Lean Startups from LEI
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The Lean Startup method focuses on reducing the time between product iterations through validated learning about customers. It defines the unit of progress as validated learning rather than completing stages of production. This allows startups to test hypotheses through experiments and gain customer insights faster to minimize the total time to discover what customers want. Traditional assumptions like knowing customers and the future can destroy startups, so the Lean Startup validates assumptions through measurable results.
Lean Startups from LEI
- 1. The Lean Startup p #leanstartup Eric Ries (@ericries) http://StartupLessonsLearned.com
- 2. Housekeeping • To enlarge slides, use the magnifying glass icon just beneath the slides and to the right on your display console • To adjust the sound, use the volume control on the console or on your computer • T ask a question, type it i t th b at th b tt To k ti t into the box t the bottom of the console and hit “submit” 2
- 3. About the Speaker • E i Ri Eric Ries – Entrepreneur – Co-founder Co founder and CTO of IMVU – StartupLessonsLearned.com – Co author Co-author of several books – Featured in the NY Times 4/25/10 (“The Rise of the Fleet-Footed Start-Up”) Fl t F t d St t U ”) 3
- 4. Myth #1 Myth Lean means cheap. Lean startups try to spend as little money as possible possible. Truth The Lean Startup method is not about cost, it is about speed. speed 4
- 5. Myth #2 Myth The Lean Startup is only for Web 2 0/internet/consumer software companies 2.0/internet/consumer companies. Truth The L Th Lean Startup applies to all companies that St t li t ll i th t face uncertainty about what customers will want. want 5
- 6. Myth #3 Myth Lean Startups are small bootstrapped startups. Truth T th Lean Startups are ambitious and are able to deploy large amounts of capital. 6
- 7. Myth #4 Myth Lean Startups replace vision with data or customer feedback feedback. Truth Lean Startups are d i L St t driven by a compelling vision, b lli i i and are rigorous about testing each element of this vision vision. 7
- 8. What is a Startup? A startup is a human institution designed to deliver a new product or service under conditions of extreme uncertainty uncertainty. Nothing to do with size of company, sector of the economy, or industry. 8
- 9. Most Startups Fail 9
- 10. Most Startups Fail 10
- 11. Most Startups Fail 11
- 12. Most Startups Fail • But it doesn’t have to be that way doesn t • We can do better • This talk is about how 12
- 13. Entrepreneurship is Management • Our goal is to create an institution, not just a g j product • Traditional management practices fail • “general management” as taught to MBAs g g g • Need practices and principles geared to the startup context of extreme uncertainty • Not just for “two guys in a garage” two garage 13
- 14. The Pivot • What do successful startups have in common? – They started out as digital cash for PDAs, but evolved into online payments for eBay – They started building BASIC interpreters, but evolved into the y g p , world's largest operating systems monopoly – They were shocked to discover their online games company was actually a p y photo-sharing site g • They were shocked to discover their online games company was actually a photo-sharing site • Pivot: change directions but stay grounded in what h d b d d h we’ve learned 14
- 15. Speed Wins If we can reduce the time between major iterations We can increase our odds of success 15
- 16. A Tale of Two Startups 16
- 17. Startup 1 17
- 18. Stealth Startup Circa 2001 18
- 19. All About the Team 19
- 20. A Good Plan? • Start a company with a compelling long-term vision • Raise plenty of capital • Hire the absolute best and the brightest • Hire an experienced management team with tons of startup experience t t i • Focus on quality • Build a world-class technology platform • Build buzz in the press and blogosphere 20
- 21. In Memoriam 21
- 22. Achieving Failure • Product launch failed - $40MM and five years of pain • … but the plan was executed well • C i l d by “shadow beliefs” that destroyed the Crippled b “ h d b li f ” th t d t d th effort of all those smart people 22
- 23. Shadow Belief #1 We know what customers want want. 23
- 24. Shadow Belief #2 We can accurately predict the future future. 24
- 25. Shadow Belief #3 Advancing the plan is progress. progress 25
- 26. A Good Plan? • Start a company with a compelling long-term vision p y p g g • Raise plenty of capital • Hi the absolute best and the b i ht t Hire th b l t b t d th brightest • Hire an experienced management team with tons of startup experience t t i • Focus on quality • Build a world-class technology platform • Build buzz in the press and blogosphere 26
- 27. Startup 2 27
- 28. IMVU 28
- 29. IMVU 29
- 30. New Plan • Shipped in six months – a horribly buggy beta product • Charged from day one • Shipped multiple times a day (by 2008 (b 2008, on average 50 times a day) ti d ) • No PR, no launch • Results 2009: profitable, revenue > $20MM 30
- 31. Making Progress • In a lean transformation, question #1 is – which ,q activities are value-creating and which are waste? • In traditional business, value is created by delivering , y g products or services to customers • In a startup, the product and customer are unknowns p, p • We need a new definition of value for startups 31
- 32. Traditional Product Development Unit of Progress: Advance to Next Stage Waterfall Requirements Specifications Design Problem: known Solution: known Implementation Verification Maintenance 32
- 33. Agile Product Development Unit of Progress: A line of Working Code “Product Owner” or in-house customer Problem: known Solution: known 33
- 34. Product Development at Lean Startup Unit of Progress: Validated Learning About Customers ($$$) Hypotheses, Experiments, Problem: known Insights Solution: known Data, Feedback, Insights 34
- 35. Minimize TOTAL time through the loop 35
- 36. There’s much more… Learn Faster Build Faster Split Tests Unit Tests Customer Interviews Usability Tests Customer Continuous Integration Development Incremental Five Whys Root Cause Deployment Analysis Free & Open-Source Customer Advisory Components Board Cloud Computing Falsifiable Hypotheses Cluster Immune System Product Owner Just-in-time Scalability Accountability Measure Faster Measure Faster Refactoring Customer Archetypes Split Tests Funnel Analysis Developer Sandbox Cross-functional Clear Product Owner Cohort Analysis Teams Minimum Viable Product Continuous Deployment Net Promoter Score Semi-autonomous Teams T Usability Tests Search Se h Engine Marketing M keting Smoke Tests Real-time Monitoring Real-Time Alerting Customer Liaison Predictive Monitoring 36
- 37. Thanks! • Startup Lessons Learned Blog – http://StartupLessonsLearned.com – In print: http://bit.ly/SLLbookbeta • Getting in touch (#leanstartup) – http://twitter.com/ericries p – eric@theleanstartup.com • Lean Startup Intensive at Web 2 0 Expo 2.0 May 3, 2010 in San Francisco – http://web2expo.com/webexsf2010/public/schedule/detail/13260 37