The document discusses the lean startup methodology. It explains that a startup is an organization formed to search for a repeatable and scalable business model. The lean startup approach is an iterative process that helps reduce risks in this search through validated learning. There are three key principles: 1) document the initial plan, 2) identify the riskiest assumptions, and 3) systematically test those assumptions. This is done through developing minimum viable products or experiments and getting customer feedback to falsify assumptions and guide pivots, with the goal of accelerating learning to find a sustainable business model.
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Getting lean startup - quick reference guide
1. âAre you designing an amazing solution
that solves no problem?â
- Franki Chamaki
Franki Chamaki
2. Trends and threats put push on usâŚ
Constant connectivity, collaboration and
crowdsourcing, customised consumption,
cloud computing, convergence and
competitor pressures
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3. Traditional way to secure funds and bring
ideas to market
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11. Start up Transition CompanyStart up Company
Problem/
Situation
Fit
Scale
Transition
Product/
Market
Fit
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12. 12
Do we have
a problem
worth
solving?
Have we
built
something
people
want?
How do
we
accelerate
growth?
Start up Transition CompanyStart up Company
Problem/
Situation
Fit
Scale
Transition
Product/
Market
Fit
Franki Chamaki 12
13. 13
Start up Transition CompanyStart up Company
Problem/
Situation
Fit
Scale
Transition
Product/
Market
Fit
Focus:
Validated learning
Process:
Pivots
Focus:
Growth
Process:
Optimization
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24. 24
1. Document our plan âAâ
http://www.ashmaurya.com/2012/02/why-lean-canvas author of Running Lean
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25. 25
What are the product, customer and
market risks?
2. Identify the riskiest parts of plan
p p p m
mm
m
c
c
cp
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26. 26
Problem interviews
Validate top problems? Any new
problems? Rank the problems? How they
solve it today?
2. Identify the riskiest parts of plan
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27. 27
Solution interviews
Does it resonate? What most important?
Missing? Add? Remove? Will they pay $X?
2. Identify the riskiest parts of plan
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31. 31
How do we actually test our riskiest
assumptions?
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32. 32
Minimum Viable Product (MVP) is a
minimum set of solution features we
can use to test.
But its really more likeâŚ
MVE - minimum viable
experiment
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33. 33
Minimum Viable Product (MVP) is a
minimum set of solution features we
can use to test
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34. 34
We test our MVP by making falsifiable
statements rather the leap of faith
assumption
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35. 35
It gives us the permission to move
forward
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36. A
36
People will be interested in renting their physical
space to unrelated people?
Launch page will drive 500 sign up?B
Falsifiable hypothesis:
OR
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40. 40
Target âearlier adaptorsâ (e.g. car
enthusiasts and owners of classic and
vintage cars in the key city areas (eg
Potts Point)
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41. We will validate the problem and
customer of your idea!
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Got a great idea ď brainstorm ď business plan ď pitch ď cha-chingď build an awesome product (and in sleuth mode) booom! ď Big launch! Yay!!
Got a great idea ď brainstorm ď business plan ď pitch ď cha-chingď build an awesome product (and in sleuth mode) booom! ď Big launch! Yay!!
Got a great idea ď brainstorm ď business plan ď pitch ď cha-chingď build an awesome product (and in sleuth mode) booom! ď Big launch! Yay!!
Traditional view in has been to prepare âBusiness Planâ but no business plan survives first contact with customers. Why? Its based on series invalidated assumptions from solution right through to customer how it would be distributed.1.Problem â list the top one to three problems need to be solved? How are their solved today? Existing alternatives?2. Customer Segment â who are we solving it for? Who are the early adopters - main segment to solve firstâ3. UVP - Why are we different and worth getting peopleâs attention? High level pitch - getting the idea across quickly âAliens: Jaws in spaceâ , Star wars âcowboys and Indians in spaceâ4. Solution - how we are going to solve the problem5, Channels- very important â the path to customers (ie inbound â blogs, SEO vs outbound SEM, ads, cold calling)6. Revenue stream â how going to charge and make money7. Cost structure â cost to build mvp, interview 30 to 50 people, burn rate (fixed and variable costs) What is the break even point?8. Key metrics â AARRR - acquisition (make interest to your solution), activation ( sign up or walk into your store), retention (come back), revenue (get money from them) and referrel (NPS â refer others)9. Unfair advantage- something that cant be copied or brought easily Dream team - FB purchase of Instgram for $1b, Steve Job and Pixa or âCommunityâ FB vs Google +Each 9 areas of the busines model needs to be tested. These are all GUESS. Need to turning them in FACT
How do we systemically turn theses GUESS into FACT? We priorities else it would be to overwhelming.Order: Problem - are we solving the right problem for our customers? Channel - do we have easy and sustainable path to our customers?Revenue stream/Cost structure â what we charge to customers is based on WHO we target (eg Fuji water customers)Customer segment â is the market big enough? Is the problem worth solving?Solution - is it feasible to build and maintain?Often use âAdvisorsâ to first validate the model by asking What do they think is the riskiest aspect of the plan? Have that overcome similar risks? How? How would they go about testing the risks? Are there other people we should speak with?One approach is use Analogs and Antilogs, as described by John Mullins and Randy Komisar in their book; Getting to Plan B. This approach looks at the history of successful companies and uses this knowledge to learn what the risky assumptions within your business model may be.
Arm with a clearer understanding of the problem we are trying to solve, prioritized problem
1. Product risk scenario might be understand the (1), with this understanding we define a minimal set of features to test with customers (2) and we validate MVP and see if we can realize the UVP (3) and early adopters. We track this against our metrics (4)
1. Product risk scenario might be understand the (1), with this understanding we define a minimal set of features to test with customers (2) and we validate MVP and see if we can realize the UVP (3) and early adopters. We track this against our metrics (4)2. Customer risk scenariomight be identify who is experience pain points (1), narrow down to early adopters (2), establish a channel to keep engaging segment (3), keep building channel to scale to acquire customers (eg community base solution) (4)
1. Product risk scenario might be understand the (1), with this understanding we define a minimal set of features to test with customers (2) and we validate MVP and see if we can realize the UVP (3) and early adopters. We track this against our metrics (4)2. Customer risk scenariomight be identify who is experience pain points (1), narrow down to early adopters (2), test channels to keep engaging segment (3), keep building channel to scale to acquire customers (eg community base solution) (4)3. Market risk scenario â might be identity competition/ alternative solutions (1), than test price what customers would verbal say they will pay (2) and than (3) what they actually will pay (3) and optimize cost
Full solution is time consuming and could lead to waste, We want to build something that is just enough of a solution in front of customers to âtestâ and get their reaction and help define further changes or âpivotsâ
Full solution is time consuming and could lead to waste, We want to build something that is just enough of a solution in front of customers to âtestâ and get their reaction and help define further changes or âpivotsâ
This turns our Leap of Faith assumption from: Our event will attract a large enough audience to make the project sustainable.To the falsifiable hypothesis: 20% of the customers we speak to will register for our eventEg âBeing know as an âExpertâ will drive early adapters vs âA blog post will drive 10 sign upâFalsifiable hypothesis: âSpecific Repeatable actionâ will generated âExpected measureable outcomeâ
Positive results means we can go forward, else we need to quickly refine (pivot) or abandon the test.
We need to first test âqualitativelyâ (eg customer interviews) THEN âquantitativelyâ. This example is about âquantitativelyâ testing the experiment.
Full solution is time consuming and could lead to waste, We want to build something that is just enough of a solution in front of customers to âtestâ and get their reaction and help define further changes or âpivotsâ
Full solution is time consuming and could lead to waste, We want to build something that is just enough of a solution in front of customers to âtestâ and get their reaction and help define further changes or âpivotsâ
Positive results means we can go forward, else we need to quickly refine (pivot) or abandon the test.
Positive results means we can go forward, else we need to quickly refine (pivot) or abandon the test.