The Lean Startup

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Web & Mobile roadmap for 2012 January 2012

The Lean StartupJanuary 2013

All information in this presentation is the sole property of Leverate Technological Trading Ltd. It may not be distributed, presented to a third party nor used in any form or method without written permission from the company.

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VisionThis slide originally contained Leverates grand vision for 2013.Were very excited about it, but unfortunately we cant show it to everyone

The main point is: this vision, like any vision, is a startup. It looks compelling and exciting, but its based on many assumptions. Could those assumptions be wrong? Should we really invest a huge amount of capital and resources into building this thing?

People have all kinds of crazy ideas for their startups:Revolutionary digital wallet that allows people to transfer money between their Palm Pilot devices

The worlds smartest service to fuel music lovers with recommendations

The worlds leading professional network

But also

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The problem

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What kills startupsWait what is a startup?The course of a startup: funding, runway and 2+ possible outcomesFailure rate is high (varies between sources, commonly 60% to 99.5%)The problem: startups invest too much in bad visionList of things that wont save youBeing smartDream up more vision and ideas startups dont starve, they drownChange market risk theres not much you can doAdd many featuresHave great technologyDo agile R&DDeliver milestones under deadlinesmany companies achieve failureAchieve seemingly high numbers

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Developed by Eric Reis (blog: startup lessons learned)The Lean Startup is a toolbox that aims to increase your chance to succeed:Put your vision to test and fail fastBuild exactly what people want, not what you think they wantStrive to learn, not release new featuresDo it over and over againACCELERATE

Definition of startup is surprising:A startup is a human institution designed to deliver a new product or service under conditions of extreme uncertainty.Geeks in garage? Software? Not only! Applied in US Government & Pentagon, P&G, nonprofits and other areas.Unknowns: problem, solution, audience, business modelThe Lean Startup

The Lean Startup Loop

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Tool #1: Minimum Viable Product (MVP)Identify your assumptions and create a small set of features to validate themWith little or no engineering at all!Algorithm: whatever you think it is, its probably way smaller

Example: (acquired for $1.2B)

The problemThe solution:Find and launch the smallest possible product that proves that your vision works in reality (and not only in your brain)

Examples of MVP

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Tool #2: Actionable MetricsThe problemThe solution: identify your most important metrics and focus on improving only themThe rest is vanity metrics! A great way to fall to the land of the living dead startups

To find a local maximum, use A/B testing, landing pages, Continuous DeploymentIf things dont look good: pivot

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Did it right

Age 3 months: MVP for social activism+ doncations, cost $1,206Age 6 months: Optimized with A/BAge 8 months: rely on facebook + twitter, verify voters, @2govAge 12 months: go B2B after LOIRaised investment after 18 months, ~$120K (exponential)

15 months: Platform pivot- AdWords like (pay per success)

PIVOT!PIVOT!PIVOT!

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Tool #3: The 5 WhysThe problemExample:A new release broke a key feature for customers. Why? Because a particular server failed.Why did the server fail?Because an obscure subsystem was used in the wrong way.Why was it used in the wrong way?The engineer who used it didn't know how to use it properly.Why didn't he know?Because he was never trained.Why wasn't he trained?Because his manager doesn't believe in training new engineers, because they are "too busy.

Now invest proportionally in fixing the problems

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SummaryThought tool #1: identify the hidden assumptions in what startups are buildingThought tool #2: identify when too much work is done according to gut feelingTool #1: Launch an MVP with minimal effortTool #2: Rely on actionable metrics, not vanity metricsTool #3: Improve your process by using the 5 whys

And its not an option because everything is changing:Risk- from technology risk to business risk if you can dream it, you can build itTechnology- open source, cloud, hardware- competition is getting wildInvestors & funding - be efficient and profitableThe speed of your competitors

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