An investor focussed deck that covers: - What is a Lean Startup? - The key behaviors of being lean - Using lean to define and measure progress in a startup

1. HOW TO IDENTIFY A
LEAN STARTUP
ASH MAURYA
@ashmaurya
http://www.ashmaurya.com

2. The sad statistics of Plan A

3. 58
new product ideas to get
one successful product.

4. 9/10
startups fail.

5. 66%
change their original plans
drastically.

6. Not better Plan A.
But a path to a plan that works.

7. Lean Startup is a rigorous process for
iterating from Plan A to a plan that works.

8. Agenda
1. What is a Lean Startup?
2. What does a Lean Startup look like?
3. How you can use Lean to define and measure progress

9. Agenda
1. What is a Lean Startup?
2. What does a Lean Startup look like?
3. How you can use Lean to define and measure progress

10. Don’t let me be misunderstood
We’re Lean because:
- we got a great deal on our furniture!
- we surveyed all our customers and found that…
- we’ve implemented continuous deployment!

11. Don’t let me be misunderstood
We’re Lean because:
- we got a great deal on our furniture!
- we surveyed all our customers and found that…
- we’ve implemented continuous deployment!

12. Don’t let me be misunderstood
We’re Lean because:
- we got a great deal on our furniture!
- we surveyed all our customers and found that…
- we’ve implemented continuous deployment!

13. Don’t let me be misunderstood
We’re Lean because:
- we got a great deal on our furniture!
- we surveyed all our customers and found that…
- we’ve implemented continuous deployment!

14. So, what then is a Lean Startup?

15. A Lean Startup is about speed
Startups that succeed are those that manage to iterate
enough times before running out of resources.
- Eric Ries

16. A Lean Startup is about validated learning
Get out of the building.
- Steve Blank

17. A Lean Startup is about focus
Right Action, Right Time
- Bijoy Goswami

18. Agenda
1. What is a Lean Startup?
2. What does a Lean Startup look like?
3. How you can use Lean to define and measure progress

19. Create a business model versus a business plan
Business Model vs Business Plan

20. Create a business model versus a business plan
Business Model vs Business Plan
A document investors make you write
that they don’t read

21. Create a business model versus a business plan
Business Model vs Business Plan
A single diagram of your business

22. Start with worksheets
1. WHAT: Problem
What is the problem you are trying to solve?
2. WHO: Customer
Who has the problem?
3. HOW: Product/Market
How do you solve this problem?
How big is this market?
How are you going to reach this customer?
How do you drive demand?
How will you make money?

23. Then get it down tighter
Problem Solution Unique Value Unfair Customer
Proposition Advantage Segments
Top 3 problems Top 3 features
Single, clear, Can’t be easily Target customers
compelling copied or bought
message that states
why you are
different and worth
Key Activity buying Channels
Activity that drives Path to customers
retention/revenue
Cost Structure Revenue Streams
Customer Acquisition Costs Revenue Model
Distribution Costs Life Time Value
Hosting Revenue
People, etc. Gross Margin

24. 3 stages of a startup
Problem/Solution Product/Market
Scale
Fit Fit

25. Validate Problem/Solution Fit
Problem/Solution Product/Market
Scale
Fit Fit
Do I have a problem worth solving?

26. Problem/Solution Fit - Lean Canvas
P S UVP UA CS
Top 3 problems Top 3 features Single, clear, Can’t be easily Target customers
compelling copied or bought
message that
states why you are
different and
worth buying
KA CH
Activity that drives Path to customers
retention/revenue
C$ R$
Customer Acquisition Costs Revenue Model
Distribution Costs Life Time Value
Hosting Revenue
People, etc. Gross Margin

27. Achieve Product/Market Fit
Problem/Solution Product/Market
Scale
Fit Fit
Have I built something people want?

28. Product development gets in the way of learning
Some learning Most learning happens here
Requirements Development QA Release
Very little learning

29. Involve customers throughout product dev
Continuous
Requirements Release
Deployment
Customer Customer
Discovery Validation

30. Product/Market Fit - Lean Canvas
P S UVP UA CS
Top 3 problems Top 3 features Single, clear, Can’t be easily Target customers
compelling copied or bought
message that
states why you are
different and
worth buying
KA CH
Activity that drives Path to customers
retention/revenue
C$ R$
Customer Acquisition Costs Revenue Model
Distribution Costs Life Time Value
Hosting Revenue
People, etc. Gross Margin

31. Optimize for Scale
Problem/Solution Product/Market
Scale
Fit Fit
How do I accelerate growth?

32. Scale - Lean Canvas
P S UVP UA CS
Top 3 problems Top 3 features Single, clear, Can’t be easily Target customers
compelling copied or bought
message that
states why you are
different and
worth buying
KA CH
Activity that drives Path to customers
retention/revenue
C$ R$
Customer Acquisition Costs Revenue Model
Distribution Costs Life Time Value
Hosting Revenue
People, etc. Gross Margin

33. Before Product/Market Fit
Problem/Solution Product/Market
Scale
Fit Fit
Validated Learning
Pivots

34. After Product/Market Fit
Problem/Solution Product/Market
Scale
Fit Fit
Validated Learning Growth
Pivots Optimizations

35. Agenda
1. What is a Lean Startup?
2. What does a Lean Startup look like?
3. How you can use Lean to define and measure progress

36. Start with what matters
P S UVP UA CS
1. Problem #1 1. Feature #1 1. Founders
2. Problem #2 2. Feature #2 2. Marketers
3. Problem #3 3. Feature #3
KA CH
C$ R$

37. But also tackle the riskiest parts early
P S UVP UA CS
1. Problem #1 1. Feature #1 Something that 1. Founders
2. Problem #2 2. Feature #2 cannot be copied 2. Marketers
3. Problem #3 3. Feature #3 or bought.
KA CH
1. Personal
Authority
2. Website
C$ R$
Subscription Model: $49/mo

38. Formulate falsifiable hypotheses
Leap of Faith: Being known as an “expert” will drive early adopters
Hypothesis: Blog post will drive >100 early sign-ups

39. Build accessible dashboards

40. Make the results auditable

41. Run board meetings in a lessons learned format
Q2 2010
We thought (Hypotheses):
50 $20K
• Personal Authority would be a viable
channel to early adopters
• Customers would vote the problem as
“must-have” 37.5 $15K
• Customers would pay $49/mo
Our Customers told us (Insights): 25 $10K
• Most early adopters did come through
blog and twitter
• Customers voted #3 problem as “must- 12.5 $5K
have”. Others as nice-to-have
• $49/mo works for customers with early
traction
0 $0
Next Steps (Future Experiments): Jan Feb Mar Apr May June July
• Test MVP based on “must-have” problem
• Test a Freemium model

42. Lean Startup is a rigorous process for
iterating from Plan A to a plan that works.

43. Thanks!
Ash Maurya
twitter: ashmaurya
blog: http://www.ashmaurya.com
Running Lean - the book
How to pivot your web
application to product/market fit
http://www.RunningLeanHQ.com