before Investing.

12. Small teams can beat big teams
Use Fast-feedback Innovation –To play by a new set of rules.

13. My Startup - Dynamis

14. My Startup Experience
 After several startup failures, 4 co-founders
 Started in 2009 - Help Employers Optimize Health Insurance Benefits
 Early Success & Struggles. Had 5 early adopter customers.
 Funded by Golden Angels, Spring 2012. CEO, CTO duo.
 Product Owner – v2 Replatform – MVP for new customers
 Customer Problem & Solution Interviews. Lost Sales Interviews.
 Small, High-Impact Team
 Focused on Return on Investment
 Cash Burn Rate & Sales Transparency
 Customer Success kicking into gear
“This will double my business in 1 year.”
“Closed 9/10 Deals”
“Please don’t tell my competitors”
Customer success being featured at tradeshows

15. Mockups
Customer Hack
Actual Application
How well would this
solve your problem?

16. Customer Types in Product Lifecycle
Crossing the Chasm, Geoffrey Moore
Customer
Goal

17. Why Lean Startup?
Rockets, Risks, and Hockeysticks

18. 1.) Idea to Team building an awesome product

19. 2.) Launch like Rockets & Hockeysticks

20. 3.) Dominate

21. Reality check. 90% of New Concepts Fail.

22. Don’t Make These
Same Mistakes
Startup Failures to Learn From

23. Myth: Build it. And they will come.
Truth
No business survives first contact with customers.
You build it, and no one cares.
Customers are often biggest risk. Not Technology.
Product development is a discovery process.
Sell before you Build.

24. Myth: It’s all about Execution
Truth
Achieving Failure =
Successfully executing a flawed plan.
Startups don’t know enough to just execute.

25. No Proxies for Paying Customers
 Successful people who believe in & mentor you
 Networking with other Entrepreneurs
 Board of Director at National Realtor Association
 Board of Advisors at Wyndham Hotels
 Partnering with 2x PhD’s
 Building Talented Teams & Working Together
 Creating New Products
 Free Trials
 Beautiful marketing & UI
 College Interns
 Exceptional New Technology
 Multiple Patent Applications
 Business Plan Contest
 Multiple Pilot Programs
 Busiest booth at trade shows
 Featured Articles in National magazines
 Friends with top industry leaders
 Awards in National publications

26. False Shadow Beliefs - Unspoken
Reality Distortion Field
 “We know what customers want”
 “We can accurately predict the future”
 “Executing the plan is progress”

27. Approaches to
New Product Development

28. Uncertainty grows into Future

29. Long-term planning is… Guessing

30. Traditional New Products - Waterfall
Business Model: Known Solution: Known
Business Plan
Raise Capital
Requirements
Design
Development
Testing
Sales

31. Business Model: Unknown Solution: Unknown
?
Agile Product Development

32. Business Model: Unknown Solution: Unknown
Customer Development Agile Product Development
Sales

33. Lean Startup

34. What is a Startup?
 Temporary organization
 Searching for a Repeatable, Scalable Business Model
 Environment of uncertainty
 Not a small version of a large company
 No VP of xyz
 No Sales Department

35. You’re not building a Product
You’re building a Business.

36. Key Benefits of Lean Startup
 Process for startups to follow
 Learn very fast what people will buy & use.
 Start selling as soon as possible.
 Eliminates Risk Early.
 Uses data to seek truth & avoid opinions / politics
 Get more Swings at bat.
 Minimizes cash burn rate.
 Scales at the right time.
 Much higher rates of success.

37. Customer Development
Customer Sales
& Usage
Customer
Input
Get to Customer Sales as fast as possible

38. Living Document

39. No Facts are inside your building
The Answers are outside.

40. Homeology – 2014 Chicago Lean Startup Challenge

41. Homeology – 2014 Chicago Lean Startup Challenge
Concept to Revenue in 90 days
$10,000 revenue + $17,000 sales pipeline

42. Run Science Experiments - To Learn as Fast as possible
ramlijohn.com

43. Highest Paid Person’s Opinion

45. Don’t Delay Failure.
Test your Assumptions.
Get to Business Failure Fast.
And Learn what to Fix.

46. Ok, I get it. I want some.
Most people just want to sound cool.
Tired of Buzz words & Fluffy pictures?
Stop using the Buzz words.
Start applying Lean Startup.

47. Myths of Lean Startup

48. Race to Learning

49. Breakeven Burndown Running out of Cash & Time
$
Time (Runway)
Burn Rate
Profit
Death
* plus variable costs

50. Race to Scalable Business Model
$
Time (Runway)
Burn Rate
Scalable Business Model
Death

51. Multiple Funding Rounds
$
Time (Runway)
Burn Rate
Death
Profit
* plus variable costs
Scalable
Business
Model

52. High Value Problem Have I found customers with a problem worth solving?
Solution Commitment
Scalable Solution
10 Customers 100 Customers
Scale
Are customers committed to my proposed solution?
Have I developed a Scalable Business Model?
Let’s throw money at this puppy
Roadmap
custdevframework.com

53. Investment Portfolio

54. High Value Problem
Have I found customers
with a problem worth solving?
High Value Problem
Solution Commitment
Scalable Solution
10 Customers 100 Customers
Scale

55. This is not about You. Get to know your Customers.

56. Discover Problems: Customer Discovery Interviews
 What are your goals for the next year?
 What could make the biggest impact on accomplishing those goals?
 What are the barriers you are encountering?
 How are you solving today?
Customer
Goals /
Job to be done
Barriers / Problems
/
Unsatisfied Outcomes

57. Jobs to be Done.
Job > Technology
Job: Portable Music

58. Jobs to be Done.
Job > Customer Profile

59. Ecosystem of Target Customer
B2B B2C
Raw Materials
Cash
Product

60. Ecosystem of Target Customer
Understanding the customer
Allowed 3X the Price!

61. Problem Interviews
 Everyone is Lying to you - including your Mom!
 The Mom Test = Would your mom tell you the truth?
 Never talk about your solution ideas.
 Ask specifics about the past.
 Prioritize: Rank this problem more important / less important
 What would a solution allow you to achieve? What impact value to business?
 Have you tried to solve in the past? If so, How?
 Was there a budget set?

62. Creative Problem Interviews
Fake Ad

63. Gated Outcomes
 12 Customers confirmed Problem
 Ranked Problem as MUST HAVE
 Ranked Outcomes
 Market is large & accessible enough.
High Value Problem
Solution Commitment
Scalable Solution
10 Customers 100 Customers
Scale

64. Solution Commitment
What is the minimum proposed solution
customers will commit to?
High Value Problem
Solution Commitment
Scalable Solution
10 Customers 100 Customers
Scale

65. Solution Interviews
1. Problem Confirmation
2. Usage Scenarios = Feature Validation
Event:
Question:
Player:
Action:
When asleep at night
Would you & your family feel more safe
If we provided a device to
Monitor your home for carbon monoxide gas and
woke you up in case of an emergency?
3. Demo - Low Fidelity MVP (Minimum Features necessary)
4. How well would your problem be solved with this solution?
5. Pricing Never ask what people will pay!
6. Ask for Commitment!

66. Non-Scalable MVP

67. Non-Scalable MVP

68. Non-Scalable MVP
 Ad words + Landing Pages
 Video MVP
 Clickable Mockups MVP
 App demo MVP
 Wizard of Oz MVP
 Concierge MVP
 No code MVP
 Pre-orders, Capture Commitments!
 Non-Scalable Sales!
 Start Removing Features!

69. Gated Outcomes
 Quantified Problem Value to Buyer
 Minimum Solution will solve Problem
 Validated Pricing
 Customer Success
 5 Early Adopters paying for Non-Scalable MVP
 Am I ready to COMMIT to making this go?
High Value Problem
Solution Commitment
Scalable Solution
10 Customers 100 Customers
Scale

70. Scalable Solution
Can I mold this into
a Scalable Business Model?
High Value Problem
Solution Commitment
Scalable Solution
10 Customers 100 Customers
Scale

71. Scalable MVP
Source: @smarty

72. Scalable MVP
MVP = ?

73. Scalable MVP
MVP

74. Metrics that Matter

75. Customer Success – Value Hypothesis
Net Promoter Score
Achieving the
Value Proposition?

76. Growth Hypothesis

77. Continuous Delivery
source: CollabNet
Development Production

78. Scalable MVP
 High-Fidelity
 Silent Launch
 Split A/B Tests
 Fake Door / Mock Features
 Sales & Marketing Positioning
 All aspects of Business Model

79. Business Learning Sprints
franciscopalao.com

80. Innovation Accounting
 Growth Hacking Experiments
 Flow Metrics
 # of Customer Interviews
 # of Hypotheses Tested

81. Pivot, Persevere, or Reboot?
The Point Instant Messaging Plug-in
Social community Fundraising

82. Gated Outcomes
 Paying customers (100+)
 Repeatable Sales Roadmap
 Scalable Business Model
High Value Problem
Solution Commitment
Scalable Solution
10 Customers 100 Customers
Scale
Customer
acquisition
cost
Revenue
per
customer
exceeds

83. Myth: I must be the Hero
Truth
Share your struggles.
Transparency sets you free from the hero burden
Builds Trust
Team effort – Let’s solve this together.
Be fair to employees & their families.

84. Do This Next

85. Do this Next
1. Persona & Lean Canvas
2. Rank Highest-Risk Assumptions
3. Identify fastest test possible.

86. Launch Weekend
Scalable Business

87. Test for Value. Then Execute.

88. Lean Startup
Ryan D. Hatch
October 2014
rdkhatch
#LeanStartup

89. Biobreak
source podiohelp.com

90. Activate Lean Startup
Collaboration
source podiohelp.com

91. Persona Canvas
Feel – Empthy
Think about the Job trying to be Done
Why?

92. Lean Canvas

93. LeanStartup Kanban
Core Assumptions Experiment Design Test In-Progress Validated Learning

94. Break into Teams
5-second introductions
Name, From, I’m in session Because…
Max 5 per Team

95. Select Problem
clipartist.info

96. Education / Employment Gap
Problem #1 source: skai.gr

97. Truck Driver Turnover @ 93%
Minimize Freight Cost
Problem #2 source: ata

98. Irrigation Circles cause land loss
Maximize Fertile Soil
Problem #3 source: markzackpaints

99. Wife says I’m Clueless. I am.
Maximize Ease of Cooking
Problem #4 source: nexxtlevelup.com

100. Select Problem

101. Post-it Guidelines
Use the Post-its!
1 Primary thought per Post-it
Don’t waste
source podiohelp.com

102. Identify Potential Customer
Who has the Pain?
Feel – Empthy
Think about the Job trying to be Done
Why?

103. Persona Canvas
Feel – Empthy
Think about the Job trying to be Done
Why?

104. Proposed Solution
source podiohelp.com
Intended to be Fun
Can be Funny, Ridiculous
Not restricted in any way
No Technology constraints
No Resource or Financial constraints

105. Lean Canvas

106. 1.) Move Persona Facts onto Customer Segments
2.) Move Persona Goals & Pains onto Problem
3.) Early Adopters
4.) Existing Alternatives

110. Dude, Congrats on your Business Model!

111. Hypothesis Backlog
Core Assumptions & Highest Risks
source podiohelp.com
Customer, Market, Revenue,
Distribution, Cost, Technology, etc.

112. LeanStartup Kanban
Core Assumptions Experiment Design Test In-Progress Validated Learning

113. Prioritize the 3 Highest Risks
source podiohelp.com

114. LeanStartup Kanban
Core Assumptions Experiment Design Test In-Progress Validated Learning

115. Determine How to Test 3 Highest Risks
as Fast as possible
source podiohelp.com

116. LeanStartup Kanban
Core Assumptions Experiment Design Test In-Progress Validated Learning

117. Lean Startup
Ryan D. Hatch
October 2014
rdkhatch
#LeanStartup