5. Most Startups Fail But it doesn’t have to be that way. We can do better. This talk is about how.
6. What is a startup? A startup is a human institution designed to deliver a new product or service under conditions of extreme uncertainty. Nothing to do with size of company, sector of the economy, or industry
7. The Pivot What do successful startups have in common? They started out as digital cash for PDAs, but evolved into online payments for eBay. They started building BASIC interpreters, but evolved into the world's largest operating systems monopoly. They were shocked to discover their online games company was actually a photo-sharing site. Pivot: change directions but stay grounded in what we’ve learned. http://startuplessonslearned.blogspot.com/2009/06/pivot-dont-jump-to-new-vision.html
8. Speed Wins if we can reduce the time between major iterations we can increase our odds of success
13. A good plan? Start a company with a compelling long-term vision. Raise plenty of capital. Hire the absolute best and the brightest. Hire an experienced management team with tons of startup experience. Focus on quality. Build a world-class technology platform. Build buzz in the press and blogosphere.
14. Achieving Failure Company failed utterly, $40MM and five years of pain. Crippled by “shadow beliefs” that destroyed the effort of all those smart people.
18. A good plan? Start a company with a compelling long-term vision. Raise plenty of capital. Hire the absolute best and the brightest. Hire an experienced management team with tons of startup experience. Focus on quality. Build a world-class technology platform. Build buzz in the press and blogosphere.
22. New plan Shipped in six months – a horribly buggy beta product Charged from day one Shipped multiple times a day (by 2008, on average 50 times a day) No PR, no launch Results 2009: profitable, revenue > $20MM
23. Lean Startups Go Faster Commodity technology stack, highly leveraged (free/open source, user-generated content, SEM). Customer development – find out what customers want before you build it. Agile (lean) product development – but tuned to the startup condition.
32. Agile Product Development Unit of Progress: A line of Working Code “Product Owner” or in-house customer Problem: known Solution: unknown
33. Product Development at Lean Startup Unit of Progress: Validated Learning About Customers ($$$) Customer Development Hypotheses, Experiments, Insights Problem: unknown Data, Feedback, Insights Solution: unknown
35. There’s much more… IDEAS Code Faster Learn Faster BUILD LEARN Unit Tests Usability Tests Continuous Integration Incremental Deployment Free & Open-Source Components Cloud Computing Cluster Immune System Just-in-time Scalability Refactoring Developer Sandbox Minimum Viable Product Split Tests Customer Interviews Customer Development Five Whys Root Cause Analysis Customer Advisory Board Falsifiable Hypotheses Product Owner Accountability Customer Archetypes Cross-functional Teams Semi-autonomous Teams Smoke Tests CODE DATA Measure Faster MEASURE Split Tests Clear Product Owner Continuous Deployment Usability Tests Real-time Monitoring Customer Liaison Funnel Analysis Cohort Analysis Net Promoter Score Search Engine Marketing Real-Time Alerting Predictive Monitoring
36. There’s much more… Startup Lessons Learned (season one 2008-2009) Every essay from the blog’s first year Beta version available for the first time today http://bit.ly/SLLbookbeta
67. Possible Approaches “Maximize chances of success” Build a great product with many features that increase the odds that customers will want it Problem: no feedback until the end, might be too late to adjust “Release early, release often” Get as much feedback as possible, as soon as possible Problem: run around in circles, chasing what customers think they want
68. Minimum Viable Product The minimum set of features needed to learn from earlyvangelists – visionary early adopters Avoid building products that nobody wants Maximize the learning per dollar spent Get the facts before it’s too late Probably much more minimum than you think!
69. Minimum Viable Product Visionary customers can “fill in the gaps” on missing features, if the product solves a real problem Allows us to achieve a big vision in small increments without going in circles Requires a commitment to iteration
70. Fears False negative: “customers would have liked the full product, but the MVP sucks, so we abandoned the vision” Visionary complex: “but customers don’t know what they want!” Too busy to learn: “it would be faster to just build it right, all this measuring distracts from delighting customers”
72. Don’t Launch What is a launch? Marketing Launch Announce a new product, start its PR campaign, and engage in buzz marketing activities. Product Launch Make a new product available to customers in the general public.
73. Effects of Marketing Launch Drive customers into your sales pipeline Establish credibility with potential partners Help you raise money … however …
74. Other Consequences A marketing launch establishes your positioning Waste customers on a non-working business model You never get a second chance to launch
75. Why do we launch? Investors push for it (ego?) Founders push for it (ego?) Fear of the accidental launch Instead: build a Minimum Viable Product, establish small but renewable audience, iterate iterate iterate
76. Know When to Launch When you have a strategy for the launch Know the success metrics Know your fundamental driver of growth Know where, when, and how to launch Launch when you can predict the future
77. Five Whys IDEAS Code Faster Learn Faster BUILD LEARN Continuous Deployment Five Whys Root Cause Analysis CODE DATA Measure Faster MEASURE Rapid Split Tests
82. There’s much more… IDEAS Code Faster Learn Faster BUILD LEARN Unit Tests Usability Tests Continuous Integration Incremental Deployment Free & Open-Source Components Cloud Computing Cluster Immune System Just-in-time Scalability Refactoring Developer Sandbox Minimum Viable Product Split Tests Customer Interviews Customer Development Five Whys Root Cause Analysis Customer Advisory Board Falsifiable Hypotheses Product Owner Accountability Customer Archetypes Cross-functional Teams Semi-autonomous Teams Smoke Tests CODE DATA Measure Faster MEASURE Split Tests Clear Product Owner Continuous Deployment Usability Tests Real-time Monitoring Customer Liaison Funnel Analysis Cohort Analysis Net Promoter Score Search Engine Marketing Real-Time Alerting Predictive Monitoring
83. There’s much more… Startup Lessons Learned (season one 2008-2009) Every essay from the blog’s first year Beta version available for the first time today http://bit.ly/SLLbookbeta
92. Rapid Split Tests IDEAS Code Faster Learn Faster BUILD LEARN Continuous Deployment Five Whys Root Cause Analysis CODE DATA Measure Faster MEASURE Rapid Split Tests
93. Split-testing all the time A/B testing is key to validating your hypotheses Has to be simple enough for everyone to use and understand it Make creating a split-test no more than one line of code: if( setup_experiment(...) == "control" ) { // do it the old way } else { // do it the new way }
94. The AAA’s of Metrics Actionable Accessible Auditable
95. Measure the Macro Always look at cohort-based metrics over time Split-test the small, measure the large
