How to start a startup - complete version

How to start a startup
(2016 Version)
CCopywite 2015 Masayuki Tadokoro All rights reserved

You can make the world a better
place with your startup
❓
Copywite 2015 Masayuki Tadokoro All rights reserved

93% of startups fail

Question:
Why do startups fail?
❓

There is only one reason:
You don’t make
something people want

MarketProduct
Product/market fit means being in
a good market with a product that
can satisfy that market
Fit

Make something people
want.
-Paul Graham
Y−combinator, founder

With headquarters in Silicon Valley,
it is known as the greatest start-up
incubator in the world.
What is Y-combinator？

To date Y-combinator
Generated 842 startups,
more than 100 exits and
the combined valuation of Y-C
startups exceeds 70 billion USD

＋
ー
Product-
market-fit
Start-ups should follow a “J-curve”

BeforeProduct-
market-fit
After Product-
market-fit

Only7％
archive
PMF
93% die
before
PMF

http://www.businessinsider.com/how-billion-dollar-startup-fab-died-2015-2#ixzz3cRjBHFri
fab.com received
336 million;
they spent (wasted)
more than half.
They eventually
sold the company with
a 15 million valuation.

Before proving our business model,
we spent 70 million to launch in
Europe, another tens
of millions for marketing.
We wasted 15 million for never-used
warehouses.
参照：http://www.businessinsider.com/how-billion-dollar-startup-fab-died-2015-2#ixzz3cRjBHFri
- Jason Goldburg
Fab. CEO/founder

If you have too much money,
you will find easy ways to solve
the issues without thinking thoroughly
Ben Narasin
General Partner, Canvas Ventures

There is
no silver bullet
to achieve
Product-market-fit

However,
you can
reduce the risk of failure
by learning
processes
and gaining knowledge

Learn steps to build up
successful start-ups
*I can not guarantee your success, but I’ll do my best^^
Theme of the day

About me

Masa
Tadokoro
【Serial Entrepreneur】
He has extensive experiences in start-up space;
3 start-ups in Japan and 1 start-up in Silicon Valley.
【Venture Capitalist】
Currently he is a partner of Fenox VC;
he is in-charge of start-up investment
in Japan and South East Asia.
【Lecturer 】
Start-up finance
How to ideate startup
Open innovation
【Other】
Adviser/board member of several startups
Director of startup management at Pioneers Asia
https://www.facebook.com/masa.tadokoro
https://www.linkedin.com/in/masatadokoro
【Social media】
Find me
and connect!

Agenda
① Idea Verification : What is a good start-up idea?
② Customer-problem Fit： Does the issue really exist?
③ Problem-solution Fit:
④ Product-Market Fit:
⑤ Co-founder Finding: Build your team to grow
Do you provide an appropriate
solution to the issue?
Does the market for the solution
exist?

Idea Verification
Verify
your Idea
Create
Plan A
Build Plan A
with
Lean Canvas
Ideation
Clarify
what issue
is to be solved
Verify the
potential of
your idea
1-1 1-2 1-3 1-4
Know
Start-up
Meta-principles
Know
start-up
un-common
principles

Customer Problem Fit
Validate
Hypothesis
2-1 2-3
Clarify
Assumptions
By using
Javelin
board,
clarify premises
of the Issue
2-2
Build
Hypothesis
Build hypothesis
of the issue and customer
（Persona,
Empathy map, etc）
Validate whether
the customer issue
exists

Problem-solution fit
Create
UX
Blueprint
Create
blue print
on to-be UX
Product
Interview
3-1 3-2 3-3
Build
Prototype
Build prototype
based on
solution interview
Conduct interview
by showing
prototype

Product-market-fit
Build MVP
Ship MVP
to 1st User
and +earn
Measure
Product
Performance
MVPを
作って何を
学ぶか検証
Talk to
Users
Verify initiatives
with hooked model
Evaluate Initiatives for
Product Improvement
and implement
4-1 4-2 4-3
4-4 4-5 4-6
Talk to users
to verify product
qualitatively
What
would you Learn
with MVP
Fill in MVP sheet
Fulfill MVP Qualification
Select MVP type
and build it
Deliver product
to evangelist
users and learn
Measuring with
innovation
metrics Iterate until you will achieve
PMF

・To obtain principals, frameworks and
concepts in order to build a successful startup
・To practice hands-on processes to well-
prepare for your start-up
Today’s goal

・Those that want to start a start-up
・Those that want to do a new business in their
current company.
・Those that want to invest in good startups as
institutional investor, i.e.VC or angel.
・Those who have started a startup and want to
achieve a Product-market-fit
Target audience

From the link below, you can download
① The complete deck as PDF
② Bonus content (how to build startup team)
③ Worksheets referenced in deck
https://how-to-
startup.stores.jp/items/57cb09a499
c3cd4554005d88
At only 3.99 USD !

Agenda
Do you provide appropriate solution
to the issue?
Does the market exit to the solution?

Idea Verification
Verify
your idea
Create
plan A
Build Plan A
with
Lean Canvas
Ideation
Clarify
the issue
to be solved
Verify the
potential of
your idea
1-1 1-2 1-3 1-4
Know
start-up
meta-principles
Know
start-up
un-common
principles

Staying in the building
before getting out of the Building

Question:
What is a good business idea?
❓

Issue
Solution
Focus!
Good business idea:
it is focusing on issues,
not solutions

Quality of issue
Quality of
solution
High
HighLow
Low
There are many business ideas.

Quality of issue
Quality of
solution
High
HighLow
Low
Most
Ideas
Valuable
Idea

A path to find a good business idea=
verify quality of the issue first,
then verify quality of the solution
①
②
High quality
idea
Low quality
idea
Quality of issue
Quality of
solution
High
HighLow
Low

X High quality
idea
Low quality
idea
Quality of issue
Quality of
solution
High
HighLow
Low
There is no path to
find a good solution
then find a good issue

Domain
Expertise
Industry
knowledge
Market
Knowledge
High quality
idea
Low quality
idea
Quality of issue
Quality of
solution
High
HighLow
Low
Quality of issue
depends on
your expertise,
industry
knowledge
and knowledge on
how the
particular market
is evolving

What is a good idea?
Start-up ❓

How crazy is your idea?

You should know
a secret most of people
don’t know.
- Peter Theil
Author of “Zero to One”

If your idea is sexy to everyone -
it’s no longer sexy

Good idea to
everyone
looks like a
bad idea but isn’t bad
Your
start-up
idea
Everyone thinks it’s
a good idea
Looks bad but is
actually a good one
(Someone already knows)
Looks bad but
is actually a good one
(Other people don’ t know)

Good idea to
every one
Other companies
are also
considering the idea
Market is
getting
crowded
It is competition of resources,
operation
and price of product
Large corporates
have advantages
over startups
Startups are
at a disadvantage
due to the lack of
resources
Startup will
eventually loose
Startup should not choose
the idea looks good for
everyone

Can you commit
that you will achieve
100+ million revenue
within 3 years?
- Executive of
large company

- Executive of
large company
You don’t
start your
startup with
this Mindset
Can you commit
that you will achieve
100+ million revenue
within 3 years?

高い
専門性
業界の
知識
Crazy Good
start-up
idea
Your secre
t
High quality
idea
Low quality
idea
Quality of issue
Quality of
solution
High
HighLow
Low
Domain
Expertise
Industry
knowledge
Market
Knowledge
Your
secret
is key

To develop a long-lasting mobile
battery is good idea; it is good idea to
everyone’s eyes. Therefore, it is not a
good start-up idea
- Chris Dixon
Partner, Andereesen Horowitzs
Copyright 2015 Masayuki Tadokoro All rights reservedhttps://www.youtube.com/watch?v=fGjGu9gFfO4

Good idea
Idea looks bad
Most ideas
that look bad
are just bad ideas

Criteria to measure craziness of a startup idea:
Do you hesitate to talk
about the idea to someone?

Idea looks bad at
a glance
Other companies
might have rejected it
The market
has not been
clearly defined
The company that can
create something
people want, will win
Resource is
not key to win
- collecting insights
from users is key to win
Iterating product
by listening
to voice of customers
Start-up
will win
Why do startups need
to pick an idea that
looks bad?

Idea craziness:
The biggest unfair advantage of a start-up

アストロスケール
When I started Astroscale,
everyone asked me where was the
market? I was fascinated with this
feedback - I perceive it asa great
opportunity.
Nobu Okada
CEO of Astroscale
https://www.youtube.com/watch?v=SGCxbgqLhqo

AirBnB looked like a very bad idea
at the beginning

Good idea
Idea looks bad
Sleeping
on a couch
in stranger’s
apartment

Startup ideas that “look bad”
have been changing the world

On-demand grocery delivery service;
Instacart shoppers will bring a glossary
to user with 2 taps of the screen

Instacart was chosen as
the most promising start-up
in 2015 by Forbes magazine

Apoorva Metha,
founder of Instacart,
was a developer of
Amazon warehouse system, i.e.
Amazon fulfillment service

Grocery shopping was very
painful; I always wished somebod
else would have done it for me.
Apoorva Metha
Instacart, Founder

Apoova suggested Instacart model to
Amazon management.
However, the idea was turned down since
it contradicted the investments Amazon
had already made, i.e. all of logistics
systems and warehouses

The biggest threat to
retail stores/supermarket is
amazon.com

Amazon revenue↑
Supermarket revenue ↓
Amazon revenue↓
Supermarket revenue ↑

Instacart can be a great partner to local
retail stores and supermarkets

Instacart revenue ↑
Supermarket Revenue ↑

高い
専門性
業界の
知識
Crazy Good
start-up
idea
High quality
idea
Low quality
idea
Quality of issue
Quality of
solution
High
HighLow
Low
Expertise
on
logistics
system
Sharing
Economy
Discovery of win-win model
for retail stores that Amazon cannot tap into
Your
secret
is key

Deliver goods
with good logistics
looks like
a bad idea
Hire someone
for grocery
shopping
Good idea to
everyone
Looks bad but is
actually a good one
(Someone already knows)
Looks bad but

SPACE X:
To migrate human beings to Mars

Reusable rocket

高い
専門性
業界の
知識
Crazy Good
start-up
idea
High quality
idea
Low quality
idea
Quality of issue
Quality of
solution
High
HighLow
Low
Expertise
on
logistics
system
Sharing
Economy
Discovery of win-win model
for retail stores that Amazon cannot tap into
Your secret
is key

Paradigm shift is
accelerating in
recent years
Paradigm shift is accelerating
- periods between products/services are
shortening

There are many failed large corporates that did
not keep up with the paradigm shift

Conventional Innovation Curb
Innovator Early
adaptor
Early
majority
Late
majority
Laggard
3~7%
You were able to verify your product over
time

New Innovation Curb
Trial
User
Burst
Majority
Marketing blast
model - from
influential
“trial users”
to “burst majority”
Business model 2025, by Hiroyuki Naganuma
Speed is Critical !

Ideas you should avoid
❓

Looks good at first glance.
Like SNS for pets, looks-like-good-idea actually but is a bad
idea; somebody else has already tried it and it never took off

Too niche
Prime example is E-commerce sites handling
products with extreme tastes; the idea is to avoid
competition and tap into a small potential market

SEMG pod was a wearable thats detect
muscle movement; nobody wanted to use it
Creating something you want to build, not
something you want to have personally

Issues based only on your
assumption
The founder of KOLOS never used tablet
devices; he decided to build this product
only because he got a good reaction on
Kickstarter

Idea generated from
analysis
Miku was a Groupon-like service for esthetics
salon lovers; they closed the service shortly
after they launched

Entering into fierce competition
Argyle social was the social media
dashboard for B2B users. The market was
too crowded; they could not beat Radian6,
Adobe, or HootSuite

You cannot explain the business
model in one sentence
Amiloom was too complex; you cannot explain it in
one sentence. Nobody understood the service,
and nobody used it

Then, what should your idea
be based on?
❓

Ask yourself:
If some genius out there will
create a solution perfect for
you,
what would that be like?
通年

Brian Chesky, founder of Airbnb,
started the service
to solve his own problem.
He was not able to pay rent while
he had one empty room available
in his apartment
* He only had 1000 USD in his bank account, though the rent
of his apartment was 1,500 USD
https://www.youtube.com/watch?v=6yPfxcqEXhE

The best issues you should take on
are something you are personally
struggling with
Posted available room info to his blog*
The very first version of Airbnb

① Looking back your career/life, write down
one thing you have domain expertise in, which
few other people have.
② For the thing you wrote about in the above
exercise, write one thing you are struggling
with the most, which you strongly think needs
to be solved
Exercise
❓

・Do not start a start-up for the sake of creating a start-up
・Know the differences between start-ups and
small businesses
・Unlearn the common sense you have learned in your life
・Doing start-up is often counter-intuitive
Start-up meta principles

The best way to come up
with a good start-up idea is
not thinking about start-up
ideas.
-Paul Graham
Y−combinator founder
http://paulgraham.com/startupideas.html

Good start-up ideas often
come from side projects.
* 71% of start-up ideas are
generated when the founders were working
at their previous company
❓

Your current job Side project
Responsibility
Play assigned role
Focus on urgency
Constrained with
current value chain
Present
Based on current solution
Based on current practice
fear of failure
Overhead/Fix cost
Based on curiosity
Based on play
Focus on importance
Think out of the box
No constraint from current operation
Future
Based on new solution
Think backwards from “should-be”
Be bold for challenge
Flexible cost

- Fixed cost for administrative operation
- You might not split share right
- Sustaining company will become one of
the purposes
Starting a private project
is good idea for startup
Disadvantages of incorporation

Facebookもside projectから生まれた
We did not plan to incorporate
Facebook project.
We were just focusing on what
our users wanted and
built a product to fulfill them.
- Mark Zuckerburg
Facebook founder

Apoorva Metha,
Instacart founder,
came up with the idea
while he was an Amazon employee.
He started to
build a Beta version of Instacart
in the Amazon office cubical

Jerry Yang and David Filo,
Stanford graduate students in 1994,
created a portal site
while they were full time students.
The portal site turned out to be Yahoo!

Steve Jobs and Steve Wozniak
were two gadget geeks;
they tried to build a machine
to enable free long-distance call.
This turned out to be Lisa,
the 1st Apple Computer
❓

From Google’s 80/20 side
project, numerous
businesses were generated

You should start with ideas,
then decide whether
you will make a company
or not.
-Sam Altman,
Y-combinator President
https://www.youtube.com/watch?v=CBYhVcO4WgI

❓
What are the differences between
Start-ups and small businesses?

Difference between start-up and small business
社名 Startup Small Business
How to
grow
J-curve; it will generate tons of returns
when it becomes successful
Linear growth: you can get incremental
return
Market
Environment
The existence of market has yet to be
confirmed. Start-ups take place in
extremely uncertain environment.
Timing is critical
The existence of market is already
proven. Market environment is
relatively stable
Scale Start small. but can scale quickly
You can increment business from small to
medium. You can stay small
Stalkholders VCs, or angel investors Bootstrap, bank loan
Incentives
Stock-options, capital gains
with IPO or Buyout Stable revenue
Addressable
Market
Supply of labour and consumption of
service can take place everywhere
Supply of labour and consumption of
service will take place in limited area
Innovation
Method
Disruptive innovation which redefines
current market
Sustainable innovation based on
current market
❓

Small Business

Start and Up
（To grow rapidly）

Start-up
Entrepreneur
Only a fraction of
entrepreneurs are
startup founders
Most entrepreneurs
are not start-up founders

Start-ups should be designed to grow
rapidly. It is not a start-up if the company
does not grow rapidly; though it may
possess high technology, or it may be
funded from VCs or have an exit strategy.
-Paul Graham
http://www.paulgraham.com/growth.html

start-ups
Small
businesses
Start-ups should grow rapidly,
while small businesses grow incrementally

Start-up founders should
say ‘No’ to
97% of things.
-Sam Altman,
http://blog.samaltman.com/the-post-yc-slump

Activities,
considered as good ones
for a regular companies,
are often regarded as
unnecessary ones;
in many case they are
even regarded as
bad activities.
Question: what are
these activities?
❓

Creating
detailed business
plans
Things you should
avoid in start-up
（ex-business planning people often do this）

Developing product with
a detailed specification
（Engineers often do this）
Things you should
avoid in start-up

Sticking with
your first
business model
Things you should
avoid in start-up

Paying too much attention to
competitors
（ex-marketing researchers often do this）
Things you should
avoid in start-up

Trying to create
a precise financial projection
（people with financial background often do this）
Things you should
avoid in start-up

Trying to create an impeccable
accounting report
Things you should
avoid in start-up
（people with financial background often do this）

Creating a detailed
performance report
(ex-operational managers often do this)
Things you should
avoid in start-up

Adding too many
nice-to-have functions
to the product
Things you should
avoid in start-up
（Engineers often do this）

Paying too much attention
to the product design
or high usability
(Designers often do this)
Things you should
avoid in start-up

Optimizing/automating of
system from the beginning
Things you should
avoid in start-up
（Back-end engineers often do this）

Hiring engineers specialized
in very specific skill
（Needed skills will be changed
when you pivot your business model down the road）
Things you should
avoid in start-up

Raising too much money:
（You will justify unnecessary expenses）
Things you should
avoid in start-up

Attending
networking events or parties
which are not directly relevant
to your startup
（Sales/business development people often do this）
Things you should
avoid in start-up

Hiring too many people
before your business
really takes off
（ex-HR people often do this）
Things you should
avoid in start-up

Hiring VP of Sales/VP of Biz-dev with
impressive background
at the early stage
Things you should
avoid in start-up

Engaging in partnerships
before you validate
the business model
（Alliance/biz dev people often do this）
Things you should
avoid in start-up

Focusing more on
marketing than sales
*Initial traction is necessary
（ex-Marketing people often do this）
Things you should
avoid in start-up

Investing too much
in public
（PR/corporate communicate people often do this）
Things you should
avoid in start-up

Moving to a nice office
（to have your own office）
（B2B sales people often do this ）
Things you should
avoid in start-up

Approaching VCs aggressively
（VCs will approach you when you are creating
a good start-up）
Things you should
avoid in start-up

Distributing more
equity to VCs/Angels
than to founding
members
Things you should
avoid in start-up

Fake work is both easier and
more fun than real work for
many founders.
-Sam Altman,
http://blog.samaltman.com/the-post-yc-slump

Where should the Focus be?
❓

To become an expert in customer
issues and
to make something
customers want

Startup should look fragile
HP Garage

Microsoft in 1975
Paul Allen
Bill Gates

Doing a startup is
counter-intuitive.
-Paul Graham
https://www.youtube.com/watch?v=ii1jcLg-eIQ

❓
Start up is
a different game
than you are use to

Unlearn game you are where you
are fulfilling “right” answers to 100
point scale marked sheet
Things you should
unlearn in start-up

Unlearn the game where you are
trying to get a higher appraisal by
directly reporting to boss.
Things you should
unlearn in start-up

trying to be liked by
many people
Things you should
unlearn in start-up

incrementally improving
(At the beginning stage you should focus on Pivot/Scrap-build）
Things you should
unlearn in start-up

trying to win in competition
（In start-up, the fewer competitors, the better it is）
Things you should
unlearn in start-up

Unlearn the game where you are burning a
budget within given time period
and justifying it
Things you should
unlearn in start-up

Which one is the most important
factor when you start a startup?
TimingTeam
IdeaBusiness
Model
Money
❓

Timing is the biggest
key factor for success
http://www.ted.com/talks/bill_gross_the_single_biggest_reason_why_startups_succeed#t-216631

Why Now ?

Whether a startup will be a
success or not depend son
five factors; idea, product,
team, execution and timing.
-Sam Altman,

Why do you want to do that
start-up now?
Why not two year from now?
Why not two years ago?
- Michael Moritz ,
Sequoia Capital

Your target market keeps
evolving; the industry
ecosystem keeps getting more
efficient. You can achieve more
and more with less resources
-Naval Ravikant,
Angelist Founder
https://www.youtube.com/watch?v=2htl-O1oDcI

What is the history of the product/market,
you are tapping into?
Where is the market heading to?
What are the recent key trends or
technical break-throughs by which
a solution to the issue was realized?

0 25 50 75 100 125
52%
18%
Computer related start-ups
% of IPO of
1983-founded
% of IPO of
1985-founded
Mere two years difference made
a 3X difference in success

Why did Airbnb succeed?
Why was it the right timing?
❓

After the financial crisis
in 2008, many people who
couldn't pay rent or loans,
started posting on Airbnb

The growth curve of Airbnb
Financial
Crisis

Facebook started
functioning as
authentication infra

Market capital of Uber; 50 billion as of May 2015;
It’s been only 5 years since they were founded
What were the timing factors？
❓
Uber market
cap got higher
than Nissan

Right
Timing!
http://heidicohen.com/67-mobile-facts-from-2013-research-charts/

Sharing economy started taking off
（Sharing started becoming ‘cool’ among consumers)

You need an ability
to read the trends
and figure out what
will come the next.
- Katsuaki Sato
CEO, Metaps

Live in the future and
build something missed
in present moment
- Paul Buchheit

Can you find signs that will
impact how the world will
look like in 2025?

VHS DVD Down
load
Streaming ??
1980s’~
1990s’
1990s’~2
000s’
2010~
2015
2015~ 2020~
known of known
known of
unknown
unknown of
unknown
?
How will the world
change in 5-10
years?

VHS DVD Down
load
Streaming
2010~
2015
2015~ 2020~
known of known
known of
unknown
unknown of
unknown
VR live
Streaming?
Semi-Streaming
1980s’~
1990s’
1990s’~2
000s’
How will the world
change in 5-10
years?

① What is the history of the product/market, you
want to tap into?
② Where is the market heading?
③ What are the recent key trends or
technical break-throughs
by which solutions to the issue was enabled?
Exercise
❓

Aiming at innovator’s dilemma
❓

破壊的イノベーション
What is sustainable innovation?
・Sustainable Innovation takes place based
on an incumbent business model.
・To improve the product without a drastic change
・It’s important not to be disliked by existing customers

Sustainable innovation:
To provide a better solution
for known issues
to known customers

Today, Apple
reinvents the telephone.
- Steve Jobs
2007. 1. 9
https://www.youtube.com/watch?v=9hUIxyE2Ns8

Disruptive innovation
・Disrupting incumbent business models
・Generating a whole new value
・Brought by disruptive technology
・Creating a new market

Overconfident:
”We can crush them
anytime we want to”
Nosedive：
”OMG, our market
share is nosediving”
Too late:
WTF, there is no
way to recover
Withdraw:
Let’s withdraw
from the market

Black
Berry
How Blackberry declined
① One of Blackberry directors
“iPhone is not safe, it has poor
battery life and nobody likes
touch keyboards
③ WTF, we cannot
catch up
④ How can
we withdraw?
② OMG, this is
way ahead of us

iPhone3
launches
Blackberry
is dominant
iOS took more
market share
Blackberry
is dying..

Why can’t large
corporates bring
disruptive innovation?
❓

In most of business opportunities,
large corporates have advantages,
since they have more abundant resources.
Start-ups cannot win in a competition
where abundance of resources is an
important factor
However, large corporates
cannot respond well to
disruptive innovation because
the organization is designed for
the existing business model.
They eventually loose market share

Start-up can beat large corporates
since large corporates are
“too rational” and “too streamlined”

In large corporates,
departments with different functions are
organized not to bother each other

In large corporations,
there are some cases
where the innovation department is not
allowed to talk to customers directly.
They are often not allowed to allocate a
budget without
approval of the finance department.

Can you create precise five-
year financial projections to
get approval for your project
budget?
- Executive of
large corporate

- Executive of
large corporate
Executing the project as
planned become goal
Can you create precise five-
year financial projections to
get approval for your project
budget?

Apoorva, founder of Instacart, proposed
Instacart model to Amazon management; it
was turned down since the model was
contradictory to what Amazon had been
hugely invested in, i.e. warehouses and
logistics

Deliver goods
with good logistics
Looks like bad idea
but is a good idea
Hire someone
for grocery
shopping
Why Instacart idea was not
approved by Amazon
Good idea to
everyone
Looks bad but

“Disruptive innovation functions” should
be the focus when you create a start-up
organization

Start-up founders can build the product
while they are directly talking to customers
Unfair advantage of start-up

Joe Gebbia, Airbnb co-founder, was
engaging in customer support all day

Brian Chesky, co-founder of Airbnb,
went to customers’ places; he talked to
home owners/landlords one-by-one and took
room photos to promote Airbnb transactions

In a startup,
you don’t separate
your organization with function
The biggest unfair
advantage of startup

You should know a secret
other people don’t know.
- Peter Theil
from “Zero to One”

New
Combination
8 startup ideation framework
Dis-
Intermediation
Unbundle of
Bundled
Defragment
of fragmented
Under utilized
Resources
New
perspective
Arbitrage
Time machine

Dis-intermediation
Before Uber, taxi drivers were unable to drive their own
cars and they were required to pay a fee to licensing taxi
association to get certifications
Uber has diminished the intermediating process that taxi
drivers had to go though, i.e. paying the fee and getting
registered license. Anyone can become an Uber driver
with their own car with a fraction of fee/time

Taxi
Driver
Intermediating
Processes
Unhappy Users
（Taxis you can not catch,
unfriendly drivers）
Incumbent Taxi business

Uber X
Driver
Better UX
Happy Users！
Providing a platform
which diminishes
unnecessary processes

Unbundling of bundled
To unbundle incumbent service/product
which is ineffective as too many functions
were bundled.
For example, newspaper was unbundled
into curation media, classified ads and
ad-sense solutions

Article
Ads
Classified Ads
Boring content
Paid content
Newspaper
stand
Messanger
Boy
Incumbent newspaper business
Function and logistics are bundled
Unhappy Users

Easy-to find
classified ads
Search driven
Ads
Content
targeted
for each user
Optimizing for
users by unbundling
incumbent newspaper
functions
Happy Users！

Fintech startups are
unbundling bundled
services provided by
incumbent institutions,
i.e. commercial banks
https://www.cbinsights.com/blog/disrupting-banking-fintech-startups/

Fintech startups are
unbundling bundled
services provided by
incumbent institutions,
i.e. commercial banks

Defragmenting of Fragmented
Providing value by aggregating
information/functions which are
fragmented in many places

Unhappy User
Incumbent
purchasing process
It is time-consuming to
find the lowest price

Happy User !
With kakaku.com,
information was
aggregated in one place;
it is very easy to find
the cheapest price!

Utilizing under-utilized
resources
Generating cash flow by utilizing
dormant assets/resources; Airbnb
converted unused guest rooms to cash-
machines for home owners

No cash flow
from
unused rooms
Unhappy User
Before AirBnB

Happy User!
Cash flow
by renting out
unused rooms
After AirBnB

Uber X
Drivers
Better UX
Happy Users！
Providing a platform
which diminishes
unnecessary processes
Uber drivers can sell
part of their time

Free from existing
perspective
You limit your idea when you start
thinking in existing framework or start
benchmarking wth competitors
- you need to think out of the box!

High
Low
機能充実スタンプ編集容易性手軽さ実名登録

・Thrilling experience when you open a
message
・You can set message expiration period

高
低
機能充実スタンプ編集容易性手軽さ実名登録消去管理消去管理
Snapchat has brought
different perspective

https://techcrunch.com/video/snapchat-raises-1-8-billion-dollars-crunch-report/519622777/

Arbitrage
（Bridging supply and demand of
resources）

There is more demand for English learning in Japan than
supply. In the Philippines there are English teaching
resources
English students
- they can not study
anytime, anywhere
- Lesson fee is too
expensive
English teachers
- they don’t have much
opportunities
- they can’t earn money
since domestic market is
saturated
X

Bridging gap between two counties
＝Arbitrage
English teachers
・They have opportunities
to teach
・Since there are much
more demand - so you can
set price if you are
evaluated highly
English student
・They can learn
anytime, anywhere -as
much as they want
・Lesson fee is
inexpensive

New Combination
Providing valuable services by
combining resources which were
used in difference spaces

Buying magazine
and collect info,,
Shopping around by
spending tons of
money
“Ugh, I hate
this one”
“My closet is full of
junk clothes.
I spent too much money”
Spent too
much on clothes,,
My closet is
full of junk,,

Your stylist
will pick up
clothe
Box will
arrive
You can
try it on
If you don’t
like it, pack it and
return.
You pay
6,800 yen
per month
Convenient！
Reasonable！
Stylish！

Stylist
Free
Shipping
Free
Cleaning
Free
Closet
Air Closet was realized by
combining 4 difference services

Quality of issue
Quality of
solution
High
HighLow
Low
高い
専門性
業界の
知識
High
quality
idea
Low
quality
idea
Crazy
Stylist X Free-shipping
X Free-cleaning
Operational
Experience
inEC
Supplier
network

Time machine
Bringing business model/product in
one market to different market

Founded in 2011
・On-demand service for ride-share (2
wheel cars)
・Providing services in Jakarta,
Indonesia - the city with the world’s
worst traffic
Founded in 2009
・On-demand service for ride-share
(4 wheel cars)
・Started in cosmopolitan areas of
US and spread to 60+ countries

Register credit
card
Enter pick-up
location
Matched drivers
will
pick up
Make a payment
and evaluate
drives

Enter pickup
location and
destination
Top-up your
money as pre-
paid
Matched driver
will come and
pick up
Make a payment

Time machine model
（Importing business model from US）

There are many unknown secrets out
there. Entrepreneurs discover them and
to create businesses based on them.
- Peter Theil
from “Zero to One”

Calculate Total Addressable Market
TAM is short for “Total addressable market”; it
indicates the maximum market size the business
can address when all needs are met
X＝
100 million USD per year for TAM is a
starndard criteria by which VCs are
looking at startup and thye decide
whether they will invet the startup or not

Aiming towards
large market
Other companies
also realize the
market size
Market is
getting
crowded
Startups are
at a disadvantage
due to the lack of
resources
Startup will
eventually loose
Startup should not aim
towards the market which is
already large and proven
Large corporates
have advantages
over startups
It is a competition of resources,
operation
and price of product

Current
market
size
Low
High
not
existed
Market growth potential
Low High High, but
nobody knows
Matured
space
Large corporates
hugely invested
Many start-ups
get in the space
Some startups
start to get in
the space
No one
has tapped
into yet
Your target
！

In your startup,
you don’t want to put yourself
in a full-scale war

Amazon prepared overwhelming
number of selection for one specific
product (books)

Facebook focused on local war - they took on
one school after the other

We optimized our product
as we increase the number of
school accounts - we added
features and went to
the next school after confirming
the feature worked well.
- Mark Zukerburg
CEO, Facebok
https://www.youtube.com/watch?v=MGsalg2f9js

You do’t need
a detailed business plan

AirBnBも最初は悪いアイディアに見えた
Write a Lean Canvas
Lean canvas is
a start-up frame work
invented by Ash Maurya,
author of Running lean.
You can easily visualize start-up business models パスとは、

Business Model Canvas
❓

Business model canvas is for a regular corporate or intra-preneurs.
Note that you should not focus too much on key partnerships,
key resource for startup is time, customer relationship is all about talking to
customers and key activities are building product and talking to customers
X
X
X
Don’t use Business Model Canvas
X

There are three advantages in lean canvas
Agility: you can write it quickly
Simplicity: you can write important
aspects of the business in simple manner
Mobility: you can update/share fairly easily
Ash Maurya
Author of “Running Lean”

１２
３
４
５
６７
８
９
This is the order you want to write lean canvas

How to write
lean canvas
1. Issue: For target customer segment, what are the top 3
issues to be solved
2. Customer segment: Specify users. Clarify what kind of
early adaptor will be there
3. Unique value proposition: What kind of value you are to
provide to the customers
*These three elements are most important piece at
initial phase
１２３

Early adopter will determine
your business model

To become an expert of customer
issues and
to make something
customers want

4. Solution: At the beginning, you haven’t verified whether the issue really
exists or not; try to think of a simple and valid solution
5. Channel: There are not so many options when it comes to channel
selection; you will have to collect users to talk to
６. Revenue model: You don’t have to worry about it too much, but do not
provide the product for free, put a price tag on it
*It will be changed after the product will be released; write it in
simple manner
４
５
６
How to write
lean canvas

７. Cost structure: List up the costs. How much are the total costs until
the point you will launch the product
８. Key metrics: Write your key metrics of your business success. Try
to use AARRR, pirates metrics
９. Unfair advantage: This is difficult to fill-in; you can fill it in last. You
can write secret, insider information, expert network, dream team,
network effect, community and current customer
*It will be changed after the product will be released; write it in
simple manner
８
９
７
How to write
lean canvas

The most precious
resource for start-up is time.
Start-up teams who learn the most
before burning all the resources
will eventually win.
- Ash Maurya

❓
Exercise：
Write a lean canvas for the
dating app Tinder

You can start swiping people
shown on your screen.
if you like the person,
swipe right,
if not, swipe left
You download
and sign-up with
your Facebook account
Set up conditions
for person
you want to match
with.

You can start
a chat with
the person
If it is like-like between
you and your counterpart,
you’ll get a notification
“It’s a match”
You can probably
meet him/her
in person?

If you pay a monthly premium
for 1200 JPY or 10 USD
you can unlock the restrictions
Premium service:
You can swipe unlimited times
You can change your base location
Ads won’t be displayed

Let’s create a lean canvas of Tinder by
splitting into 2 teams
❓

Lean Canvas of “Tinder”
Males/Female
s looking for
casual but
non-fake
matching
In matching site,
there are too
many fake
accounts
Authentication with
Facebook
Media
Blog
Providing
opportunity for
casual but
authentic like-
like matching
Number of sign-ups
for premium
services
Totally unique
business model
Premium service
System development
(Facebook connection
large volume process)
There are no
casual like-like
matching service
Retention rate of
premium service
Advertisement
Matching algorithm
with location/interest
User acquisition

Males/Female
s looking for
casual but
non-fake
matching
In matching site,
there are too
many fake
accounts
Authentication with
Facebook
Media
Blog
Providing
opportunity for
casual but
authentic like-
like matching
Number of sign-ups
for premium
services
Totally unique
business model
Premium service
System development
There are no
casual like-like
matching service
Retention rate of
premium service
Advertisement
Matching algorithm
User acquisition
Why do you use
lean canvas?

-Steve Blank
From Start-up owner’s manual
If you ask 10 people
to define their business model,
there always will be
10 answers.

Males/Female
s looking for
casual but
non-fake
matching
In matching site,
there are too
many fake
accounts
Authentication with
Facebook
Media
Blog
Providing
opportunity for
casual but
authentic like-
like matching
Number of sign-ups
for premium
services
Totally unique
business model
Premium service
System development
There are no
casual like-like
matching service
Retention rate of
premium service
Advertisement
Matching algorithm
User acquisition
By using lean canvas,
you can communicate
more efficiently to your team
with the same underlying
assumptions in mind

Document sharing
Common understanding

Common understanding
＋ Convincing
Visualizing process/thoughts/
hypothesis

What is a Lean Startup?
With lean startup, you build the product for
new idea or concept quickly (build MVP)
and iterate build-measure-learn cycle
based on customer’s feedback on your product.
Your hypothesis is validated in the iteration cycles
By using the lean start-up method, start-up
founders will be able to find product-market-fit
before burning out all resources
Build
Ideas
Product
Mea
sure
Data
Learn

Learning timing
comes too late
with a waterfall method.
You can learn more
by releasing
product early

You have to find a functioning business model by
pivoting before you burn resources

VP of Saleはいらない
http://www.slideshare.net/ashmaurya/10-steps-to-productmarket-fit

Pivot is
to change strategy
without changing vision.
- Eric Ries
Lean Startup

You burn through
all resources
before you find
the right
business model
Achieve PMF
by finding right
business model
though pivots
before time-out

With your lean canvas, your team can
decide when and where to pivot.
You can make a decision with everyone having the same
picture of the business model
Team
Lean canvas of your startup

Start-up is a game you win with
your team
❓

If you don’t share the same business model
and the team members are not fully convinced
by the pivot, it sometimes leads to
a falling out in teams/startup

Pivot Best Practices

Groupon started as “the Point”,
a signature collection service
to support political movement.
They pivoted to coupon model
by original vision remained, i.e.
empowering individuals by
aggregating negotiation power.
Pivot of Groupon

Lean canvas of ”The point”
Political
activist
One person
does not have
influence
Collecting
signatures
Web site
Blog
Create impactful
movement by
aggregating
individual
signatures
N/A
Charging to
lobbyists
Number of
signatures
Site operation
User acquisition

Lean Canvas of Groupon
Consumers
want to buy
at discounted
price
Getting
discount
with co-
purchasing
Web site
SEO, SEM
Enhancing
bargaining
power by
aggregating
purchase
power
Number of
Completed
deals
Scale
merit
Commission
for deals
Site operation
User acquisition
Sales to retails
Pivot
One person
does not have
bargaining
power
Customer
Segment
Pivot

Groupon went IPO with 16.5 billion USD in 2011

Pivoting is about finding
the business model that works

Key: How much did you learn
while you are running product-iteration cycles?

In the beginning, Instagram was
a location sharing service called “burbn"

Build
Ideas
Product
Mea
sure
Data
Learn
Founders found out that
many users used
the application
to share their photos

Which one main function
should remain
if you can only keep one?

Location based service
where you can share photos
Photo-sharing service
which also has a location based
check-in function
Pivot !

Ask
“How is the user actually using the application”,
do not ask
“How the application should be used by users”.
Iteration should be brought by
customer-pull, i.e. what customers want

18 month after Instagram was founded,
they were acquired by Facebook for 1 billion USD
https://techcrunch.com/2012/04/09/facebook-to-acquire-instagram-for-1-billion/

How much did you learn while
you are running iteration cycles?
(Ex, product usages you could not initially predict,
or user segments, which you could not initially predict)
Pivot ! Pivot ! Pivot !

Easy way
to death
Hard way
to PMF

Easy way
to death
Building a product
you want to
build and then release it.
Measuring vanity metrics to
justify your bias and
being reassured that
you are doing the right things.
Burning out all resources
before achieving PMF
Hypothesizing customer issue
and validating it
in the hard way;
verifying by directly talking to
paid customers.
Listening to
customer feedback,
especially harsh feedback,
and keep pivoting
your business model.
Achieving PMF before
burning out
all the resources
Hard way
to PMF

Agenda
① Idea Verification : What is good start-up idea?
to the issue?
exist?

Validate on
Hypothesis
2-1 2-3
Clarify
Assumptions
By using
Javelin
board,
clarify premises
of the Issue
2-2
Build
Hypothesis
Build hypothesis
（Persona,
Empathy map, etc）
Validate whether
the customer issue
exists

Transforming mere idea into
high quality hypothesis

Good idea
Idea looks bad
Most of ideas which
look bad are
just bad ideas

Most important question:
Does the issue really exist?

X
Never start with
“What do I want to build?”

Why are we
using the iPhone?
❓

Users use iPhone
since it solves
problems
iPhone

It is not because iOS7 is installed

Why do many
start-ups skip
this question?
❓

Because we all have bias;
“my problem is your problem too,
because the problem is obvious to me”

By conditioning
for a few seconds,
you are biased！
”I can see
an old woman”
”I can see
a young lady”

We all have biases through our perspective.
In other words, we are seeing the world
with the way we want to see it.
This is called “Confirmation bias”

Confirmation bias is
an innate human behavior:
we are always collecting information
to prove that our thoughts/beliefs
are correct

Keep one thing in your mind
when you start a startup:
the issues and solutions
you initially make as assumptions
will often be discovered to be false.
-Cindey Alperez
Author, “Lean Customer Development”
“Lean Customer Development: Building Products Your Customers Will Buy” by
Cindy Alvarez

It’s important to
Visualize/verbalize
how you are perceiving
the world

Big difference in perspective
among founders occasionally leads to
a falling out in the team,
and the startup itself

Lean canvas is the tool
by which each member can visualize and
confirm the “business model”
Team
Lean canvas of your business

Misunderstanding led by “lean
startup”
“I need to release MVP asap
no matter what"

Build
Ideas
Product
Mea
sure
Data
Learn
Building MVP based
on idea – it usually
takes several month
Make MVP
people don’t want
ll
The largest
waste in startup

Build
Ideas
Product
Mea
sure
Data
Learn
Product
Solution-fit
Customer
Problem-fit
Create
Plan A
Verify riskiest
assumptions before
building MVP
→ Do this process first!
You can save
resources

①
②
High quality
idea
Low quality
idea
Quality of issue
Quality of
solution
High
HighLow
Low
Conducting a thought
experiment in order to
enhance the quality of
issue

Making assumptions
about your customer (creating a persona)
and focusing on their emotional status

Within Persona sheet,
you are to describe
the person who is suffering
from the issue -
the issue you are trying to solve

If there are multiple user models (Persona), the verification process
won’t go so smoothly - as a result, it is hard to reach consensus in
ashort period. It is important to presume one Persona - you can
correct it later
Make assumption of
the most plausible
Persona

Make a hypothesis on Persona
How does he(she)
look like?
What’s the
impression
Age, occupation,
gender, income,
hobby, life style,
what kind of work
does the person do
What does the
person want
to achieve
What are
the person’s
painful
issues
What kind of
tasks/operation
does he(she) do?

Please write a Persona who has the
issue, which you wrote about in the
previous exercise
Exercise
❓

Elaborating the Persona
with Empathy Map

Take a closer look at user sentiment
It is important to seek specific complaints and pains
by taking a closer look at user sentiment.
People are sometimes tricky - they do things which
they actually don’t want to do. You can find answer
when you take a close look at this contradicting
behavior.
It is important to think of their phycological status
when they are doing various behaviors

Honda - Super Cub
- Sold more than 96 million units
Super cub

Persona of Super Cub -
a delivery boy of Soba-noodle restaurant

You need to implement a pedal clutch since a
delivery boy can not manipulate clutch with
hands

Easy to straddle
With this design, a delivery boy can ride
easily without dropping Soba noodles

Write empathy map based on your
Persona
Exercise
❓

The Persona image you build
depends on your experience and perception
of the world

Team
It is important that everybody on the team is on the same
page by visualizing the Persona/Empathy Map

Clarify current user
experience

You want to specify a detailed
user story since just writing Persona is
too ambiguous

You can clarify
step-by-step story
of the user by using the
user story framework

Advantages of user story
Everyone can have the
same assumptions about
users and user
experience
You can decrease
your blind spots
You can explore
ideas as a team in
real-time

Step 1：
Confirming persona, empathy map and lean
campus you’ve previously created

ステップSteps
Step 2
Write overall steps
which persona is experiencing

Detailed
Steps
Step ３：
Write detailed steps
What kind of activities does the person
do specifically? If there are alternative
activities, what are they?
Steps

Step ４：
Write emotional status of the persona
(Use curve and facial expressions)
Emotional
Status
Detailed
Steps
Steps

Step 5：
Write real intentions of Persona - what kind of
negative/unpleasant feeling does the persona suffer from
Real
intention
Real
intention
Real
intention
Emotional
Status
Detailed
Steps
Steps

Arriving at Airport Moving to Hotel Checking-in Hotel
Land
税関
荷物
ピック
両替
Wifi
connecti
on
Station
store
Buy
ticket
Move
Waiting
train
Train
Arrives
Train
leaves
Arrive
destination
wifi
connect
Get off
Train
Look for
Hotel
徒歩
移動
Arrive
Hoel
Check-in
Room
wifi
Shower
繋がらな
い
Issue hypothesis:
Usability of free Wifi is not good -
inbound tourists in Japan are frustrated
Confirming
pinpoints of
the persona
Real
intention
Real
intention
Real
intention
Emotional
Status
Detailed
Steps
Steps

Try to clarify
unpleasant emotional
status of the person
Why is the persona
unsatisfied?

・Note the keyword/idea
・Try explaining the idea to others
・Put post-its on the wall - participants can
see, discuss, add and move
Key points when you are
mapping

Verifying assumptions of the issue
by using Javelin Board

What is Javelin Board?
It is a framework where you can
verify
customer/issues/assumptions/solu
tion through dialogue with actual
potential customers

Start Brainstom from here Experiment 1 2 3 4
Customer
Issue
Solution
Most
uncertain
premise
Verification
method/criter
ia
Result
Key
learning
Who is your customer
What are their issues?
What is solution to the
issue?
What are assumptions
you want to verify
Javelin Board
https://www.youtube.com/watch?v=F-5Iyj9A1MU

Step１：
Brainstorm customers based on Persona, Empathy map lean canvas
and user story, which you previously created. Pick up most plausible
customer and move it to right side of the table

Step２：
Brain storm issues - what kind of issue does the selected
customer have. Pick up the issue you want to take on and move it
to right side of the table

Step ３：
Brainstorm valid solutions to the selected issue - pick it up and
move it to the right side of the table

Arriving at Airport Moving to Hotel Checking-in Hotel
Land
税関
荷物
ピック
両替
Wifi
connecti
on
Station
store
Buy
ticket
Move
Waiting
train
Train
Arrives
Train
leaves
Arrive
destination
wifi
connect
Get off
Train
Look for
Hotel
徒歩
移動
Arrive
Hoel
Check-in
Room
wifi
Shower
繋がらな
い
Issue hypothesis:
Usability of free Wifi in Japan is not good -
inbound tourists in Japan are frustrated
Confirming
pinpoints of
the persona
Real
intention
Real
intention
Real
intention
Emotional
Ups &
Downs
Detailed
Steps
Steps

Tourist to
Japan
Can’t
use
wifi
Extra data
capacity with
ads

Premise ⑤
Hotel wifi
is slow
Premise ⑥
Airport wifi
is slow
Premise ⑦
Tourist
frequently
use wifi
Usability of
free Wifi is
not good
Issue hypotheses
Premise ①
Tourists
do not have
pocket wifi
Premise ②
Tourists
have
smart phone
Premise ③
Tourists
don’t know
fast wifi spot
Premise ④
Tourists
consumes
heavy content
i.e movie
Brainstorm
the assumptions
of issue hypotheses

Impact: Large
Impact: Small
UncertainSelf-evident
(Need to verify)（No need to verify）
Assumption you need to
verify in the first place
Step 4: Confirm premises for the issue hypothesis and map them in the
perspective of magnitude of impact (Impact to the validity of the issue) and
magnitude of certainty
Premise ①
Tourists
do not have
pocket wifi
Premise ④
Tourists
consumes
heavy content
i.e movie
Premise ②
Tourists
have
smart phone
Premise ⑤
Hotel wifi
is slow
Premise ③
Tourists
don’t know
fast wifi spot
Premise ⑥
Airport wifi
is slow
Premise ⑦
Tourist
frequently
use wifi

Pickup uncertain yet impactful assumptions of
the issue. If the assumption is not valid, the issue
will no longer be valid

Step 5: Determine verification method and its
criteria, e.g. 6 out of 10 interviewees say “yes” in
the interview

Talk to actual users and verify
the premises

Set up one-on-one interview in
order to get honest feedback.
*Avoid one-to-N interviews, since you cannot
hear open opinions

Interview 10 potential users, and
validate the premise

Based on learning from the result, conduct brainstorming again.
Decide second plausible combination of customer, issue, and
solutions

Validate the most uncertain hypothesis through interviews
- you can verify thoroughly by running verification for 5-6
times

Premise ⑤
Hotel wifi
is slow
Premise ⑥
Airport wifi
is slow
Premise ⑦
Tourist
frequently
use wifi
Usability of
free Wifi is
not good
Issue hypotheses
Premise ①
Tourists
do not have
pocket wifi
Premise ③
Tourists
don’t know
fast wifi spot
Premise ④
Tourists
consumes
heavy content
i.e movie
Premises support
that the Issue does exit
!
Premise ②
Tourists
have
smart phone

Five principles for conducting good interviews
1. Focus on listening - not pitching:
It is not about you talking; it is about pulling insights from interviewees
2 .Focusing on now - not the future:
The current action/behavior is the best hint to make a hypothesis for the future.
Assumptions for the future are usually wrong
3 Focusing on the concrete - not abstract:
Ask “how many times did that happen” rather than “how often does it happen?”
Ask “please describe actual operation”
Ask “How much do you pay in order to solve issue” rather than “how much
would you pay when the product will be launched”
Ask very specific questions so that you can pull insights

4 Focusing on procedure (or story) - not outcome:
Do not ask the outcome. You should ask step-by-step procedure or
a story, so that you can capture the context/background of the
issue
5 Focusing on problems first - not features
Try to avoid talking about your product. Focus on issues customer
is suffering from/struggling with
Five principles conducting good interviews

1 How do you conduct current [task or operation]
When, what purpose, where, with whom and what kind of tools do you use?
Could you give me work-thru of [task or operation]?
If possible,could you show me the walk-thru?
2 Since when have you been engaged in [task or operation]?
3 When you do [task or operation], are there any issues, bottle necks or inefficient things?
4 Do you have your own way of doing [task or operation] ?
5 Who are the stake holders involved while you are doing [task or operation]?
6 Why do you feel pain when you are doing [task or operation]?
7 How do you complete [task or operation] now?
If you have tools, application or work-around, please let me know
8 Can you describe step-by-step procedure of [task or operation]?
9 How much time/money does it cost? What is the most inconvenient part?
List of questions for a problem interview

Shut-up and Listen to the customer!
Listening to the customer is key

Ask
open
questions

Be quiet for
next 60 seconds

Dig deeper for answers
“I see, that’s very interesting. Can
you elaborate on it more?”

You have to treat the user
as your date.
And good listeners win
the date, since they can
find out what their
date wants.
Kevin Hale
Partner, Y-combinator

Become a disciple of the user
It’s the right attitude when you do interviews

Taboo Question
Why don’t you do XXX in
order to solve [Issue] ?

・Disciples learn from the masters
・Masters(users) are experts of [Tasks],
・But they are not expert of describing
the issues they have.
・Your job is to clarify what the master says
Key Points

By using the KJ method,
you can organize the interview contents
into a logical structure

Procedure of KJ method
①Collect
interview data
② Categorize
the data
into small units
③ Organize
these units
into groups
④ For each group,
add appropriate
label
⑤ Put into
logical structure
so that you can
explain logically
⑥ Specify what
the true cause of
the issue is

Take notes for following interview
Exercise
❓

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Put these units
into small groups
and put a label for each
Current learning method
Unsatisfied with
current way
Ideal method
Issue of content Issue of deliverable
Issue of learning method Low retention
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Gap
Organize them logically
Current learning method
Unsatisfied with
current way
Ideal
method
Issue of content Issue of deliverable
Issue of learning method Low retention
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Team
Repeat until your team is fully convinced

Typical reactions of customers
who likely have issues：
・Doing [task or operation] is very troublesome
・In doing [task or operation], I’m trying to look for solution by
myself
・There are some barriers which make [task or operation] more
difficult

Qualification Question:
• The interviewee was qualified as evangelist (the person recognizes the issue and seeks
solutions proactively or has work-around solutions now
• Did the interviewee tell you the truth?
• Did you interview enough people?
Existential Question:
• Did you confirm that the customer has an issue that you proposed?
★ How severe is the issue? How often does the issue occur?
• Did customer show strong emotion to the issue?
• Can the issue be solved?
• Does customer believe the issue should be solved?
• Was there any constraint by which the customer cannot solve the issue?
Alternative Question:
• Does customer have alternative solution or make investment in order to solve the issue?
• How much pain was there for using the alternative?
Problem interview check points

Validate on
hypothesis
Validate whether
the customer issue
does exist or not
2-1 2-3
Clarify
premises
2-2
Build
hypothesis
Build hypothesis
（Persona,
Empathy map, etc）
If your assumption of the issue was not
right, you need to reconsider the issue
itself – go back and buld a new hypotheis
By using
Javelin
board,
clarify premises
of the Issue

Agenda
Do you provide an appropriate solution
to the issue?
exist?

By interviewing potential users, you
have confirmed the painful issue
really exists

In Problem-solution-fit phase, you
will verify solutions that you will
potentially provide for the issue.

Create
UX
Blueprint
Create
blue print
of to-be UX
Product
Interview
3-1 3-2 3-3
Build
Prototype
Build prototype
based on
solution interview
Conduct interview
by showing
prototype

Create a blueprint of solution based
on the issue
you’ve validated in previous step

ステップStep
Detailed
Step
Validated
issue
Validated
issue
Validated
issue
Validated
issue
Confirming validated issue

ステップStep
Detailed
Step
Solution
Think of solutions that will potentially solve the pain
Verified
issue
Verified
issue
Verified
issue
Verified
issue
Verified
issue

Set up user interview in order to
validate the solution

They could not
imagine what a car was like
since they’d only
ridden horses

Nevertheless,
you should ask
what is “magic lamp”
for customers
❓

- Steve Jobs

1 If you have a magic lamp that can do anything you want to do,
how would you have [task or operation] completed?
2 Did you find the solution which is close to the [magic lamp]?
3 Why don’t the customers use the solution?
4 How much time/effort can you save when you use the magic lamp?
5 What is the budget you can get for the magic lamp product?
(Ask yourself)
Do you have a clear product image such that customer will be
impressed and start using the product?
Closing comment: When the prototype of magic lamp is built,
can we meet up again?
？
Question list for solution (Magic lamp）interview

Typical reactions
by potential future customers
“It would be really helpful if we have [magic lamp solution]”
“If I have [magics lamp solution], I would use it this way...”
“I would like to have the solution immediately”

• How does the customer describe [magic lamp]?
• Is the [magic lamp] technically feasible?
• Are there any barriers for the customer to purchase or use the
product if the [magic lamp] can be built?
• Can the user use the [magic lamp] in an every day context?
• If the customer won’t buy the [magic lamp], what would be the
reason[s]?
Check points for Solution Interview

Issue
Issue
Issue
Issue
Issue
Think of the potential methods to provide solution
ステップStep
Detailed
Step
Solution
How to
Provide

Point to note：
Try not to automate the process
with a system or optimize the process itself
from the beginning

Zappos -
they did not build any system for the
first product launch

Before building a drop shipping system, they operated entire logistics
manually - when they got an order, they went to shoe store nearby,
purchased ordered shoes and delivered to customers
They operated entire logistics manually when they
launch the first version product

Issue
Issue
Issue
Issue
Issue
Try not to automate too much
ステップStep
Detailed
Step
Solution
How to
Provide

Do not spend
your resources to add
nice-to-have features

Try to focus on
“One extraordinary feature”

Amazon provided overwhelming number
of title for one specific product (books)

Issue
Issue
Issue
Issue
Issue
ステップStep
Detailed
Step
Solution
How to
Provide
Create
corresponding
product UI

Paper-prototype Wireframe Coded MVP
Low High
Fidelity（Accuracy in detail）

Create prototype from post-its
By using post-its,
you can create prototype

Vertical pages you want to test.
You want to create a detailed flow to
the point when the issue will be solved
With horizontal pages, you can
explore from the top page

Top Page
Vertical pages you
want to test.
You want to create
a detailed flow to
the point the issue
will be solved
Horizontal pages
from top page

Fidelity（Accuracy in detail）
Paper-prototype Wireframe Coded MVP
Low High

Wireframe Prototype

Balsamiq:
You can build a wireframe
with this web app

Drag & Drop
You can create page
intuitively
with Drag & Drop

By using an application called POP,
you can convert a paper prototype
into a clickable wireframe

You can create a moving wireframe
by using Pratt

Several months → Several days
If you start coding, it would take months;
but a prototype can be created within several days

The most precious
resource for start-up is time.
Start-up team, who learn the most
before burn all the resources,
will eventually win.
- Ash Maurya

Get out of
the building with a prototype
and talk to users!

Conduct product interviews
for the part you want to test

Top Page
Vertical pages
you want to test.
you want to create
a detailed flow to
the point the issue
will be solved
Horizontal pages
from top page

Let’s assume you are
in [situation]
and about to do [task]
Let’s say this is
your smart phone
When you start the application,
this screen will show up.
What would you do?
When press that button,
this next screen show up.
What would you do next?

What would you do
in order to conduct [task]?
What would you do
in order to conduct [task]?
As a result, you have this screen.
Do you think [task] was completed?
Task was completed and
came user was returned
to original screen

Explain horizontal pages where
you can explore from the Top Page

If you press here,
a navigation menu will appear
on the left side
Once you press here,
this will show up

Product Interview check points
• Did you get a reaction from the customer like “I want this
immediately”
• Did the customer struggle using the product?
• Did you clarify what kind of MVP you should build in order
to solve the issue?

Create
UX
Blueprint
Create
blue print
of to-be UX
Product
Interview
3-1 3-2 3-3
Build
Prototype
Build prototype
based on
solution interview
Conduct interview
by showing
prototype
If the solution was not robust enough,
you want to re-visit the blueprint
creation step

Issue
Issue
Issue
Issue
Issue
ステップStep
Detailed
Step
Solution
How to
Provide
Revisit blueprinting of solution

Agenda
① Idea Verification : What is good start-up idea?
to the issue?
Does the market for the solution exist

Reviewing previous processes

Build
Ideas
Product
Mea
sure
Data
Learn
Product
Solution-fit
Customer
Problem-fit
Idea
Verification

In summary, you confirmed the issue exists,
you were able to describe what a valid solution is like and
were able to create a prototype; the value was validated by
users.
In this phase, you will build the actual product and launch it.
You will measure how sticky users are using it and get
feedback.
You will iterate product until you reach the PMF status i.e.
“You have built something people want”
Product-Market-fit

Many start-up founders
build MVP (coded MVP)
without validating
the existence of the issue or
verification of the solution,
Without clear issue validation,
building a coded MVP would
waste your time/resources.
In other words,
building MVP prematurely
is one of the biggest reasons
why startups fail
❓

Build
Ideas
Product
Mea
sure
Data
Learn
Building MVP based on
idea - it usually
takes several month
Making an MVP
people don’t want
ll
The largest
waste in startup

Being misled by Lean Startup,
many startup founders sometimes build a coded
MVP without validating issue/solutions first; this
will lead to “premature scaling”

Product-market-fit
Build MVP
Ship MVP
to 1st User
and Learn
Measure
Product
Performance
MVPを
作って何を
学ぶか検証
Talk to
Users
Verify initiatives
with hooked model
Evaluate Initiatives
for Product
Improvement
and implement
4-1 4-2 4-3
4-4 4-5 4-6
Talk to users
to verify product
qualitatively
What
would you Learn
with MVP
Fill in MVP sheet
Fulfill MVP Qualification
Select MVP type
and build it
Deliver product
to evangelist
users and learn
Measuring with
innovation
metrics Iterate until you will achieve
PMF

Build
Ideas
Product
Mea
sure
Data
Learn
Product
Solution-fit
Customer
Problem-fit
Idea
Verification
Build MVP
and release

Build
Ideas
Product
Mea
sure
Data
Learn
Product
Solution-fit
Customer
Problem-fit
Idea
Verification
Verify with
Data

Build
Ideas
Product
Mea
sure
Data
Learn
Product
Solution-fit
Customer
Problem-fit
Create
Plan A
Run a iteration cycle
until you will achieve
product-market-fit

What is an MVP？
MVP = Minimum Viable Product
❓

Build
Ideas
Product
Mea
sure
Data
Learn
With a Lean startup, you build the product for
new idea or concept quickly (build MVP)
and iterate a build-measure-learn cycle
based on customer’s feedback on your product.
Your hypothesis is validated in the iteration cycles
By using the lean start-up method, start-up
founders will be able to find product-market-fit
before burning out all resources
What is a Lean Start-up?

Viable
Product
Products
built by companies
better-financed
than you
Minimum
Product
Crappy products
nobody wants to
use
Minimal + Viable =
Good products for a
startup to build
MVP

How to start a startup - complete version

How to start a startup - complete version

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