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RUNNING LEAN
A systematic process for iterating your web
application from Plan A to a plan that works
ASH MAURYA
@ashmaurya
http://www.ashmaurya.com
Thursday, November 4, 2010
The sad statistics of Plan A.
Thursday, November 4, 2010
9/10
startups fail
Thursday, November 4, 2010
66%
drastically change
their original plans
Thursday, November 4, 2010
Not a better Plan A.
But a path to a plan that works.
Thursday, November 4, 2010
Running Lean is a systematic process for iterating
from Plan A to a plan that works.
Thursday, November 4, 2010
Agenda
1. What is Running Lean?
2. What does a Lean Startup look like?
3. How can you use Lean to dene and measure progress?
Thursday, November 4, 2010
Agenda
1. What is Running Lean?
2. What does a Lean Startup look like?
3. How can you use Lean to dene and measure progress?
Thursday, November 4, 2010
About Me
Thursday, November 4, 2010
Practice Trumps Theory
Thursday, November 4, 2010
What is Running Lean
Customer Development
+
Lean Startup
+
Bootstrapping
Thursday, November 4, 2010
Requirements ReleaseDevelopment QA
Customer Development
Thursday, November 4, 2010
Requirements ReleaseDevelopment QA
Some learning
Customer Development
Thursday, November 4, 2010
Requirements ReleaseDevelopment QA
Some learning Most learning happens here
Customer Development
Thursday, November 4, 2010
Requirements ReleaseDevelopment QA
Some learning
Very little learning
Most learning happens here
Customer Development
Thursday, November 4, 2010
A synthesis of Customer Development, Agile,
and Lean Thinking.
Lean Startup
Thursday, November 4, 2010
Funding with customer revenue.
Bootstrapping
Thursday, November 4, 2010
Startups that succeed are those that manage to iterate
enough times before running out of resources.
- Eric Ries
Speed
Thursday, November 4, 2010
Get out of the building.
- Steve Blank
Learning
Thursday, November 4, 2010
Right Action, Right Time.
- Bijoy Goswami
Focus
Thursday, November 4, 2010
Speed, Learning, Focus.
Thursday, November 4, 2010
There are no silver bullets
Thursday, November 4, 2010
Agenda
1. What is Running Lean?
2. What does a Lean Startup look like?
3. How can you use Lean to dene and measure progress?
Thursday, November 4, 2010
1. Document your Plan A
2. Systematically Test your Plan A
Thursday, November 4, 2010
There is an “I” in Vision
Smart people can rationalize anything.
Thursday, November 4, 2010
Business Model vs Business Plan
Thursday, November 4, 2010
Business Model vs Business Plan
A document investors make you write
that they don’t read
Thursday, November 4, 2010
Business Model vs Business Plan
A single diagram of your business
Thursday, November 4, 2010
Problem
Top 3 problems
Solution
Top 3 features
Unique Value
Proposition
Single, clear,
compelling
message that
states why you
are different and
worth buying
Unique Value
Proposition
Single, clear,
compelling
message that
states why you
are different and
worth buying
Unfair
Advantage
Can’t be easily
copied or bought
Customer
Segments
Target customers
Problem
Top 3 problems
Key Activity
Activity that drives
retention/revenue
Unique Value
Proposition
Single, clear,
compelling
message that
states why you
are different and
worth buying
Unique Value
Proposition
Single, clear,
compelling
message that
states why you
are different and
worth buying Channels
Path to
customers
Customer
Segments
Target customers
Cost Structure
Customer Acquisition Costs
Distribution Costs
Hosting
People, etc.
Cost Structure
Customer Acquisition Costs
Distribution Costs
Hosting
People, etc.
Cost Structure
Customer Acquisition Costs
Distribution Costs
Hosting
People, etc.
Revenue Streams
Revenue Model
Life Time Value
Revenue
Gross Margin
Revenue Streams
Revenue Model
Life Time Value
Revenue
Gross Margin
Revenue Streams
Revenue Model
Life Time Value
Revenue
Gross Margin
Thursday, November 4, 2010
The 3 Stages of a Startup
Problem/Solution
Fit
Product/Market
Fit
Scale
Thursday, November 4, 2010
Validate Problem/Solution Fit
Problem/Solution
Fit
Product/Market
Fit
Scale
Do I have a problem worth solving?
Thursday, November 4, 2010
Problem
Top 3 problems
Solution
Top 3 features
Unique Value
Proposition
Single, clear,
compelling
message that
states why you
are different and
worth buying
Unique Value
Proposition
Single, clear,
compelling
message that
states why you
are different and
worth buying
Unfair
Advantage
Can’t be easily
copied or bought
Customer
Segments
Target customers
Problem
Top 3 problems
Key Activity
Activity that drives
retention/revenue
Unique Value
Proposition
Single, clear,
compelling
message that
states why you
are different and
worth buying
Unique Value
Proposition
Single, clear,
compelling
message that
states why you
are different and
worth buying Channels
Path to
customers
Customer
Segments
Target customers
Cost Structure
Customer Acquisition Costs
Distribution Costs
Hosting
People, etc.
Cost Structure
Customer Acquisition Costs
Distribution Costs
Hosting
People, etc.
Cost Structure
Customer Acquisition Costs
Distribution Costs
Hosting
People, etc.
Revenue Streams
Revenue Model
Life Time Value
Revenue
Gross Margin
Revenue Streams
Revenue Model
Life Time Value
Revenue
Gross Margin
Revenue Streams
Revenue Model
Life Time Value
Revenue
Gross Margin
Thursday, November 4, 2010
Achieve Product/Market Fit
Have I built something people want?
Problem/Solution
Fit
Product/Market
Fit
Scale
Thursday, November 4, 2010
Requirements ReleaseDevelopment QA
Some learning
Very little learning
Most learning happens here
Thursday, November 4, 2010
Requirements Release
Customer
Discovery
Customer
Validation
Continuous
Deployment
Thursday, November 4, 2010
Problem
Top 3 problems
Solution
Top 3 features
Unique Value
Proposition
Single, clear,
compelling
message that
states why you
are different and
worth buying
Unique Value
Proposition
Single, clear,
compelling
message that
states why you
are different and
worth buying
Unfair
Advantage
Can’t be easily
copied or bought
Customer
Segments
Target customers
Problem
Top 3 problems
Key Activity
Activity that
drives retention/
revenue
Unique Value
Proposition
Single, clear,
compelling
message that
states why you
are different and
worth buying
Unique Value
Proposition
Single, clear,
compelling
message that
states why you
are different and
worth buying
Channels
Path to
customers
Customer
Segments
Target customers
Cost Structure
Customer Acquisition Costs
Distribution Costs
Hosting
People, etc.
Cost Structure
Customer Acquisition Costs
Distribution Costs
Hosting
People, etc.
Cost Structure
Customer Acquisition Costs
Distribution Costs
Hosting
People, etc.
Revenue Streams
Revenue Model
Life Time Value
Revenue
Gross Margin
Revenue Streams
Revenue Model
Life Time Value
Revenue
Gross Margin
Revenue Streams
Revenue Model
Life Time Value
Revenue
Gross Margin
Thursday, November 4, 2010
Optimize for Scale
How do I accelerate growth?
Problem/Solution
Fit
Product/Market
Fit
Scale
Thursday, November 4, 2010
Problem
Top 3 problems
Solution
Top 3 features
Unique Value
Proposition
Single, clear,
compelling
message that
states why you
are different and
worth buying
Unique Value
Proposition
Single, clear,
compelling
message that
states why you
are different and
worth buying
Unfair
Advantage
Can’t be easily
copied or bought
Customer
Segments
Target customers
Problem
Top 3 problems
Key Activity
Activity that drives
retention/revenue
Unique Value
Proposition
Single, clear,
compelling
message that
states why you
are different and
worth buying
Unique Value
Proposition
Single, clear,
compelling
message that
states why you
are different and
worth buying Channels
Path to
customers
Customer
Segments
Target customers
Cost Structure
Customer Acquisition Costs
Distribution Costs
Hosting
People, etc.
Cost Structure
Customer Acquisition Costs
Distribution Costs
Hosting
People, etc.
Cost Structure
Customer Acquisition Costs
Distribution Costs
Hosting
People, etc.
Revenue Streams
Revenue Model
Life Time Value
Revenue
Gross Margin
Revenue Streams
Revenue Model
Life Time Value
Revenue
Gross Margin
Revenue Streams
Revenue Model
Life Time Value
Revenue
Gross Margin
Thursday, November 4, 2010
Before Product/Market Fit
Validated Learning
Pivots
Problem/Solution
Fit
Product/Market
Fit
Scale
Thursday, November 4, 2010
After Product/Market Fit
Growth
Optimizations
Validated Learning
Pivots
Problem/Solution
Fit
Product/Market
Fit
Scale
Thursday, November 4, 2010
Agenda
1. What is Running Lean?
2. What does a Lean Startup look like?
3. How can you use Lean to dene and measure progress?
Thursday, November 4, 2010
Not just limited to code
Thursday, November 4, 2010
Speed, Learning, Focus.
Thursday, November 4, 2010
How to build a validated learning loop
1. Formulate falsiable hypotheses
2. Time-box experiments
3. Validate Qualitatively, Verify Quantitatively
4. Create accessible dashboards
5. Communicate learning early and often
Thursday, November 4, 2010
How to build a validated learning loop
1. Formulate falsiable hypotheses
2. Time-box experiments
3. Validate Qualitatively, Verify Quantitatively
4. Create accessible dashboards
5. Communicate learning early and often
Thursday, November 4, 2010
Problem
Top 3 problems
Solution
Top 3 features
Unique Value
Proposition
Single, clear,
compelling
message that
states why you
are different and
worth buying
Unique Value
Proposition
Single, clear,
compelling
message that
states why you
are different and
worth buying
Unfair
Advantage
Can’t be easily
copied or bought
Customer
Segments
Target customers
Problem
Top 3 problems
Key Activity
Activity that drives
retention/revenue
Unique Value
Proposition
Single, clear,
compelling
message that
states why you
are different and
worth buying
Unique Value
Proposition
Single, clear,
compelling
message that
states why you
are different and
worth buying Channels
Path to
customers
Customer
Segments
Target customers
Cost Structure
Customer Acquisition Costs
Distribution Costs
Hosting
People, etc.
Cost Structure
Customer Acquisition Costs
Distribution Costs
Hosting
People, etc.
Cost Structure
Customer Acquisition Costs
Distribution Costs
Hosting
People, etc.
Revenue Streams
Revenue Model
Life Time Value
Revenue
Gross Margin
Revenue Streams
Revenue Model
Life Time Value
Revenue
Gross Margin
Revenue Streams
Revenue Model
Life Time Value
Revenue
Gross Margin
Thursday, November 4, 2010
Leap of Faith: Being known as an “expert” will drive early adopters
Hypothesis: Blog post will drive >100 early sign-ups
Thursday, November 4, 2010
How to build a validated learning loop
1. Formulate falsiable hypotheses
2. Time-box experiments
3. Validate Qualitatively, Verify Quantitatively
4. Create accessible dashboards
5. Communicate learning early and often
Thursday, November 4, 2010
Time is more valuable than money.
Thursday, November 4, 2010
How to build a validated learning loop
1. Formulate falsiable hypotheses
2. Time-box experiments
3. Validate Qualitatively, Verify Quantitatively
4. Create accessible dashboards
5. Communicate learning early and often
Thursday, November 4, 2010
Qualitative Quantitative
Start here Verify with data
Thursday, November 4, 2010
Thursday, November 4, 2010
Words matter
Images matter
Thursday, November 4, 2010
How to build a validated learning loop
1. Formulate falsiable hypotheses
2. Time-box experiments
3. Validate Qualitatively, Verify Quantitatively
4. Create accessible dashboards
5. Communicate learning early and often
Thursday, November 4, 2010
Thursday, November 4, 2010
Thursday, November 4, 2010
How to build a validated learning loop
1. Formulate falsiable hypotheses
2. Time-box experiments
3. Validate Qualitatively, Verify Quantitatively
4. Create accessible dashboards
5. Communicate learning early and often
Thursday, November 4, 2010
We thought (Hypotheses):
Our Customers told us (Insights):
Next Steps (Future Experiments):
0
12.5
25
37.5
50
Jan Feb Mar Apr May June July
$20K
$15K
$10K
$5K
$0
• Personal Authority would be a viable
channel to early adopters
• Customers would vote the problem as
“must-have”
• Customers would pay $49/mo
• Most early adopters did come through
blog and twitter
• Customers voted #3 problem as “must-
have”. Others as nice-to-have
• $49/mo works for customers with early
traction
•Test MVP based on “must-have” problem
•Test a “Free” model
Results from last iteration
Thursday, November 4, 2010
Not a better Plan A.
But a path to a plan that works.
Thursday, November 4, 2010
Thanks!
Ash Maurya
twitter: ashmaurya
blog: http://www.ashmaurya.com
Running Lean - the book
Systematically iterate your product
from plan A to a plan that works
http://www.RunningLeanHQ.com
Thursday, November 4, 2010

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Running Lean - Dallas

  • 1. RUNNING LEAN A systematic process for iterating your web application from Plan A to a plan that works ASH MAURYA @ashmaurya http://www.ashmaurya.com Thursday, November 4, 2010
  • 2. The sad statistics of Plan A. Thursday, November 4, 2010
  • 4. 66% drastically change their original plans Thursday, November 4, 2010
  • 5. Not a better Plan A. But a path to a plan that works. Thursday, November 4, 2010
  • 6. Running Lean is a systematic process for iterating from Plan A to a plan that works. Thursday, November 4, 2010
  • 7. Agenda 1. What is Running Lean? 2. What does a Lean Startup look like? 3. How can you use Lean to dene and measure progress? Thursday, November 4, 2010
  • 8. Agenda 1. What is Running Lean? 2. What does a Lean Startup look like? 3. How can you use Lean to dene and measure progress? Thursday, November 4, 2010
  • 11. What is Running Lean Customer Development + Lean Startup + Bootstrapping Thursday, November 4, 2010
  • 12. Requirements ReleaseDevelopment QA Customer Development Thursday, November 4, 2010
  • 13. Requirements ReleaseDevelopment QA Some learning Customer Development Thursday, November 4, 2010
  • 14. Requirements ReleaseDevelopment QA Some learning Most learning happens here Customer Development Thursday, November 4, 2010
  • 15. Requirements ReleaseDevelopment QA Some learning Very little learning Most learning happens here Customer Development Thursday, November 4, 2010
  • 16. A synthesis of Customer Development, Agile, and Lean Thinking. Lean Startup Thursday, November 4, 2010
  • 17. Funding with customer revenue. Bootstrapping Thursday, November 4, 2010
  • 18. Startups that succeed are those that manage to iterate enough times before running out of resources. - Eric Ries Speed Thursday, November 4, 2010
  • 19. Get out of the building. - Steve Blank Learning Thursday, November 4, 2010
  • 20. Right Action, Right Time. - Bijoy Goswami Focus Thursday, November 4, 2010
  • 22. There are no silver bullets Thursday, November 4, 2010
  • 23. Agenda 1. What is Running Lean? 2. What does a Lean Startup look like? 3. How can you use Lean to dene and measure progress? Thursday, November 4, 2010
  • 24. 1. Document your Plan A 2. Systematically Test your Plan A Thursday, November 4, 2010
  • 25. There is an “I” in Vision Smart people can rationalize anything. Thursday, November 4, 2010
  • 26. Business Model vs Business Plan Thursday, November 4, 2010
  • 27. Business Model vs Business Plan A document investors make you write that they don’t read Thursday, November 4, 2010
  • 28. Business Model vs Business Plan A single diagram of your business Thursday, November 4, 2010
  • 29. Problem Top 3 problems Solution Top 3 features Unique Value Proposition Single, clear, compelling message that states why you are different and worth buying Unique Value Proposition Single, clear, compelling message that states why you are different and worth buying Unfair Advantage Can’t be easily copied or bought Customer Segments Target customers Problem Top 3 problems Key Activity Activity that drives retention/revenue Unique Value Proposition Single, clear, compelling message that states why you are different and worth buying Unique Value Proposition Single, clear, compelling message that states why you are different and worth buying Channels Path to customers Customer Segments Target customers Cost Structure Customer Acquisition Costs Distribution Costs Hosting People, etc. Cost Structure Customer Acquisition Costs Distribution Costs Hosting People, etc. Cost Structure Customer Acquisition Costs Distribution Costs Hosting People, etc. Revenue Streams Revenue Model Life Time Value Revenue Gross Margin Revenue Streams Revenue Model Life Time Value Revenue Gross Margin Revenue Streams Revenue Model Life Time Value Revenue Gross Margin Thursday, November 4, 2010
  • 30. The 3 Stages of a Startup Problem/Solution Fit Product/Market Fit Scale Thursday, November 4, 2010
  • 31. Validate Problem/Solution Fit Problem/Solution Fit Product/Market Fit Scale Do I have a problem worth solving? Thursday, November 4, 2010
  • 32. Problem Top 3 problems Solution Top 3 features Unique Value Proposition Single, clear, compelling message that states why you are different and worth buying Unique Value Proposition Single, clear, compelling message that states why you are different and worth buying Unfair Advantage Can’t be easily copied or bought Customer Segments Target customers Problem Top 3 problems Key Activity Activity that drives retention/revenue Unique Value Proposition Single, clear, compelling message that states why you are different and worth buying Unique Value Proposition Single, clear, compelling message that states why you are different and worth buying Channels Path to customers Customer Segments Target customers Cost Structure Customer Acquisition Costs Distribution Costs Hosting People, etc. Cost Structure Customer Acquisition Costs Distribution Costs Hosting People, etc. Cost Structure Customer Acquisition Costs Distribution Costs Hosting People, etc. Revenue Streams Revenue Model Life Time Value Revenue Gross Margin Revenue Streams Revenue Model Life Time Value Revenue Gross Margin Revenue Streams Revenue Model Life Time Value Revenue Gross Margin Thursday, November 4, 2010
  • 33. Achieve Product/Market Fit Have I built something people want? Problem/Solution Fit Product/Market Fit Scale Thursday, November 4, 2010
  • 34. Requirements ReleaseDevelopment QA Some learning Very little learning Most learning happens here Thursday, November 4, 2010
  • 36. Problem Top 3 problems Solution Top 3 features Unique Value Proposition Single, clear, compelling message that states why you are different and worth buying Unique Value Proposition Single, clear, compelling message that states why you are different and worth buying Unfair Advantage Can’t be easily copied or bought Customer Segments Target customers Problem Top 3 problems Key Activity Activity that drives retention/ revenue Unique Value Proposition Single, clear, compelling message that states why you are different and worth buying Unique Value Proposition Single, clear, compelling message that states why you are different and worth buying Channels Path to customers Customer Segments Target customers Cost Structure Customer Acquisition Costs Distribution Costs Hosting People, etc. Cost Structure Customer Acquisition Costs Distribution Costs Hosting People, etc. Cost Structure Customer Acquisition Costs Distribution Costs Hosting People, etc. Revenue Streams Revenue Model Life Time Value Revenue Gross Margin Revenue Streams Revenue Model Life Time Value Revenue Gross Margin Revenue Streams Revenue Model Life Time Value Revenue Gross Margin Thursday, November 4, 2010
  • 37. Optimize for Scale How do I accelerate growth? Problem/Solution Fit Product/Market Fit Scale Thursday, November 4, 2010
  • 38. Problem Top 3 problems Solution Top 3 features Unique Value Proposition Single, clear, compelling message that states why you are different and worth buying Unique Value Proposition Single, clear, compelling message that states why you are different and worth buying Unfair Advantage Can’t be easily copied or bought Customer Segments Target customers Problem Top 3 problems Key Activity Activity that drives retention/revenue Unique Value Proposition Single, clear, compelling message that states why you are different and worth buying Unique Value Proposition Single, clear, compelling message that states why you are different and worth buying Channels Path to customers Customer Segments Target customers Cost Structure Customer Acquisition Costs Distribution Costs Hosting People, etc. Cost Structure Customer Acquisition Costs Distribution Costs Hosting People, etc. Cost Structure Customer Acquisition Costs Distribution Costs Hosting People, etc. Revenue Streams Revenue Model Life Time Value Revenue Gross Margin Revenue Streams Revenue Model Life Time Value Revenue Gross Margin Revenue Streams Revenue Model Life Time Value Revenue Gross Margin Thursday, November 4, 2010
  • 39. Before Product/Market Fit Validated Learning Pivots Problem/Solution Fit Product/Market Fit Scale Thursday, November 4, 2010
  • 40. After Product/Market Fit Growth Optimizations Validated Learning Pivots Problem/Solution Fit Product/Market Fit Scale Thursday, November 4, 2010
  • 41. Agenda 1. What is Running Lean? 2. What does a Lean Startup look like? 3. How can you use Lean to dene and measure progress? Thursday, November 4, 2010
  • 42. Not just limited to code Thursday, November 4, 2010
  • 44. How to build a validated learning loop 1. Formulate falsiable hypotheses 2. Time-box experiments 3. Validate Qualitatively, Verify Quantitatively 4. Create accessible dashboards 5. Communicate learning early and often Thursday, November 4, 2010
  • 45. How to build a validated learning loop 1. Formulate falsiable hypotheses 2. Time-box experiments 3. Validate Qualitatively, Verify Quantitatively 4. Create accessible dashboards 5. Communicate learning early and often Thursday, November 4, 2010
  • 46. Problem Top 3 problems Solution Top 3 features Unique Value Proposition Single, clear, compelling message that states why you are different and worth buying Unique Value Proposition Single, clear, compelling message that states why you are different and worth buying Unfair Advantage Can’t be easily copied or bought Customer Segments Target customers Problem Top 3 problems Key Activity Activity that drives retention/revenue Unique Value Proposition Single, clear, compelling message that states why you are different and worth buying Unique Value Proposition Single, clear, compelling message that states why you are different and worth buying Channels Path to customers Customer Segments Target customers Cost Structure Customer Acquisition Costs Distribution Costs Hosting People, etc. Cost Structure Customer Acquisition Costs Distribution Costs Hosting People, etc. Cost Structure Customer Acquisition Costs Distribution Costs Hosting People, etc. Revenue Streams Revenue Model Life Time Value Revenue Gross Margin Revenue Streams Revenue Model Life Time Value Revenue Gross Margin Revenue Streams Revenue Model Life Time Value Revenue Gross Margin Thursday, November 4, 2010
  • 47. Leap of Faith: Being known as an “expert” will drive early adopters Hypothesis: Blog post will drive >100 early sign-ups Thursday, November 4, 2010
  • 48. How to build a validated learning loop 1. Formulate falsiable hypotheses 2. Time-box experiments 3. Validate Qualitatively, Verify Quantitatively 4. Create accessible dashboards 5. Communicate learning early and often Thursday, November 4, 2010
  • 49. Time is more valuable than money. Thursday, November 4, 2010
  • 50. How to build a validated learning loop 1. Formulate falsiable hypotheses 2. Time-box experiments 3. Validate Qualitatively, Verify Quantitatively 4. Create accessible dashboards 5. Communicate learning early and often Thursday, November 4, 2010
  • 51. Qualitative Quantitative Start here Verify with data Thursday, November 4, 2010
  • 54. How to build a validated learning loop 1. Formulate falsiable hypotheses 2. Time-box experiments 3. Validate Qualitatively, Verify Quantitatively 4. Create accessible dashboards 5. Communicate learning early and often Thursday, November 4, 2010
  • 57. How to build a validated learning loop 1. Formulate falsiable hypotheses 2. Time-box experiments 3. Validate Qualitatively, Verify Quantitatively 4. Create accessible dashboards 5. Communicate learning early and often Thursday, November 4, 2010
  • 58. We thought (Hypotheses): Our Customers told us (Insights): Next Steps (Future Experiments): 0 12.5 25 37.5 50 Jan Feb Mar Apr May June July $20K $15K $10K $5K $0 • Personal Authority would be a viable channel to early adopters • Customers would vote the problem as “must-have” • Customers would pay $49/mo • Most early adopters did come through blog and twitter • Customers voted #3 problem as “must- have”. Others as nice-to-have • $49/mo works for customers with early traction •Test MVP based on “must-have” problem •Test a “Free” model Results from last iteration Thursday, November 4, 2010
  • 59. Not a better Plan A. But a path to a plan that works. Thursday, November 4, 2010
  • 60. Thanks! Ash Maurya twitter: ashmaurya blog: http://www.ashmaurya.com Running Lean - the book Systematically iterate your product from plan A to a plan that works http://www.RunningLeanHQ.com Thursday, November 4, 2010