10. Trial-and-Error World
• One who can find errors the fastest wins
• “Fail fast”
• “Speed Wins”
• “Lean”
• “Agile”
11. Trial-and-Error World
• Getting feedback from real users as quickly as possible
• Building product, writing marketing plan
• Asking two questions:
1. What is the riskiest assumption?
2. What is the smallest experiment I can do to test
this assumption?
12. MVP
• Product with just enough features that could be sold
• Carrying out market analysis beforehand
23. Startups
• Dedicated to creating something new
• Conditions of extreme uncertainty
• Mission: discover successful path to sustainable business
• Most fail
• Preventable
24. Lean Startup Approach
• More capital efficient
• Leverage human creativity more effectively
• Lessons from lean manufacturing
• “Validated learning”
25. Lean Startup Approach
• Counter-intuitive practices
• Shift directions with agility
• Altering plans inch by inch, minute by minute
26. Lean Startup Approach
• Not wasting time creating elaborate business plans
• Test continuously
• Adapt and adjust
• Scientific approach
• Creating and managing successful startups
27. Lean Startup
• “Startup success can be engineered by following the process,
• which means it can be learned,
• which means it can be taught.”
28. Lean Startup
• Get desired product to customers' hands faster
• Drive, steer, turn, and persevere
• Principled approach to new product development.
29. Startups
• Begin with idea for product that they think people want
• Spend months, years, perfecting product without ever
showing to prospective customer
• Never spoke to prospective customers
• When customers ultimately communicate through
indifference > fails
31. • “By the time that product is ready to be distributed widely,
• it will already have established customers.”
32. Eliminate Uncertainty
• Tailored management process
• Not "just do it" approach
• Create order not chaos by testing vision continuously
• Putting methodology around development of product
33. Work Smarter not Harder
• Startup grand experiment
• Answer question
• Not "Can this product be built?"
• But
• "Should this product be built?"
• "Can we build sustainable business around this set of products
and services?"
34. Work Smarter not Harder
• Not theoretical inquiry
• First product
• Get started with campaign
• Enlisting early adopters
• Solved real problems
• Detailed specifications
36. Lean Startup Methodology
• Build-Measure-Learn feedback loop
• Figure out problem to be solved
• Develop minimum viable product (MVP)
• Process of learning as quickly as possible
37. Lean Startup Methodology
• Startup work on tuning engine
• Involve measurement and learning
• Include actionable metrics that demonstrate cause and
effect question
38. Lean Startup Methodology
• Startup utilize investigative development method called
"Five Whys“
• Asking simple questions to study and solve problems
• Clear if company either moving drivers of business model
or not
• If not, pivot or make structural course correction to test
new fundamental hypothesis about product, strategy and
engine of growth
40. Validated Learning
• Rigorous method for demonstrating progress
• Development process shrink substantially
• Figuring right thing to build - thing customers want and
will pay for
• Not spend months waiting for product launch to change
company's direction
42. Entrepreneurs are Everywhere
• Don't have to work in garage to be startup
• See need
• Get started
• “Concierge MVP" technique - entrepreneur solves
customer problems manually before automating solution;
with customers, figuring out what really needs to be done
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43. • "Use customer feedback to improve the solution,
• repeating the process to rapidly create an effective solution,
• that meets the customer service need."
46. Validated Learning About Customers
• Startups exist not to make stuff, make money, or serve
customers
• Exist to learn to build sustainable business
• Learning validated scientifically
• Running experiments to test each element of vision
3
47. Validated Learning About Customers
• Revenue alone not a sufficient goal
• Focusing on it exclusively can lead to failure as surely as
ignoring it altogether
• What matters proving viability of business model
(“traction”)
48. Validated Learning About Customers
• Customer Validation
• Total revenue not very useful
• How profitable is it on per-customer basis?
• What’s the total available market?
• What’s ROI on acquiring new customers?
• How do existing customers respond to our product over time?
49. Innovation Accounting
• Startups exist not to make stuff, make money, or serve
customers
• Exist to learn to build sustainable business
• Learning validated scientifically
• Running experiments to test each element of vision
4
50. Innovation Accounting
• Improve entrepreneurial outcomes
• Hold entrepreneurs accountable
• Focus on boring stuff:
• How to measure progress
• How to setup milestones
• How to prioritize work
• New kind of accounting
51. Build-Measure-Learn
• Startup
• Turn ideas into products
• Measure how customers respond
• Learn whether to pivot or persevere
• Successful startup processes geared to accelerate
feedback loop
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52. Product Development
• “Good enough never is”
• Inspirational
• “This work is simply not good enough”
• Create environment where courage thrives
53. Is "good enough" good enough?
• Rules of thumb unhelpful
• When should you settle for good enough and when should you
push yourself to do your best?
• Dilemma that minimum viable product designed to
solve
• Hard
54. Third Way
• Action/paralysis not only options
• “Customer is the most important part of the production line.”
• Quality defined in eye of customer - not by standards set
by insiders - factors beyond reliability: design, ease of
use, aesthetic appeal, and convenience
55. MVP
• How can we build quality in if we do not yet know who the
customer is?
• “If you do not know who the customer is,
• you do not know what quality is”
57. MVP
• Version of new product
• Allows team to collect maximum amount of validated
learning
• With least effort
58. MVP
• What will the customer care about?
• How will they define quality?
59. MVP
• Startups simplify
• How do you know which features are essential and which
should go?
• No formula
• Requires judgment
60. Pursuit of Learning
• Product-centric
• Ongoing
• Commitment absolute
• Execute, iterate, and learn
• Get through build-measure-learn feedback loop with
maximum speed