Review of highlights from Lean Startup

1. Lean Startup
Eric Ries
2011
3/7/2015 1© Sachidananda

2. About the Authors
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Eric Ries
•A Silicon Valley Entrepreneur
•Pioneer of the Lean Startup Movement
•Born: 1978
•Graduate in Computer Science from Yale University
•First Book: “Black Art of Java Game Programming” while
still a high schooler!
@ Yale:
•Co-founder of Catalyst Recruiting
•On advisory board of two startup incubators and a
venture fund in New Haven, Connecticut.
Post Yale:
•Worked with a start up which failed until 2003 –
There.com
•2004 – started IMVU Inc
•Influenced by Steve Black – “Customer Development”
•Joined venture capital firm Kleiner Perkins as a venture
advisor & then began independently advising new
ventures
Building on his experienced of both success and failure with high-tech
startups, he began to develop a methodology based on select management
principles to help startups succeed – based on the Japanese the Lean
Src: http://en.wikipedia.org/wiki/Eric_Ries

3. Author’s thesis
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Product
Strategy
Vision
Strategy: Employed by the start up to achieve its
vision & includes – business model, product road
map, partners, competitors, who is a customer
etc.
Change in Strategy is a Pivot
Product: Is the end result of the strategy
Change in Product is Optimization
Vision: The true north! The destination the start
up intends to reach
Entrepreneurs are committed to seeing what the
start up to its destination
Vision
A startup is a human institution
designed to create a new product
or service under conditions of
extreme uncertainty
5 Principles of Lean Startup Method
1. Entrepreneurs are everywhere
2. Entrepreneurship is management
3. Validated Learning
4. Build-Measure-Learn
5. Innovation Accounting

4. Author’s thesis
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Steer
• Startup is a catalyst that transforms ideas
into products
• As customers interact with the products
they generate feedback and data
•Feedback Loop - Build Measure Learn
1. Identify the hypothesis to test – leap of
faith assumptions
2. Build the MVP – version that enables a
full turn of the BML loop
3. Measure: Is the product development
effort leading to real progress –
1. Innovation Accounting
2. Learning Milestones
01 IDEA !
02 HYPOTHESIS
03 EXPERIMENTAL DESIGN
04 EXPERIMENTATION
05 PIVOT OR PERSEVERE?
6.b PERSEVERE
Experiment proves hypothesis
6.a PIVOT
Experiments
disprove
hypothesis
Pivot?

5. Author’s thesis
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Accelerate
Batch
The power of small
Batches
-Equivalent of the andon
card
- Continuous deployment
-Feedback on design
decisions almost
instantaneous
-Large batches could
initiate death spirals for
the organization!
- pull instead of push
(learn-measure-build)!
Growth
New customers come from
the action of past
customers.
Growth Through
- word of mouth
- aside effect of product
usage
- funded advertisement
- repeat purchase or use
3 engines of growth
1. Sticky engine
2. Viral
3. PaidAdapt
The 5 why approach
1. Be tolerant to all mistakes the first time
2. Never allow the same mistake to be made
twice
Innovate
Structure -
• Scarce but secure resources
• Independent development authority
• Personal stake in the outcome
• Innovation sandbox
• Internal teams accountable
Watch out -
• Protect from the parent organization
• Rational fears
• Hiding innovation inside the black
box
People
Culture
Process
Accountability
The
Startup
Way

6. Build-Measure-Learn Loop
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Idea
BUILD
Product
MEASURE
Data
LEARN
Minimize
TOTAL time
through the
loop
Build Faster
Unit Tests
Usability Tests
Continuous Integration
Incremental Deployment
Free & Open-Source
Cloud Computing
Cluster Immune System
Just-in-time Scalability
Refactoring
Developer Sandbox
Minimum Viable Product
Measure Faster
Funnel Analysis
Cohort Analysis
Net Promoter Score
Search Engine Marketing
Predictive Monitoring
Measure Faster
Split Tests
Continuous Deployment
Usability Tests
Real-time Monitoring & Alerting
Customer Liaison
Learn Faster
Split Tests
Customer Development
Five Whys
Customer Advisory Board
Falsifiable Hypotheses
Product Owner
Accountability
Customer Archetypes
Cross-functional Teams
Semi-autonomous Teams
Smoke Tests
Experiment is a cycle
around the validated
learning loop
Steer

7. A Catalog of Pivots
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Pivot is a special kind of change designed to test a new fundamental
hypothesis about the product, business model and engine of growth
Zoom-in
Pivot
Zoom-out
Pivot
Customer
Segment Pivot
Customer
Need Pivot
Platform
Pivot
Business
Architecture
Pivot
Value
Capture
Pivot
Engine of
Growth
Pivot
Channel
Pivot
Technology
Pivot

8. QUESTIONSTHANK YOU
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