1. A method for entrepreneurship
Lean Startup - Introduction
Jakob Bejbro Andersen
jaban@mek.dtu.dk
Unless otherwise stated, this material is under a Creative
Commons 3.0 Attribution–Share-Alike licence and can be
freely modified, used and redistributed but only under the
same licence and if including the following statement:
“Original material by Thomas J. Howard and Jakob Bejbro Andersen for course 41631 – Innovation and
Product Development Department of Mechanical Engineering, The Technical University of Denmark”
2. Background
• Author: Eric Ries (founder of three startups).
• Cases used: Several IT and Web startups.
• One of the first frameworks specifically
Minded on entrepreneurship (!).
• Many principles/ideas borrowed from Lean.
• Now a ”must read” book for entrepreneurs.
Eric Ries, 2011
2 Original material by Thomas J. Howard & Jakob Bejbro for 41631: Innovation in Product Development 2013
Department of Mechanical Engineering, Technical University of Denmark
3. Current focus in teaching entrepreneurship
• Presentation rather than substance.
– Elevator pitches.
• The special breed: the entrepreneurs.
– Either you have it or you don’t.
• Putting people together results in
Businesses.
– Startup weekend, incubators etc.
3 Original material by Thomas J. Howard & Jakob Bejbro for 41631: Innovation in Product Development 2013
Department of Mechanical Engineering, Technical University of Denmark
4. The novelty in Lean Startup
• From:
Entrepreneurship and its succes depends on the
opportunity and the entrepreneur’s ability to exploit it.
• To:
The entrepreneur, the opportunity and the process are all
part of the creation of successful ventures.
Meaning:
Entrepreneurship can be taught!
Build -> Measure -> Learn! (loop)
4 Original material by Thomas J. Howard & Jakob Bejbro for 41631: Innovation in Product Development 2013
Department of Mechanical Engineering, Technical University of Denmark
5. Relation to Development Log
Measure/
Input
Data Learn (from mentor,
supervisor, market
etc.)
(Updated!)
(none)
New gap/need
Result
identified Need
(data, surveys, drawings,
excel sheets etc.) or given higher
priority
Build
Execution of Choice of
approach approach
5 Original material by Thomas J. Howard & Jakob Bejbro for 41631: Innovation in Product Development 2013
Department of Mechanical Engineering, Technical University of Denmark
6. Questions?
6 Original material by Thomas J. Howard & Jakob Bejbro for 41631: Innovation in Product Development 2013
Department of Mechanical Engineering, Technical University of Denmark
7. A method for entrepreneurship
Lean Startup – Central Concepts
Jakob Bejbro Andersen
jaban@mek.dtu.dk
Unless otherwise stated, this material is under a Creative
Commons 3.0 Attribution–Share-Alike licence and can be
freely modified, used and redistributed but only under the
same licence and if including the following statement:
“Original material by Thomas J. Howard and Jakob Bejbro Andersen for course 41631 – Innovation and
Product Development Department of Mechanical Engineering, The Technical University of Denmark”
8. A case for the following: EdgeFlow Aps
• Founded in 2009 with PLH Architects and SEED Capital
• I am currently the CEO.
• A tech startup.
• Each prototype iteration has cost EdgeFlow EUR 250.000.
– Two in all.
8 Original material by Thomas J. Howard & Jakob Bejbro for 41631: Innovation in Product Development 2013
Department of Mechanical Engineering, Technical University of Denmark
9. Link to movie:
www.edgeflow.dk/EF_movie.avi
9 Original material by Thomas J. Howard & Jakob Bejbro for 41631: Innovation in Product Development 2013
Department of Mechanical Engineering, Technical University of Denmark
10. The central hypotheses
• The company’s value proposition is attractive.
– The customer is going to buy the product at the projected price.
• The company’s ”growth engine” can perform.
– Will the company grow as quickly and effectively as intended?
– Are the mechanisms in place for achieving this?
•Needs validation!
10 Original material by Thomas J. Howard & Jakob Bejbro for 41631: Innovation in Product Development 2013
Department of Mechanical Engineering, Technical University of Denmark
11. Validated learning
•
• -
• o
–
• What (exactly) is creating the value / improvement? • o
–
–
• To be certain, tests/experiments should be set up.
• All dimensions of the business model should be validated –
in this manner.
–
–
A B •
•
§ Av
§ D
Lean startu
Engine ana
11 Original material by Thomas J. Howard & Jakob Bejbro for 41631: Innovation in Product Development 2013
Department of Mechanical Engineering, Technical University of Denmark
12. Validated learning II – EdgeFlow as case
• Formulating value propositions.
– CSR dimensions were deamed unattractive to industry
– Financials first!
• But…
– Later, we realised that (some) customers were actually quite
interested in a value proposition that included CSR dimensions.
What should I have done?
12 Original material by Thomas J. Howard & Jakob Bejbro for 41631: Innovation in Product Development 2013
Department of Mechanical Engineering, Technical University of Denmark
13. Minimal Viable Product
• Designing for value – not for perfection.
• Get to the market and learn.
– Fail fast!
• MVP has the functionality needed to go through one
build -> measure -> learn loop
• MVP types:
– Video
– Concierge
13 Original material by Thomas J. Howard & Jakob Bejbro for 41631: Innovation in Product Development 2013
Department of Mechanical Engineering, Technical University of Denmark
14. MVP – Another EdgeFlow learning
• Go full scale from day 1!
– This will help us in completing the technical development faster.
• But…
– What about the customers? Will they buy it?
– A scaled model would be cheaper, easier to produce and safer to
install on a customer location.
– No need for having a finished product if the customer is not
interested in buying it.
14 Original material by Thomas J. Howard & Jakob Bejbro for 41631: Innovation in Product Development 2013
Department of Mechanical Engineering, Technical University of Denmark
15. Exercise:
•What could your minimal viable
product be?
•Spend 3 minutes deciding on a customer.
•Spend 12 minutes on conceptualising MVPs for
testing your assumptions (sketch!)
– What will you be testing and how do you measure?
•After 15 minutes (in total), we discuss your
ideas.
15 Original material by Thomas J. Howard & Jakob Bejbro for 41631: Innovation in Product Development 2013
Department of Mechanical Engineering, Technical University of Denmark
16. Innovation accounting
• Results from need to be gathered continuously and
compared.
• Growth figures can hide underlying problems.
– Use ”cohort” analysis (analysis by group)
16 Original material by Thomas J. Howard & Jakob Bejbro for 41631: Innovation in Product Development 2013
Department of Mechanical Engineering, Technical University of Denmark
17. Pivot or Persevere?
• Is the business performing? (based on innov. accounting)
• If not, you can either:
– Persevere (incrimental improvements)
– Pivot (Rethink the whole parts of the business)
• Types of pivots (help me guess):
– Zoom in/out
– Customer segment
– Customer need pivot
– Engine of growth
– Platform
17 Original material by Thomas J. Howard & Jakob Bejbro for 41631: Innovation in Product Development 2013
Department of Mechanical Engineering, Technical University of Denmark
18. Pivots in EdgeFlow
• Same story, different light: The switch to CSR
– A ”customer need pivot”.
• But…
– What about the customers? Will they buy it?
– A scaled model would be cheaper, easier to produce and safer to
install on a customer location.
– No need for having a finished product if the customer is not
interested in buying it.
18 Original material by Thomas J. Howard & Jakob Bejbro for 41631: Innovation in Product Development 2013
Department of Mechanical Engineering, Technical University of Denmark
19. Lean Startup - shortcomings
• ”If you can think it – you can build it”
– Cost of technology – adding a new feature costs $ and time
– Technological uncertainty
– Technology ”lock in”
– Technology can resist change.
• Focus on measurements
– No descriptions of the development processes required.
• The ”build” step is simplified / neglected.
• Assumes free access to customer (B2C) and A LOT of data.
19 Original material by Thomas J. Howard & Jakob Bejbro for 41631: Innovation in Product Development 2013
Department of Mechanical Engineering, Technical University of Denmark
20. Questions?
20 Original material by Thomas J. Howard & Jakob Bejbro for 41631: Innovation in Product Development 2013
Department of Mechanical Engineering, Technical University of Denmark