The document discusses an introductory session on the Lean Startup methodology, covering topics such as validating business hypotheses through customer interviews and minimum viable products, building an iterative process of developing, testing, and improving early-stage business ideas based on customer feedback. Examples are provided of how companies like IMVU tested assumptions about customer problems and solutions through low-fidelity prototypes and data analysis to guide business model pivots or persevering with the original vision.

1. School of Management & Governance 1
PD Dr. Rainer Harms
Dr. Michel Ehrenhard
r.harms@utwente.nl
International New
Business Development
Session 1: Intro to Lean Startup

2. School of Management & Governance 2
www.capstonebranding.com/ about/capstone.php

3. Typical issues with this class
Comment: „We dont learn much content!“
Reply: „True. You had content throughout your Bachelor, and you will
create your own, specific content while you research.“
Comment: „We are left alone during project execution!“
Reply: „Partially true. But finding your own way in an entrepreneur‘s
reality
Comment: „We dont recieve much feedback!“
Reply: „Partially true. But we have extensive walk-in opportunities
Comment: „The projects are so vague and complex“
Reply: True. Thats real business. We try to help you deal with it.
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5. Planning, storming the castle, or something else?
School of Management & Governance 5www.caycon.comfreelanceswitch.com

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7. Startups as experiments: Validated learning
7http://blog.amt.in/the-new-science-of-product-development
http://www.youtube.com/watch?feature=player_embedded&v=WAdikBfKeD8

8. The scientific method
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http://blog.amt.in/the-new-science-of-product-
development

9. Lean Startup – merging the scientific method and
entrepreneurship
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1. Talk to customers – real cases
2. Form hypotheses to test
3. Write code (produce)
4. Roll out to % customers
5. Analyze data
6. Interpret data
7. Share learning
http://blog.amt.in/the-new-science-of-product-
development

10. The B – M – L cycle
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11. IMVU: Eric Ries‘ Lean Startup Story
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www.microsoft .com
http://www.imvu.com/catalog/web_landing.php?p=ls1 llcollection-groupll.blogspot.com
http://www.youtube.com/watch?v=fEvKo90qBns minutes 23 to 35

12. Testing assumption: two IMVU examples
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brucebucks.com
zazzle.com

13. The problem-solution fit
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Refers to a implicitly defined customer segment -> make expliciti

14. The MVP
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„The MVP is the smallest group of features that will elicit customer
feedback about the validity of the customer problem or solution“
Steve Blank
The mechanical turk

15. Getting deeper into the MVP
 Low-Fi MVP
 Problem exploration MVP: customer inverviews
 Product Pitch MVP: asking cash at the end; landing pages, video
demos
 Concierege MVP: real delivery, but „Wizard of Oz“
 Hi-Fi MVP
 Removal of any feature that might distract from the core learning
goal (google, dropbox - > plain interfaces
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16. Analyzing
 Qualitative analysis
 Quant. analysis: A/B testing, conjoint
analysis etc.
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„Pivot“ or presevere
http://cdn.elezea.com/images/local-maximum.gif

18. Pivot = strategic change: one way of listing …
 Zoom-in-pivot
 Zoom-out-pivot
 Customer segment pivot
 Customer need pivot
 Platform pivot
 Business architecture pivot
 Value capture pivot
 Engine of growth pivot
 Channel pivot
 Technology pivot
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19. Key metrics (example)
 Industry-Specific KPI
 „Conversion rate“ – from view to click, from click to buy
Reference: the metrics page
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20. Example of empirical project (validated learning)
1. Problem: Mediocre evaluation of BK III course
2. Preliminiary research, eg. Brainstorming: Limited feedback as main problem,
mentoring as potential solution, best practices
3. Hypothesis: „Mentoring is positively related to the course evaluation
4. Test design:
4.1: Sample: this BK III class, all students
4.2: Operationalization: main satisfaction score, project support and feedback score,
assignment feedback score
4.3: Method of analysis: 2-sample mean comparison (t-test)
5. Analyse data
6. Conclusion
7. Results
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22. Example your project
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1. Problem: Newsletter services can be expanded to other segments
2. Preliminiary research, e.g. Brainstorming: lit research, customer interviews about what
they value most about current project, interview with prospective customers etc., SMT,
Porter5forces etc.
3. Hypothesis (better: Assumption!): „Customers derive value from newsletters “
(operationalize!)
4. Test design:
4.1: Sample: x number of prospective customers
4.2: Operationalization: find ways to collect your material and / or find fitting metrics !
4.3: Method of analysis: qualitative vs. quantiative
5. Analyse data
6. Conclusion
7. Results

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Businnes
Model
Generation/
Validation
Minimal
Viable
Product
(MVP)
Usage
3-5 clients
Market
Research Idea?
MVP
for
Adoption
MVP
for
Revenue
Month 1 Month 2,3 & 4 Month 5 Month 6
Idea
Business
Plan
Func. Spec
Design
Build
Test
Market
Sell
Some learning
More learning
Most
learning

24. The lean canvas – where does BML hide?
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25. Deliverables
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Starting
canvas
DP 1
Suggest
solution
DP 3
Exam
< 10.02 12.02 26.02 12.03 19.03 26.03 17.4.
Find project
company /
own venture
Problem
interview
DP 2
Solution
interview
DP 4
Pitch
DP 5

26. In short
 Find a company / a venture with a (I)NBD issue
 Set up a meeting with the entrepreneur, and identify customer-
reserach project
 Describe current venture with Lean Canvas (DP 1)
 Carry out and report customer interview (DP 2)
 Suggest a solution (DP 3)
 Get customer feedback from solution (DP 4)
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27. Getting started with the interviews
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Coffee shops
Lurking: on the street, in a location,
online...
@MeetUpsWhere do I find them?
Facebook / LInkedIn
Existing Customers
1st Degree Networks
http://de.slideshare.net/LeanStartupConf/jon-irwin-
rocktheinterview-slides

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Is the problem worth solving?
Make a problem interview.
This is a problem statement
This is another problem statement.
(Priority [ ] | Pain: low, medium, high) | How I solve this
today:
This is a third problem statement.
(Priority [ ] | Pain: low, medium, high) | How I solve this today:
This is a blank problem the customer can fill in.
(Priority [ ] | Pain: low, medium, high) | How I solve this
today:
This is a blank problem the customer can fill in.
(Priority [ ] | Pain: low, medium, high) | How I solve this
today:
Name:
Email Address:
Referrals:Notes:
http://de.slideshare.net/LeanStartupConf/jon-irwin-
rocktheinterview-slides

29. Opener
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Hey, I’m [name], and I’m working on
a project to help conference
attendees connect and collaborate.
Do you wish it was easier to
connect and share ideas with other
attendees like you? [smile]
Yes? Awesome, here we go / No? Okay, thanks. [smile]
http://de.slideshare.net/LeanStartupConf/jon-irwin-
rocktheinterview-slides

30. Analyse the problem interview
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Do the problems really exist?
Are the problems commonly experienced?
Are the problems severe?
Are there problems you didn’t anticipate?
Is this the right customer?
Take an opportunity to refine your target group
Should you Kill / Pivot / Persevere?
http://de.slideshare.net/LeanStartupConf/jon-irwin-
rocktheinterview-slides

31. Our role
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