Presentation held by Daniel Tenner on topic "Startup tools" at Startup Academy course in Belgrade. More details at startapakademija.com.

1. Startup tools!
Daniel Tenner
(@swombat)

2. Overview

3. 0. Starting thoughts

4. 1. Business Model
Canvas

5. 2. Coming up with
your idea

6. 3. Lean Startup, or
where to go from
here

7. 4. Recap and closing
thoughts

8. 0. Starting thoughts

9. • Entrepreneurship is a career

10. • Entrepreneurship is a career
• Startups are (risky) experiments

11. • Entrepreneurship is a career
• Startups are (risky) experiments
• You don’t have to experiment full-time

12. • Entrepreneurship is a career
• Startups are (risky) experiments
• You don’t have to experiment full-time
• Ideas are only a small part of it

13. • Entrepreneurship is a career
• Startups are (risky) experiments
• You don’t have to experiment full-time
• Ideas are only a small part of it
• Running your own business is great

14. • Entrepreneurship is a career
• Startups are (risky) experiments
• You don’t have to experiment full-time
• Ideas are only a small part of it
• Running your own business is great
• Start today with what you have

15. Disclaimer

16. Disclaimer
• No silver bullets
• No substitute for experience
• Just one tool
• Not the whole tool

17. Disclaimer
• No silver bullets
• No substitute for experience
• Just one tool
• Not the whole tool

18. Disclaimer
• No silver bullets
• No substitute for experience
• Just a couple of tools
• Not the whole tool

19. Disclaimer
• No silver bullets
• No substitute for experience
• Just a couple of tools
• Not the whole tool

20. 1. Business Model
Canvas

21. “Send me your business
plan”

22. Problems with B-
plans
• Hard to see if complete
• Discourages collaboration
• Not for visual people
• Lengthy and tedious to prepare
• Lengthy to absorb
• Can hide issues under mountains of words
• Most people won’t read any of it!

23. Problems with B-
plans
• Hard to see if complete
• Discourages collaboration or change, static
• Not for visual people
• Lengthy and tedious to prepare
• Lengthy to absorb
• Can hide issues under mountains of words
• Most people won’t read any of it!

24. Problems with B-
plans
• Hard to see if complete
• Discourages collaboration or change, static
• Not for visual people
• Lengthy and tedious to prepare
• Lengthy to absorb
• Can hide issues under mountains of words
• Most people won’t read any of it!

25. Problems with B-
plans
• Hard to see if complete
• Discourages collaboration or change, static
• Not for visual people
• Lengthy and tedious to prepare or absorb
• Lengthy to absorb
• Can hide issues under mountains of words
• Most people won’t read any of it!

26. Problems with B-
plans
• Hard to see if complete
• Discourages collaboration or change, static
• Not for visual people
• Lengthy and tedious to prepare or absorb
• Can hide issues under mountains of words
• on’t read any of it!

27. Problems with B-
plans
• Hard to see if complete
• Discourages collaboration or change, static
• Not for visual people
• Lengthy and tedious to prepare or absorb
• Can hide issues under mountains of words
• Most people won’t read any of it!
• on’t read any of it!

28. Problems with B-
plans
• Hard to see if complete
• Discourages collaboration or change, static
• Not for visual people
• Lengthy and tedious to prepare or absorb
• Can hide issues under mountains of words
• Most people won’t read any of it!
• Present just one vision

29. But business plans
serve a purpose...

30. “Plans are
worthless, but planning
is everything.”
- A great many people
(incl. Dwight D. Eisenhower)

31. Business planning
has evolved

32. Better business
planning:
• Easy to see what’s missing
• Dynamic, open to suggestions and changes
• Visual
• Quick to prepare, change and grasp
• Issues come up to the surface
• People actually want to read it!
• Present multiple possibilities

33. Is that possible?

37. Hero Rats...

38. Hero Rats...
• Genetically modified super-rats with
brain chips.
• At the press of a button, the Hero Rat
will seek out nearby explosives (e.g. in
a land mine). Press another button and
the Hero Rat returns (if still alive...).

39. Hero Rats...
• Due to a revolutionary process called
“Rat Magic”, the rats are inexpensive to
breed and fit out with brain chips.

41. Hero Rat Exercise 1
• Come up with as many different
possible customer types as possible.
• Time: 4 minutes.

43. Hero Rat Exercise 2
• What makes Hero Rats valuable?
• Time: 4 minutes.

45. Hero Rat Exercise 3
• How can you sell Hero Rats?
• Time: 3 minutes.

47. Hero Rat Exercise 4
• You get the idea...
• Time: 3 minutes.

49. Hero Rat Exercise 5
• Sell the Hero Rats!
(so you can go to lunch!)
• Time: 3 minutes.

50. Let’s have some fun
with the rats...

51. There are many ways
to run Hero Rat Inc...

52. Free rats for all?

53. Hero Rat Exercise 6
• How can you give away the Hero Rats
for free?
• Time: 5 minutes.

54. Hero Rats for the
mass market

55. Hero Rat Exercise 7
• Can you sell Hero Rats as a consumer
product?
• Time: 5 minutes.

56. HRaaS?

57. Hero Rat Exercise 8
(last!)
• Can you make Hero Rats a subscription
service?
• Time: 5 minutes.

58. Recap

59. Business Plans in
2012
• Easy to see what’s missing
• Dynamic, open to suggestions and changes
• Visual
• Quick to prepare, change and grasp
• Issues come up to the surface
• People actually want to read it
• Present multiple possibilities!

61. Bon Appétit!

62. 2. Coming up with
your idea

63. 2. Coming up with
your ideas

64. Idea Reach

65. Constraints

66. 1. Start with you...

67. Expert entrepreneurs
start with what they
have and who they
are.
effectuation.org

68. Who do you care
about helping?

69. Exercise 1
• Using yellow post-its, pin down things
you really want to have on your
business model.
• Time: 3 minutes.
• Note: don’t put things you don’t care
about!

70. 2. Then, the not-you

71. What do you hate
doing?

72. What is ridiculously
hard for you?

73. Exercise 2
• Using red post-its, pin down things you
don’t want on your business model.
• Time: 3 minutes.
• Note: don’t put things you don’t care
about!

74. 3. Your assets

75. What
communities/markets
do you have access
to?

76. What resources do
you have access to
which others don’t?

77. Exercise 3
• Using green post-its, pin down assets
and resources.
• Time: 3 minutes.
• Note: put anything that could help.

78. Groups of 3-5!

79. Exercise 4
• Help each other: come up each with a
customer, resource and activity.
• Time: 6 minutes.
• Note: more options is better!

80. 4. Get some help!

81. Who else cares about
your customers?

83. Exercise 5
• Add other potential players around your
canvas (partners or customers).
• Time: 3 minutes.
• Note: more options is better!

84. Remember: your first
idea is always dumb.

86. Exercise 6
• Sketch out 3 alternative business
models that fit your constraints.
• Time: 3 minutes.
• Note: more options is better!

88. ...but what next?

89. 3. Lean Startup, or
where to go from
here

90. “Lean Startup”

91. What is a startup?

92. What is a startup?
• “The act or fact of starting something; a
setting in motion.”
• -Dictionary (useless)

93. What is a startup?
• “Startups are fresh, new companies
trying to do cool stuff.”
• -Instinctive (still mostly useless)

94. What is a startup?
• “A startup is an organization formed to
search for a repeatable and scalable
business model.”
• -Steve Blank

95. What is a startup?
• “A startup is a human institution
designed to deliver a new product or
service under conditions of extreme
uncertainty.”
• -Eric Ries

96. What is a startup?
• “...essentially a startup is a new
business designed for scale.”
“A startup is a small company that takes
on a hard technical problem.”
• -Paul Graham

97. What is a startup?
• “A startup is a business which has
ambitions and plans to grow by a large
factor over the next few years.”
• -Me!

98. Key points
• Uncertainty, search, difficulty
• Ambition, growth
• Methods, plans
• Business, money

99. How should I build a
startup?

100. Some typical
approaches that don’t
work

101. 1. First, write a
business plan...

102. 2. Raise lots of
money and then
figure it out

103. 3. Plan it, build it and
they will come

104. 4. Get lots of users
and figure the rest
out later

105. 5. Don’t spend
anything at all.

106. A better method...
“Lean”

107. Lean is not...
• Cheap
• Rigid
• Limited to simple ideas
• The magic key to success

108. Lean is...
• A method to organise the chaos
• Less waste
• Less risk
• More learning
• A common language

109. The fundamental
principle of “Lean”

110. • People don’t care about things they
don’t need/want
• Building things people don’t need is
waste
• Building large things that people don’t
need is large waste
• You have no idea what you’re doing
• You have no idea what to build

111. • People don’t care about things they
don’t need/want
• Building things people don’t need is
waste
• Building large things that people don’t
need is large waste
• You have no idea what you’re doing
• You have no idea what to build

112. • People don’t care about things they
don’t need/want
• Building things people don’t need is
waste
• Building large things that people don’t
need is large waste
• You have no idea what you’re doing
• You have no idea what to build

113. • People don’t care about things they
don’t need/want
• Building things people don’t need is
waste
• Building large things that people don’t
need is large waste
• You have no idea what you’re doing
• You have no idea what to build

114. • People don’t care about things they
don’t need/want
• Building things people don’t need is
waste
• Building large things that people don’t
need is large waste
• You have no idea what you’re doing
• You have no idea what to build

115. Sounds hard!

116. ➡Building things is probably a waste of
your time right now.

117. ➡Building things is probably a waste of
your time right now.

118. The “Lean” approach:
• Build the smallest, easiest, smartest
thing that teaches you what you need to
learn

119. ➡Building this thing is probably a waste
of your time right now.

120. ➡Building this thing is maybe a waste of
your time right now.

121. ➡Building this thing is maybe not a
waste of your time right now.

122. ➡Building this thing is probably not a
waste of your time right now.

123. The “Lean” approach:
• Build the smallest, easiest, smartest
thing that teaches you what you need
to learn

124. What do you need to
learn?

125. Do people want it?

126. Can I sell it?

127. Can I build it?

128. A startup plan
1. Do people want it?
2. Can I sell it?
3. Can I build it?

130. The “Lean” approach:
• Build the smallest, easiest, smartest
thing that teaches you what you need to
learn

131. Minimum Viable
Product

132. Minimum Viable
Product
• Landing page
• Paper prototype
• Presentation/pitch
• Anything that enables you to learn!

133. Minimum Viable
Product
• Landing page
• Paper prototype
• Presentation/pitch
• Anything that enables you to learn!

134. Minimum Viable
Product
• Landing page
• Paper prototype
• Presentation/pitch
• Anything that enables you to learn!

135. Minimum Viable
Product
• Landing page
• Paper prototype
• Presentation/pitch
• (Fake) demo video
• “Concierge MVP”
• Anything that enables you to learn!

136. Minimum Viable
Product
• Landing page
• Paper prototype
• Presentation/pitch
• (Fake) demo video
• “Concierge MVP”
• Anything that enables you to learn!

137. Minimum Viable
Product
• Landing page
• Paper prototype
• Presentation/pitch
• (Fake) demo video
• “Concierge MVP”
• Anything that enables you to learn!

138. MVP
• MVP is not a shitty version of the
product.
• MVP is driven by the questions you
need answered.

139. The Lean Cycle

141. Lean Toolkit

142. Metrics

147. Up and to the right...

148. Vanity metrics
• User signups
• Traffic
• Retention rate
• Any metric in a vacuum

149. Good metrics
• Mostly: A/B test results
• Cohort breakdowns
• Retention rates over time
• Activity stream
• Any metric that’s actionable

150. Actionable?
• Must be related to the key engines of
your business...

151. Engines:
value and growth

152. Engine of value
• How much value is your startup
delivering?
• Is it enough to be worth paying for?
• Do people perceive that and agree?

153. Engine of growth
• How does your startup acquire new
customers?
• Paid
• Viral
• Sticky

154. Engine of growth
• How does your startup acquire new
customers?
• Paid (CAC & LTV)
• Viral (Viral Coefficient)
• Sticky (Retention rate)

155. Actionable Metrics
• Actionable metrics are the ones which
can lead to a change which you know
will impact your key drivers.

156. “If you simply plan on seeing
what happens, you always
succeed... in seeing what
happens!”
- Eric Ries

157. “If you can’t fail, then you can’t
learn.”
- Eric Ries

158. “Innovation
Accounting”

159. Lean reporting
• If you only report usage/revenue, that’s
what you’ll be judged on
• Track validated learning instead

160. Pivots
(hot buzzword alert)

161. Experiment failed...
what now?
• Why did it fail? Which assumption was
wrong?
• Can the assumption be tweaked, or
does it need to be thrown out?
• How can we rework the business model
now we know that we know this?

162. Experiments
succeeded, but...
• If it’s not working well enough to build a
sustainable business, it’s not working,
period.
• (diminishing returns...)

163. How to know if it’s
working well enough?

164. Types of pivots

165. • Zoom-in pivot: single feature becomes
the whole product
• Zoom-out pivot: the product becomes
a feature of a larger product

166. • Customer segment pivot: some
customers like us, but not the ones
initially targeted
• Customer need pivot: the product
doesn’t solve a big enough problem for
our customers

167. • Business architecture pivot: low
margin, high volume, vs. high
margin, low volume
• Value capture pivot: change the way
you monetise

168. • But... don’t abuse pivots.

169. 4. Recap and closing
thoughts

170. Let’s recap...

171. EVERYTHING!

174. Startups are
experiments

175. Test critical things as
quickly as possible

177. Actionable metrics,
not vanity metrics

178. Report on learning
progress

179. Pivot when
assumptions are
wrong

180. What to do from here
• Be Smart
• Get Advice
• DO THINGS!

181. Where to go from
here...
• “The Lean Startup” - Eric Ries
• “Running Lean” - Ash Maurya
• “The entrepreneur’s guide to customer development”
- Brant Cooper & Patrick Vlaskovits
• Numerous blogs online...
• Mentors...
• EXPERIENCE!

182. Big Recap!

194. Thank you!
Daniel Tenner
(@swombat)
http://swombat.com