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Building a Virtual World: Lean Startup Style,[object Object],#leanstartup,[object Object],Eric Ries (@ericries),[object Object],http://StartupLessonsLearned.com,[object Object]
In Memoriam,[object Object]
Entrepreneurship = Awesome,[object Object],It is the best time in the history of the world to be an entrepreneur,[object Object],Costs are falling in all industries,[object Object],Barriers are being destroyed,[object Object],Disruption and chaos are everywhere,[object Object]
Why build a startup?,[object Object],Only entrepreneurship combines these three elements,[object Object],Change the world,[object Object],Build an organization of lasting value,[object Object],Make customers’ lives better,[object Object]
Most Startups Fail,[object Object]
Most Startups Fail,[object Object]
Most Startups Fail,[object Object]
Most Startups Fail,[object Object],But it doesn’t have to be that way. ,[object Object],We can do better. ,[object Object],This talk is about how.,[object Object]
What is a startup?,[object Object],A startup is a human institution designed to deliver a new product or service under conditions of extreme uncertainty. ,[object Object],Nothing to do with size of company, sector of the economy, or industry,[object Object]
Entrepreneurship is management,[object Object],Our goal is to create an institution, not just a product,[object Object],Traditional management practices fail,[object Object], “general management” as taught to MBAs,[object Object],Need practices and principles geared to the startup context of extreme uncertainty,[object Object],Not just for “two guys in a garage”,[object Object]
The Pivot,[object Object],What do successful startups have in common?,[object Object],They started out as digital cash for PDAs, but evolved into online payments for eBay. ,[object Object],They started building BASIC interpreters, but evolved into the world's largest operating systems monopoly. ,[object Object],They were shocked to discover their online games company was actually a photo-sharing site.,[object Object],Pivot: change directions but stay grounded in what we’ve learned. ,[object Object],http://startuplessonslearned.blogspot.com/2009/06/pivot-dont-jump-to-new-vision.html,[object Object]
Speed Wins,[object Object],if we can reduce the time between major iterations,[object Object],we can increase our odds of success,[object Object]
A Tale of Two Startups,[object Object]
Startup #1,[object Object]
Stealth Startup Circa 2001,[object Object]
All about the team,[object Object]
A good plan?,[object Object],Start a company with a compelling long-term vision. ,[object Object],Raise plenty of capital.,[object Object],Hire the absolute best and the brightest.,[object Object],Hire an experienced management team with tons of startup experience.,[object Object],Focus on quality. ,[object Object],Build a world-class technology platform.,[object Object],Build buzz in the press and blogosphere.,[object Object]
Achieving Failure,[object Object],Company failed ,[object Object],$40MM and five years of pain,[object Object],Crippled by “shadow beliefs” that destroyed the effort of all those smart people.,[object Object]
Shadow Belief #1,[object Object],We know what customers want. ,[object Object]
Shadow Belief #2,[object Object],We can accurately predict the future. ,[object Object]
Shadow Belief #3,[object Object],Advancing the plan is progress. ,[object Object]
A good plan?,[object Object],Start a company with a compelling long-term vision. ,[object Object],Raise plenty of capital.,[object Object],Hire the absolute best and the brightest.,[object Object],Hire an experienced management team with tons of startup experience.,[object Object],Focus on quality. ,[object Object],Build a world-class technology platform.,[object Object],Build buzz in the press and blogosphere.,[object Object]
Startup #2,[object Object]
IMVU,[object Object], ,[object Object]
IMVU,[object Object], ,[object Object]
New plan,[object Object],Shipped in six months – a horribly buggy beta product,[object Object],Charged from day one,[object Object],Shipped multiple times a day (by 2008, on average 50 times a day),[object Object],No PR, no launch,[object Object],Results 2009: profitable, revenue > $20MM,[object Object]
Making Progress,[object Object],In a lean transformation, question #1 is – which activities are value-creating and which are waste?,[object Object],In traditional business, value is created by delivering products or services to customers,[object Object],In a startup, the product and customer are unknowns,[object Object],We need a new definition of value for startups,[object Object]
Traditional Product Development,[object Object],Unit of Progress: Advance to Next Stage,[object Object],Waterfall,[object Object],Requirements,[object Object],Specification,[object Object],Design,[object Object],Problem: known,[object Object],Solution: known,[object Object],Implementation,[object Object],Verification,[object Object],Maintenance,[object Object]
Agile Product Development,[object Object],Unit of Progress: A line of Working Code,[object Object],“Product Owner” or in-house customer,[object Object],Problem: known,[object Object],Solution: unknown,[object Object]
Product Development at Lean Startup,[object Object],Unit of Progress: Validated Learning About Customers ($$$),[object Object],Customer Development,[object Object],Hypotheses,,[object Object],Experiments,,[object Object],Insights,[object Object],Problem: unknown,[object Object],Data,,[object Object],Feedback,,[object Object],Insights,[object Object],Solution: unknown,[object Object]
Minimize TOTAL time through the loop,[object Object],IDEAS,[object Object],LEARN,[object Object],BUILD,[object Object],DATA,[object Object],CODE,[object Object],MEASURE,[object Object]
How to build a Lean Startup,[object Object],Let’s talk about some specifics. ,[object Object],Minimum viable product,[object Object],Five why’s ,[object Object]
Minimum Viable Product,[object Object],IDEAS,[object Object],LEARN,[object Object],BUILD,[object Object],Learn Faster,[object Object],Customer Development,[object Object],Five Whys,[object Object],Build Faster,[object Object],Continuous Deployment,[object Object],Small Batches,[object Object],Minimum Viable Product,[object Object],Refactoring,[object Object],DATA,[object Object],CODE,[object Object],MEASURE,[object Object],Measure Faster,[object Object],Split Testing,[object Object],Actionable Metrics,[object Object],Net Promoter Score,[object Object],SEM ,[object Object]
Why do we build products?,[object Object],Delight customers,[object Object],Get lots of them signed up,[object Object],Make a lot of money,[object Object],Realize a big vision; change the world,[object Object],Learn to predict the future,[object Object]
Possible Approaches,[object Object],“Maximize chances of success”,[object Object],build a great product with enough features that increase the odds that customers will want it,[object Object],Problem: no feedback until the end, might be too late to adjust,[object Object], “Release early, release often”,[object Object],Get as much feedback as possible, as soon as possible,[object Object],Problem: run around in circles, chasing what customers think they want,[object Object]
Minimum Viable Product,[object Object],The minimum set of features needed to learn from earlyvangelists – visionary early adopters,[object Object],Avoid building products that nobody wants,[object Object],Maximize the learning per dollar spent,[object Object],Probably much more minimum than you think!,[object Object]
Minimum Viable Product,[object Object],Visionary customers can “fill in the gaps” on missing features, if the product solves a real problem,[object Object],Allows us to achieve a big vision in small increments without going in circles,[object Object],Requires a commitment to iteration,[object Object],MVP is only for BIG VISION products; unnecessary for minimal products.,[object Object]
Techniques,[object Object],Smoke testing with landing pages, AdWords,[object Object],SEM on five dollars a day,[object Object],In-product split testing,[object Object],Paper prototypes,[object Object],Customer discovery/validation,[object Object],Removing features (“cut and paste”),[object Object]
Fears,[object Object],False negative: “customers would have liked the full product, but the MVP sucks, so we abandoned the vision”,[object Object],Visionary complex: “but customers don’t know what they want!”,[object Object],Too busy to learn: “it would be faster to just build it right, all this measuring distracts from delighting customers”,[object Object]
Five Whys,[object Object],IDEAS,[object Object],Code Faster,[object Object],Learn Faster,[object Object],BUILD,[object Object],LEARN,[object Object],Continuous,[object Object],Deployment,[object Object],Five Whys Root,[object Object],Cause Analysis,[object Object],CODE,[object Object],DATA,[object Object],Measure Faster,[object Object],MEASURE,[object Object],Rapid Split Tests,[object Object]
Five Whys Root Cause Analysis,[object Object],[object Object]
Ask “why” five times when something unexpected happens.
Make proportional investments in prevention at all five levels of the hierarchy.
Behind every supposed technical problem is usually a human problem. Fix the cause, not just the symptom.,[object Object]
Get Started Today,[object Object],You are ready to do this, no matter ,[object Object],who you are,[object Object],what job you have,[object Object],what stage of company you’re in,[object Object],Get started now, today. ,[object Object]
Thanks!,[object Object],[object Object]
http://StartupLessonsLearned.com/
In print: http://bit.ly/SLLbookbeta
Getting in touch (#leanstartup)
http://twitter.com/ericries
eric@theleanstartup.com

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2010 03 09 the lean startup - gdc

Hinweis der Redaktion

  1. Hi, I’m Eric Ries. I wan to talk to you today about one simple fact: that the vast majority of high-tech startups fail. It does not have to be that way.Read the stories of successful startups and, if the founders are willing to be honest, you will see this pattern over and over again. They started out as digital cash for PDAs, but evolved into online payments for eBay. They started building BASIC interpreters, but evolved into the world's largest operating systems monopoly. They were shocked to discover their online games company was actually a photo-sharing site.Each of these companies were fortunate to have enough time, resources, and patience to endure the multiple iterations it took to find a successful product and market. The premise of the lean startup is simple: if we can reduce the time between these major iterations, we can increase the odds of success.
  2. Hi, I’m Eric Ries. I wan to talk to you today about one simple fact: that the vast majority of high-tech startups fail. It does not have to be that way.Read the stories of successful startups and, if the founders are willing to be honest, you will see this pattern over and over again. They started out as digital cash for PDAs, but evolved into online payments for eBay. They started building BASIC interpreters, but evolved into the world's largest operating systems monopoly. They were shocked to discover their online games company was actually a photo-sharing site.Each of these companies were fortunate to have enough time, resources, and patience to endure the multiple iterations it took to find a successful product and market. The premise of the lean startup is simple: if we can reduce the time between these major iterations, we can increase the odds of success.
  3. Hi, I’m Eric Ries. I wan to talk to you today about one simple fact: that the vast majority of high-tech startups fail. It does not have to be that way.Read the stories of successful startups and, if the founders are willing to be honest, you will see this pattern over and over again. They started out as digital cash for PDAs, but evolved into online payments for eBay. They started building BASIC interpreters, but evolved into the world's largest operating systems monopoly. They were shocked to discover their online games company was actually a photo-sharing site.Each of these companies were fortunate to have enough time, resources, and patience to endure the multiple iterations it took to find a successful product and market. The premise of the lean startup is simple: if we can reduce the time between these major iterations, we can increase the odds of success.
  4. Hi, I’m Eric Ries. I want to talk to you today about one simple fact: that the vast majority of high-tech startups fail. It does not have to be that way.Read the stories of successful startups and, if the founders are willing to be honest, you will see this pattern over and over again. They started out as digital cash for PDAs, but evolved into online payments for eBay. They started building BASIC interpreters, but evolved into the world's largest operating systems monopoly. They were shocked to discover their online games company was actually a photo-sharing site.Each of these companies were fortunate to have enough time, resources, and patience to endure the multiple iterations it took to find a successful product and market. The premise of the lean startup is simple: if we can reduce the time between these major iterations, we can increase the odds of success.
  5. The premise of the lean startup is simple: if we can reduce the time between these major iterations, we can increase the odds of success.
  6. Start a company with a compelling long-term vision. Don't get distracted by trying to flip it. Instead, try and build a company that will matter on the scale of the next century. Aim to become the "next AOL or Microsoft" not a niche player.Raise sufficient capital to have an extended runway from experienced smart money investors with deep pockets who are prepared to make follow-on investments.Hire the absolute best and the brightest, true experts in their fields, who in turn can hire the smartest people possible to staff their departments. Insist on the incredibly high-IQ employees and hold them to incredibly high standards.Bring in an expert CEO with outstanding business credentials and startup experience to focus on relentless execution.Build a truly mainstream product. Focus on quality. Ship it when it's done, not a moment before. Insist on high levels of usability, UI design, and polish. Conduct constant focus groups and usability tests.Build a world-class technology platform, with patent-pending algorithms and the ability to scale to millions of simultaneous users.Launch with a PR blitz, including mentions in major mainstream publications. Build the product in stealth mode to build buzz for the eventual launch.
  7. By hiring experts, conducting lots of focus groups, and executing to a detailed plan, the company became deluded that it knew what customers wanted. I remember vividly a scene at a board meeting, where the company was celebrating a major milestone. The whole company and board play-tested the product to see its new features first hand. Everyone had fun; the product worked. But that was two full years before any customers were allowed to use it. Nobody even asked the question: why not ship this now? It was considered naive that the "next AOL" would ship a product that wasn't ready for prime time. Stealth is a customer-free zone. All of the efforts to create buzz, keep competitors in the dark, and launch with a bang had the direct effect of starving the company for much-needed feedback.
  8. Even though some aspects of the product were eventually vindicated as good ones, the underlying architecture suffered from hard-to-change assumptions. After years of engineering effort, changing these assumptions was incredibly hard. Without conscious process design, product development teams turn lines of code written into momentum in a certain direction. Even a great architecture becomes inflexible. This is why agility is such a prized quality in product development.
  9. This is the most devastating thing about achieving a failure: while in the midst of it, you think you're making progress. This company had disciplined schedules, milestones, employee evaluations, and a culture of execution. When schedules were missed, people were held accountable. Unfortunately, there was no corresponding discipline of evaluating the quality of the plan itself. As the company built infrastructure and added features, the team celebrated these accomplishments. Departments were built and were even metrics-driven. But there was no feedback loop to help the company find the right metrics to focus on.
  10. Do our actions live up to our ideals?
  11. After our crushing failure, the founders of my next company decided to question every single assumption for how a startup should be built. Failure gave us the courage to try some radical things.
  12. After our crushing failure, the founders of my next company decided to question every single assumption for how a startup should be built. Failure gave us the courage to try some radical things.
  13. When something goes wrong, we tend to see it as a crisis and seek to blame. A better way is to see it as a learning opportunity. Not in the existential sense of general self-improvement. Instead, we can use the technique of asking why five times to get to the root cause of the problem.Here's how it works. Let's say you notice that your website is down. Obviously, your first priority is to get it back up. But as soon as the crisis is past, you have the discipline to have a post-mortem in which you start asking why: 1. why was the website down? The CPU utilization on all our front-end servers went to 100% 2. why did the CPU usage spike? A new bit of code contained an infinite loop! 3. why did that code get written? So-and-so made a mistake 4. why did his mistake get checked in? He didn't write a unit test for the feature 5. why didn't he write a unit test? He's a new employee, and he was not properly trained in TDDSo far, this isn't much different from the kind of analysis any competent operations team would conduct for a site outage. The next step is this: you have to commit to make a proportional investment in corrective action at every level of the analysis. So, in the example above, we'd have to take five corrective actions: 1. bring the site back up 2. remove the bad code 3. help so-and-so understand why his code doesn't work as written 4. train so-and-so in the principles of TDD 5. change the new engineer orientation to include TDD
  14. Webcast: May 1Workshop: May 29Fliers up frontDiscussion in web2open
  15. Run tests locally:-- Sandbox includes as much of production as humanly possible (db, memcached, Solr, Apache).-- Write tests in every language. We use 8 different test frameworks for different environs. Otherwise you get fear and brittle.-- Example kind of problem is that AJAX updater for site header. Seemingly innocuous change would break shopping experience.CIT/BuildBot:-- Simply don’t push with red tests. Even if the site is in trouble. Example Christmas site outage with memcache sampling.-- Give an idea of the scale. 20 machine cluster, runs 10000 tests and 100,000’s of thousand of assertions on every change.Incremental deploy:-- Catch performance bugs and gaps in test coverageSlow query in free tags. This started to drive database load higher on one MySQL instance due to contention and data size. Detected and rolled back before it affected users and before the database was hosed due to high load.Changed transaction commit logic in foundation of the system. This passed all tests but caused registrations to fail in production due to subtle difference between sandbox and production. System detected drop in business metric in 1 minute and reverted the changeAlerting and Predictive MonitoringExample: Second tier ISP to block our outbound emailExample: Rooms list performance time bombExample: Registration quality, second tier payment methods, invite mail success rates by serviceStory: Anything that can go wrong will, so just catch it then fast.