1. Lean Startup Essentials
Lean Startup
Essentials
Lukas Fittl
lukas@fittl.com
STARTup Live Graz
30th April 2011
2. Lean Startup Essentials
Agenda
Today’s focus: The early stage
• 10 - 20min blocks, quick Q&A after each
• 1: Why? & The Canvas
• 2: Customer Discovery
• 3: Case Study
4. Lean Startup Essentials #1: Introduction
About Me
• 2nd time entrepreneur
• 2007-2010: Soup.io (Co-founder)
• The Efficient Cloud
“Heroku for Europe” to
“PaaS technology for hosting providers”
(Seedcamp 2011 company)
• Collaborated with Ash Maurya
on the Lean Canvas
5. Lean Startup Essentials #1: Introduction
Where this all comes from
• Steve Blank - Customer Development
• Alex Osterwalder - Business Model Canvas
• Eric Ries - The Lean Startup
• Ash Maurya - Lean Canvas
6. Lean Startup Essentials #1: Lean Startup
Most startups fail from a lack of
(paying) customers.
7. Lean Startup Essentials #1: Lean Startup
Startups are not just a small
version of a big company.
8. Lean Startup Essentials #1: Lean Startup
Startup:
Temporary organization used to
search for a repeatable and scalable
business model.
As defined by Steve Blank.
9. Lean Startup Essentials #1: Lean Startup
Your initial Goal:
Improve likely success rate of your venture,
and reduce risk of failure.
Enable yourself to actually
make the jump into a full-time entrepreneur.
10. Lean Startup Essentials #1: Lean Startup
Your Process:
Likely entirely chaotic.
No one implements the lean startup
as a strict process.
Similar to agile adoption (e.g. Kan-ban)
you need to make a slow transition
into more structured thinking.
11. Lean Startup Essentials #1: The Canvas
So, we need a language
in order to talk about your
startup.
12. Lean Startup Essentials #1: The Canvas
Product is only 1 of the 9
critical aspects that make your
company work.
15. Lean Startup Essentials #1: The BM Canvas
Day Month Year
No.
Who are our Key Partners? What Key Activities do our Value Propositions require? What value do we deliver to the customer? What type of relationship does each of our Customer For whom are we creating value?
Who are our key suppliers? Our Distribution Channels? Which one of our customer’s problems are we helping to solve? Segments expect us to establish and maintain with them? Who are our most important customers?
Which Key Resources are we acquiring from partners? Customer Relationships? What bundles of products and services are we offering to each Customer Segment? Which ones have we established?
Which Key Activities do partners perform? Revenue streams? Which customer needs are we satisfying? How are they integrated with the rest of our business model?
How costly are they?
What Key Resources do our Value Propositions require? Through which Channels do our Customer Segments
Our Distribution Channels? Customer Relationships? want to be reached?
Revenue Streams? How are we reaching them now?
How are our Channels integrated?
Which ones work best?
Which ones are most cost-efficient?
How are we integrating them with customer routines?
What are the most important costs inherent in our business model? For what value are our customers really willing to pay?
Which Key Resources are most expensive? For what do they currently pay?
Which Key Activities are most expensive? How are they currently paying?
How would they prefer to pay?
How much does each Revenue Stream contribute to overall revenues?
This work is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported License.
To view a copy of this license, visit http://creativecommons.org/licenses/by-sa/3.0/
or send a letter to Creative Commons, 171 Second Street, Suite 300, San Francisco, California, 94105, USA.
18. Lean Startup Essentials #1: The Lean Canvas
Focused on Early-Stage
integrates Problem/Solution
fields
19. Lean Startup Essentials #1: The Lean Canvas
Problem Solution Unique Value Unfair Customer
Proposition Advantage Segments
Top 3 problems Top 3 features
Single, clear, Can’t be easily Target customers
compelling copied or bought
message that
states why you
are different and
Key Metrics worth buying Channels
Key activities you Path to
measure customers
Cost Structure Revenue Streams
Customer Acquisition Costs Revenue Model
Distribution Costs Life Time Value
Hosting Revenue
People, etc. Gross Margin
Lean Canvas is adapted from The Business Model Canvas (http://www.businessmodelgeneration.com) and is licensed under the
Creative Commons Attribution-Share Alike 3.0 Un-ported License.
20. Lean Startup Essentials #1: The Lean Canvas
Market
• Customer Segments
• Problem
• Revenue Streams (Pricing)
22. Lean Startup Essentials #1: The Lean Canvas
Market <=> Product
• Unique Value Proposition
• Distribution & Marketing Channels
• Key Metrics
23. Lean Startup Essentials #1: The Lean Canvas
Example: Tupalo
Problem Solution Unique Value Unfair Customer
Proposition Advantage Segments
#1 Finding Business DB
information, Yellowpages Herold / ED #1 9-to-5 folks
quality & location #1 Search online. Partnership looking for lunch
of a business function, Sitemap options, etc.
#2 Business CP Find the best SEO Know-How
#2 Promoting a restaurant/etc. #1 Long-tail
business, Key Metrics near you. Channels mainstream
providing correct
information to #1 Avg. Reviews #1 Long-tail SEO #2 Business
customers per user owners
#2 European (restaurants, etc.)
#2 Avg. Revenue Directories (B2B
per business Sales)
Cost Structure Revenue Streams
Software Development #1 Free
SEO
Partnership Deals #2 Hundreds/Thousands of EUR (recurring)
24. Lean Startup Essentials #1: The Lean Canvas
Example: Freckle
Problem Solution Unique Value Unfair Customer
Proposition Advantage Segments
Tracking time Time tracking
precisely without with superb UX, Time tracking Existing Freelancers
effort no unnecessary software that audience:
fuss you’ll actually Mailinglists, Agencies
Easily invoice use. Twitter, etc.
clients with good
report on Key Metrics Channels
performed work
Hours tracked - Word of mouth
- Cross-sales
Rev. per user - Freebies
- Existing
audience
Cost Structure Revenue Streams
Software Development 12-50 USD / month (dep. on company size)
Marketing/Copywriting
CC fees
Hosting
25. Lean Startup Essentials #1: The Lean Canvas
Example: Garmz
Problem Solution Unique Value Unfair Customer
Proposition Advantage Segments
#1 Mass- No-barriers
producing a fashion #1 Make your Team with #1 Fashion
fashion garment production, design talent industry designers
chosen by the visible experience
#1 Marketing & community #2 Trend-chasing
sales #2 Find the latest hipsters
Key Metrics fashion trend & Channels
#2 Buy trendy be unique
clothes #1 New designs Fashion blogs
Partnerships
uploaded #1 Fashion schools
#1 Fashion events
#2 Conv. rate to #2 Word of mouth /
actual sale strong brand
Cost Structure Revenue Streams
Production! (super expensive) #2 100 EUR / piece
Prototyping
Payout to designer
Marketing, Biz Dev, Software Dev
35. Lean Startup Essentials #2: Customer Discovery
Customer Interviews
30 min in-person with
your prototypical customer
People like talking about their field -
explore their worldview.
36. Lean Startup Essentials #2: Customer Discovery
How to conduct an interview
1. Set context & tell your story
2. Tell your problem hypothesis
3. Listen to their worldview
4. Ask for follow up / references
37. Lean Startup Essentials #2: Customer Discovery
Online Market Tests:
Google Adwords
Fake Landing Page with
“Signup to be notified when we launch”
“Can we call you to ask a couple of Qs?”
38. Lean Startup Essentials #2: Customer Discovery
User Groups & Conferences:
Hand out cards with invite codes -
landing page with “join our soon-to-
launch beta programme”
SolidRails
European VPS cloud. Fully-integrated Rails hosting.
Your private beta access code: OEWO8C
39. Lean Startup Essentials #2: Customer Discovery
Amy Hoy’s
Sales Safari:
Lurk in online forums of your
customer segment, learn how they
talk about products & benefits
