One out of ten startups is successful. The Lean Innovation approach improves the success rate of Startups. Entrepreneurs and Investors learn earlier what works and what does not and hence can act faster. Lean Innovation starts to unfold its potential from the early stage of a Startup even long before it has a sellable product. However, just using the tools does not result in increased effectiveness. Lean Innovation requires a fundamental mindset change of Entrepreneurs and Investors: Away from unproven assumptions to facts through creative experiments. In this training we show the essentials of the lean innovation framework and which aspects and metrics you the investor should request from the Entrepreneurs to make sure the Startup measures real progress daily and continuously adapts the path forward based on their latest learning to generate more value in shorter time. As an introduction we recommend to read the Harvard Business Review article ”Why the Lean Start-up Changes Everything”.

1. Fredi
Schmidli,
Norbert
Zeller
&
Joël
Perrenoud
Zürich,
17.
März
2015
Lean Innovation
How to increase the Success Rate of
Startups
Introduction for
1
17.3.15
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2. Fredi Schmidli
• Economist
and
BA
• Management
Teams
in
various
funcFons
• Entrepreneur
• Business
Angel
and
Boardmember:
www.startangels.ch
• Partner
at
pragmaFc
soluFons
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2

3. Norbert Zeller
• EE
FH,
MoM
MZSG
• Management
Teams
in
various
funcFons
• Partner
at
Trivadis
AG
• StartAngels
member
• Board
member
• Entrepreneur
• Agile
execuFve
coach
at
pragmaFc
soluFons
• Chairman
Diviac
3
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4. 4
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Joel
Perrenoud*
Harvard
MBA,
global
leadership
experience
(EMEA
President
Korn/Ferry),
McKinsey
(San
Francisco),
Compaq…
Roman
Osipenko
MSc,
Computer
science,
Kiev
Polytechnic,
System
Administrator,
front-­‐end
and
back-­‐
end
web
development…
Thomas
Achhorner*
MSc,
Computer
Science
ETH,
Partner
at
BCG
(Sydney,
Beijing,
Zurich),
IBM…
Team
Investors
/
advisors
Paul
Sevinç
ChrisFan
Wanner
Gregory
Gerhardt
Tobias
Asch
Internet
Entrepreneurs
Business
Angels
Norbert
Zeller*
Philipp
Cocer*
Others
*Board
members

5. What are your goals /
expectations?
• Team
up
by
2
• Discuss
what
you
expect
from
the
training
• Write
down
1
goal
per
person
on
a
Post-­‐it:
5‘
• All
• Present
goals:
5‘
10
Minutes
5
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6. agility
accelerates
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AGENDA
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7. agility
accelerates
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OVERVIEW
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8. Goal: To improve the success rate
Source:
Ash
Maurya
«Running
Lean»
8
• 66%
of
successful
products/companies
significantly
change
original
business
idea
• Develop
product
in
half
the
Fme
and
at
half
the
cost
(GE)
• Reduce
failure:
“wrong”
product
and
“premature”
scaling
• Success
comes
not
from
beper
idea,
but
from
a
framework,
which
iterates
your
original
ideas
to
a
product,
which
customers
will
buy.
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9. Traditional versus lean approach
Source:
Ash
Maurya:
Running
Lean
9
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10. Core Lean Principle
Get out of
the building
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11. From Lean Mfr. to Lean Innovation
Lean
EcoSystem
Classic
Lean
Management
Invented
by
Toyota
arer
WW2
Maximize
efficiency
under
“stable”
condiFons
Not
strongest
in
innovaFon
space
Focus
on
conFnuous
improvement
and
execuFon
excellence
Lean
Startup
Blank
/Ries
/Osterwalder
5
years
old
Maximize
innovaFon
efficiency
under
extreme
uncertainty
Agile
development
(not
waterfall)
customer
development
(not
market
research)
It
took
50+
years
unFl
agile
SW
development
methods
finally
started
to
successfully
combine
innovaFon
with
lean
management
principles
11
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12. Lean Innovation is …
12
a
company
culture
touching
all
aspects:
Values,
Leadership,
IncenFves,
Empowerment,
OrganizaFon,
Accountability,
…
not
a
collecFon
of
tools
A
culture
can
not
be
copied
easily
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13. Lean Innovation Framework
13
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14. Lean Innovation Framework
Scale
Product
Market
fit
Problem
SoluFon
fit
Customer
Discovery
Customer
ValidaFon
Customer
CreaFon
14
Each
hypothesis
is
validated
via
an
experiment
with
BML
feedback
loop
Is
problem
worth
solving,
are
people
willing
to
pay,
is
business
model
profitable,
repeatable
and
scalable
Hypotheses
of
plan
A,
…
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15. agility
accelerates
...
BUSINESS MODEL
GENERATION
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16. Lean Canvas (by Ash Maurya / adapted from Osterwalder)
16
guess
guess
guess
guess
guess
guess
guess
guess
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17. Lean Canvas Example
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18. Lean Canvas (by Ash Maurya / adapted from Osterwalder)
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19. Early Adopters
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2.5%
13.5%
34%
34%
16%

20. Persona Development
understand
the “why’s”
by looking at
the
customers
behaviors
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Facts
Factual
informaFon
about
your
target
customer
Pain
State
the
problem
you
believe
your
target
customers
have,
that
your
soluFons
solves
Behavior
ExisFng
behavior
they
exhibit
now,
because
they
don’t
have
your
soluFon
Goals
What
goals
are
they
trying
to
accomplish
with
their
behavior,
that
your
soluFon
will
do
beper

21. Lean Canvas (by Ash Maurya / adapted from Osterwalder)
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22. • Welcome:
Set
the
scene
(2min)
• Interviewees
demographics-­‐target
customer?
(2min)
• Describe
problem
(your
hypothesis)
(2min)
• Rank
top
three
problems/must
have’s
(4min)
• Listen
to
their
world
view
(15min)
• Wrap
up.
Sum
up
feedback
to
confirm
understanding
(2min)
• Get
permission
to
follow
up.
Get
referrals
(2min)
Problem Interview
Ash
Maurya
• Document
results
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Goal:
Have
I
idenIfied
a
problem
worth
solving?

23. Lean Canvas (by Ash Maurya / adapted from Osterwalder)
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24. Lean Canvas (by Ash Maurya / adapted from Osterwalder)
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25. Solution Interview
Ash
Maurya
• Tell
a
story
-­‐
frame
the
product
(2min)
• Show
Demo/Pretotype/MVP
(15min)
• Wrap
up.
Sum
up
feedback
to
confirm
understanding
(2min)
• Get
permission
to
follow
up.
Get
referrals
(2min)
• Document
results
• Welcome:
Set
the
scene
(2min)
• Collect
demographics
–
right
customer
segment?
(2min)
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• Test
the
pricing
(15min)
Goal:
Have
I
built
sth.
people
want
at
the
price
they
will
pay?

26. Intermediate Health Check
26
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27. agility
accelerates
...
BREAK
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28. agility
accelerates
...
BUILD – MEASURE - LEARN
FEEDBACK LOOP
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29. Feedback loop
Design
experiment
Proposal,
Pretotype,
Landing
page,
MVP
…
Results
Analyze
results:
persevere,
pivot
or
quit?
weeks
not
years
AssumpFon/
Hypothesis
Run
experiment
CreaFvity
happens
here
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Source:
Eric
Ries:
The
Lean
Startup

30. BUILD: Design Experiment
We
will
know
we
have
succeeded
when
[quanFtaFve/measurable
outcome]
or
[qualitaFve/observable
outcome]
Janice
Fraser
We
believe
that
[customer
type]
have
a
need
for
[need/acFon/behavior]
The
smallest
thing
we
can
do
to
prove
that
need
is
[experiment]
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31. 31
BUILD: Client Loyalty Metrics
1.
How
likely
is
it
that
you
would
recommend
this
AngelDay
introducFon
to
a
friend
or
colleague?
17.3.15
www.pragmaFc-­‐soluFons.ch
Source:
NetPromoter
Score
2.
What
changes
would
we
have
to
make
for
you
to
give
us
one
point
more?
……………………………………………………………………………………………………………

32. 32
BUILD: Your metrics for diviac?
17.3.15
Every
one
on
its
own
:
Write
three
post-­‐it
notes
with
the
three
most
important
metrics
at
diviac
and
discuss
them
with
your
neighbor.
5
Minutes
www.pragmaFc-­‐soluFons.ch

33. Product: From Proposal to MVP
4)
Early
version
with
minimal
feature
set
that
can
be
sold
to
early
adopters
1)
Proposal:
a
document
describing
the
soluFon
3)
Fake
demo
of
any
kind
2)
Smoke
Test:
Landing
Page
to
test
interest
MVPPretotype
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34. P: Pretotype Example (Pinocchio)
Simulate
living
room
ambience
effect
of
flat
Screen
TV
(compared
to
CRT)
Around
2002
From
Tom
Kelly
„the
ten
faces
of
innovaFon“
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35. P: Pretotype Example (Explainer Video)
Test
vision
of
cloud
service
offering
-­‐
Dropbox
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hpps://www.youtube.com/watch?v=7QmCUDHpNzE

36. Learn: Innovation Accounting Report
Why
is
it
relevant?
QuanFfy
your
goals
set
scope/Fmebox
Plan
how
to
execute
experiment
Results
=
Data
Document
the
learning
(validated,
invalidated
or
inconclusive)
Test
value
and
growth
hypothesis
first
Move
to
next
experiment
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37. LEARN: Persevere
I am convinced that half of what
separates the successful
entrepreneurs from the non-
successful ones is pure
perseverance17.3.15
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38. LEARN: … or pivot
Pivot: A change in strategy
without a change in vision
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39. LEARN: ... or quit?
• CommunaliFes
of
• Reto
von
Arx
• Marco
Streller
• Dominique
Gisin
• Right
Fme
to
quit?
• Learnings
from
behavioral
finance?
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40. agility
accelerates
...
CUSTOMER DEVELOPMENT
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41. Goal: Problem Solution Fit => Value
Problem
SoluIon
Fit
You
validated
with
MVP
and
prospects
that
a
specific
soluFon
will
solve
a
know
problem
to
such
a
degree
that
customer
will
buy
it.
Brant
Cooper
Value
assumpIon
–
test
whether
a
product
or
service
really
delivers
value
to
specific
customers
once
using
it.
Scale
Product
Market
fit
Problem
SoluFon
fit
Customer
Discovery
Customer
ValidaFon
Customer
CreaFon
Is
the
idenFfied
problem
real?
Will
the
target
customer
pay?
Can
the
problem
be
solved?
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42. The
growth
assumpIon
–
test
how
new
customers
will
discover
a
product
or
service.
Through
what
engine
will
you
acquire
new
customers
at
affordable
cost.
Goal: Product Market Fit => Growth
Product
Market
Fit
Customer
is
willing
to
pay.
Cost
of
acquiring
new
customers
is
smaller
than
profit.
Evidence
that
market
is
large
enough
Brant
Cooper
Scale
Product
Market
fit
Problem
SoluFon
fit
Customer
Discovery
Customer
ValidaFon
Customer
CreaFon
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43. agility
accelerates
...
LEAN REPORTING AND
GOVERNANCE
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44. Lean Dash Board (Lean Stack)
Flow
44

45. Lean Dash Board: Example
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Customer
Example:
Insurance
Company

46. Lean Innovation Investment Process
Source:
Hans
Däpp,
StartAngels
Network
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46
AssumpIon/Goal:
Halving
&
Slicing
of
Angel
Investments
FFFF
Business
Canvas
V12,
Problem
SoluFon
fit
&
Product
Market
fit
&
Dash
Board
Results
&
Bus.Canv.
V
X
t
Milestone
1
Lean
Investment
when?
Investment
today
Business
Plan
V
1.0
Effort
Manpower
(%)
1
10
80
Elapsed
Fme
(month)
1
-­‐
3
2
-­‐
3
18
-­‐…
Public
BP
course
machine
sFll
running
No/few
public
Lean
InnovaFon
Trainings
available
Lean
InnovaFon
Training
is
part
of
BA
investment
(=
risk
insurance)
Goal:
On
porƒolio
basis
to
Get
higher
Success
Rate
&
less
get
funds
&
more
quits

47. agility
accelerates
...
DISCUSSION
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48. agility
accelerates
...
EXPECTATION CHECK
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49. 49
Feedback Door
1.
How
likely
is
it
that
you
would
recommend
this
AngelDay
introducFon
to
a
friend
or
colleague?
17.3.15
www.pragmaFc-­‐soluFons.ch
Source:
NetPromoter
Score
2.
What
changes
would
we
have
to
make
for
you
to
give
us
one
point
more?
……………………………………………………………………………………………………………

50. Infos, Coordinates, next Trainings
• hpps://leanstack.com/LeanCanvas.pdf
• fredi@pragmaFc-­‐soluFons.ch
• Norbert.zeller@comzell.ch
• joel@diviac.com
• Nächste
Lean
InnovaFon
Trainings
in
Zürich:
• 25./26.
März,
2015
• 19./20.
Mai,
2015
hpp://pragmaFc-­‐soluFons.ch/training.php?KP=20&TITLE=Lean%20InnovaFon%20Training
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51. agility
accelerates
...
THE END
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