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Fredi Schmidli, Norbert Zeller & Joël Perrenoud Zürich, 17. März 2015 Lean Innovation How to increase the Success Rate of Startups Introduction for 1 17.3.15 www.pragmaFcsoluFons.ch

Angel Day: Lean Innovation - How to increase the Success of Start-ups

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Page 1: Angel Day: Lean Innovation -  How to increase the Success of Start-ups

Fredi  Schmidli,  Norbert  Zeller  &  Joël  Perrenoud  Zürich,  17.  März  2015  

Lean Innovation How to increase the Success Rate of

Startups

Introduction for

1  17.3.15   www.pragmaFc-­‐soluFons.ch  

Page 2: Angel Day: Lean Innovation -  How to increase the Success of Start-ups

Fredi Schmidli

•  Economist  and  BA  •  Management  Teams  in  various  funcFons  •  Entrepreneur  •  Business  Angel  and  Boardmember:  www.startangels.ch  •  Partner  at  pragmaFc  soluFons  

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Norbert Zeller •  EE  FH,  MoM  MZSG  •  Management  Teams  in  various  funcFons  •  Partner  at  Trivadis  AG  •  StartAngels  member  •  Board  member  •  Entrepreneur  •  Agile  execuFve  coach  at  pragmaFc  soluFons    •  Chairman  Diviac  

3  17.3.15   www.pragmaFc-­‐soluFons.ch  

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4  17.3.15   www.pragmaFc-­‐soluFons.ch  

Joel  Perrenoud*  Harvard  MBA,  global  leadership  experience  (EMEA  President  Korn/Ferry),  McKinsey  (San  Francisco),  Compaq…  

Roman  Osipenko  MSc,  Computer  science,  Kiev  Polytechnic,  System  Administrator,  front-­‐end  and  back-­‐end  web  development…  

Thomas  Achhorner*  MSc,  Computer  Science  ETH,  Partner  at  BCG  (Sydney,  Beijing,  Zurich),  IBM…    

Team   Investors  /  advisors  

Paul  Sevinç  

ChrisFan  Wanner  

Gregory  Gerhardt  

Tobias  Asch  

Internet  Entrepreneurs  

Business  Angels  

Norbert  Zeller*  

Philipp  Cocer*  

Others  

*Board  members  

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What are your goals / expectations? •  Team  up  by  2  

•  Discuss  what  you  expect  from  the  training  

•  Write  down  1  goal  per  person  on  a  Post-­‐it:  5‘  

•  All  •  Present  goals:  5‘  

10  Minutes    

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agility  accelerates  ...  

AGENDA

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agility  accelerates  ...  

OVERVIEW

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Goal: To improve the success rate

Source:  Ash  Maurya  «Running  Lean»  

8  

•  66%  of  successful  products/companies  significantly  change  original  business  idea  

•  Develop  product  in  half  the  Fme  and  at  half  the  cost  (GE)      

•  Reduce  failure:  “wrong”  product  and  “premature”  scaling  

•  Success  comes  not  from  beper  idea,  but  from  a  framework,  which  iterates  your  original  ideas  to  a  product,  which  customers  will  buy.  

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Traditional versus lean approach

Source:  Ash  Maurya:  Running  Lean  9  17.3.15   www.pragmaFc-­‐soluFons.ch  

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Core Lean Principle

Get out of the building

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From Lean Mfr. to Lean Innovation

Lean  EcoSystem  

Classic  Lean  Management  

Invented  by  Toyota  arer  WW2  

Maximize  efficiency  under  “stable”  condiFons  

Not  strongest  in  innovaFon  space  

Focus  on  conFnuous  improvement  and  execuFon  excellence  

Lean  Startup  

Blank  /Ries  /Osterwalder  5  years  old  

Maximize  innovaFon  efficiency  under  extreme  uncertainty  

Agile  development        (not  waterfall)                                                                customer  development  (not  market  research)  

It  took  50+  years  unFl  agile  SW  development  methods  finally  started  to  successfully  combine  innovaFon  with  lean  management  principles    

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Lean Innovation is …

12  

a  company  culture  touching  all  aspects:  Values,  Leadership,  IncenFves,  Empowerment,  OrganizaFon,  Accountability,    …  

not  a  collecFon  of  tools  

A  culture  can  not  be  copied  easily      

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Lean Innovation Framework

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Lean Innovation Framework

Scale  Product  Market  

fit  

Problem  SoluFon  

fit  

Customer    Discovery  

Customer    ValidaFon  

Customer    CreaFon  

14  

Each  hypothesis  is  validated  via  an  experiment  with  BML  feedback  loop  

Is  problem  worth  solving,  are  people  willing  to  pay,  is  business  model  profitable,  repeatable  and  scalable  

Hypotheses  of  plan  A,  …  

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agility  accelerates  ...  

BUSINESS MODEL GENERATION

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Lean Canvas (by Ash Maurya / adapted from Osterwalder)

16  

guess  

guess  

guess  

guess  

guess  

guess  

guess  

guess  

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Lean Canvas Example

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Lean Canvas (by Ash Maurya / adapted from Osterwalder)

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Early Adopters

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2.5%   13.5%   34%   34%   16%  

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Persona Development understand the “why’s” by looking at the customers behaviors  

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Facts  Factual  informaFon  about  your  target  customer  

Pain  State  the  problem  you  believe  your  target  customers  have,  that  your  soluFons  solves  

Behavior  ExisFng  behavior  they  exhibit  now,  because  they  don’t  have  your  soluFon  

Goals  What  goals  are  they  trying  to  accomplish  with  their  behavior,  that  your  soluFon  will  do  beper  

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Lean Canvas (by Ash Maurya / adapted from Osterwalder)

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•  Welcome:  Set  the  scene  (2min)          

•  Interviewees  demographics-­‐target  customer?  (2min)          

•  Describe  problem  (your  hypothesis)  (2min)          

•  Rank  top  three  problems/must  have’s  (4min)          

•  Listen  to  their  world  view  (15min)          

•  Wrap  up.  Sum  up  feedback  to  confirm  understanding  (2min)          

•  Get  permission  to  follow  up.  Get  referrals  (2min)          

Problem Interview

Ash  Maurya  

•  Document  results      

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Goal:  Have  I  idenIfied  a  problem  worth  solving?          

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Lean Canvas (by Ash Maurya / adapted from Osterwalder)

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Page 24: Angel Day: Lean Innovation -  How to increase the Success of Start-ups

Lean Canvas (by Ash Maurya / adapted from Osterwalder)

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Solution Interview

Ash  Maurya  

•  Tell  a  story  -­‐  frame  the  product  (2min)      •  Show  Demo/Pretotype/MVP  (15min)      •  Wrap  up.  Sum  up  feedback  to  confirm  understanding  (2min)      •  Get  permission  to  follow  up.  Get  referrals  (2min)    •  Document  results    

•  Welcome:  Set  the  scene  (2min)  •  Collect  demographics  –  right  customer  segment?  (2min)    

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•  Test  the  pricing  (15min)      

Goal:  Have  I  built  sth.  people  want  at  the  price  they  will  pay?          

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Intermediate Health Check

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agility  accelerates  ...  

BREAK

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agility  accelerates  ...  

BUILD – MEASURE - LEARN FEEDBACK LOOP

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Feedback loop

Design    experiment  

Proposal,  Pretotype,  Landing  page,  MVP  …  Results    

Analyze  results:  persevere,  pivot  or  quit?  

weeks    not    years  

AssumpFon/  Hypothesis  

Run    experiment  

CreaFvity    happens  here  

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Source:  Eric  Ries:  The  Lean  Startup  

Page 30: Angel Day: Lean Innovation -  How to increase the Success of Start-ups

BUILD: Design Experiment

We  will  know  we  have  succeeded  when  [quanFtaFve/measurable  outcome]  or  [qualitaFve/observable  outcome]  

Janice  Fraser  

We  believe  that  [customer  type]  have  a  need  for  [need/acFon/behavior]  

The  smallest  thing  we  can  do  to  prove  that  need  is  [experiment]  

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31  

BUILD: Client Loyalty Metrics

1.  How  likely  is  it  that  you  would  recommend  this        AngelDay  introducFon  to  a  friend  or  colleague?  

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Source:  NetPromoter  Score  

2.  What  changes  would  we  have  to  make  for  you  to  give  us  one  point  more?    

……………………………………………………………………………………………………………  

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32  

BUILD: Your metrics for diviac?

17.3.15  

Every  one  on  its  own  :  Write  three  post-­‐it  notes  with  the  three  most  important  metrics  at  diviac  and  discuss  them  with  your  neighbor.  

5  Minutes  www.pragmaFc-­‐soluFons.ch  

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Product: From Proposal to MVP

4)  Early  version  with  minimal  feature  set  that  can  be  sold  to  early  adopters    

1)  Proposal:  a  document  describing  the  soluFon    

3)  Fake  demo  of  any  kind  

2)  Smoke  Test:  Landing  Page  to  test  interest    

MV

P P

reto

type

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P: Pretotype Example (Pinocchio) Simulate  living  room  ambience  effect  of  flat  Screen  TV  (compared  to  CRT)  Around  2002  

From  Tom  Kelly  „the  ten  faces  of  innovaFon“  

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P: Pretotype Example (Explainer Video)

Test  vision  of  cloud  service  offering  -­‐  Dropbox  

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hpps://www.youtube.com/watch?v=7QmCUDHpNzE  

Page 36: Angel Day: Lean Innovation -  How to increase the Success of Start-ups

Learn: Innovation Accounting Report

Why  is  it  relevant?  

QuanFfy  your  goals  set  scope/Fmebox  

Plan  how  to  execute  experiment  

Results  =  Data  

Document  the  learning  (validated,  invalidated  or  inconclusive)    

Test  value  and  growth  hypothesis  first  

Move  to  next  experiment  

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LEARN: Persevere

I am convinced that half of what separates the successful entrepreneurs from the non-successful ones is pure perseverance 17.3.15   37   www.pragmaFc-­‐soluFons.ch  

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LEARN: … or pivot

Pivot: A change in strategy without a change in vision

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LEARN: ... or quit? •  CommunaliFes  of  

•  Reto  von  Arx  •  Marco  Streller  •  Dominique  Gisin  

•  Right  Fme  to  quit?  •  Learnings  from  behavioral  finance?  

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agility  accelerates  ...  

CUSTOMER DEVELOPMENT

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Goal: Problem Solution Fit => Value Problem  SoluIon  Fit  You  validated  with  MVP  and  prospects  that  a  specific  soluFon  will  solve  a  know  problem  to  such  a  degree  that  customer  will  buy  it.      

 Brant  Cooper  

Value  assumpIon  –  test  whether  a  product  or  service  really  delivers  value  to  specific  customers  once  using  it.    

Scale  Product  Market  

fit  

Problem  SoluFon  

fit  

Customer    Discovery  

Customer    ValidaFon  

Customer    CreaFon  

Is  the  idenFfied  problem  real?    Will  the  target  customer  pay?    Can  the  problem  be  solved?    

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The  growth  assumpIon  –  test  how  new  customers  will  discover  a  product  or  service.  Through  what  engine  will  you  acquire  new  customers  at  affordable  cost.  

Goal: Product Market Fit => Growth Product  Market  Fit  Customer  is  willing  to  pay.    Cost  of  acquiring  new  customers  is  smaller  than  profit.    Evidence  that  market  is  large  enough        Brant  Cooper  

Scale  Product  Market  

fit  

Problem  SoluFon  

fit  

Customer    Discovery  

Customer    ValidaFon  

Customer    CreaFon  

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agility  accelerates  ...  

LEAN REPORTING AND GOVERNANCE

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Lean Dash Board (Lean Stack)

Flow

44  

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Lean Dash Board: Example

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Customer  Example:  Insurance  Company  

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Lean Innovation Investment Process

Source:  Hans  Däpp,  StartAngels  Network  17.3.15   www.pragmaFc-­‐soluFons.ch   46  

AssumpIon/Goal:  Halving  &  Slicing  of  Angel  Investments  

FFFF  Business  Canvas  V12,  Problem  SoluFon  fit    &  Product  Market  fit  &  Dash  Board    R

esults  &  

Bus.Canv.

V  X  

tMileston

e  1  

Lean  Investmen

t  whe

n?  

Investmen

t  today  

Busin

ess  

Plan  V  1.0  

Effort  Manpower  (%)          1        10        80  Elapsed  Fme  (month)        1  -­‐  3        2  -­‐  3        18  -­‐…      

Public  BP  course  machine    sFll  running  

No/few  public    Lean  InnovaFon  Trainings  available  

Lean  InnovaFon  Training  is  part  of  BA  investment  (=  risk  insurance)  

Goal:  On  por�olio  basis  to  Get  higher  Success  Rate  &  less  get  funds    &  more  quits  

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agility  accelerates  ...  

DISCUSSION

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agility  accelerates  ...  

EXPECTATION CHECK

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49  

Feedback Door

1.  How  likely  is  it  that  you  would  recommend  this        AngelDay  introducFon  to  a  friend  or  colleague?  

17.3.15   www.pragmaFc-­‐soluFons.ch  

Source:  NetPromoter  Score  

2.  What  changes  would  we  have  to  make  for  you  to  give  us  one  point  more?    

……………………………………………………………………………………………………………  

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Infos, Coordinates, next Trainings •  hpps://leanstack.com/LeanCanvas.pdf    •  fredi@pragmaFc-­‐soluFons.ch  •  [email protected]  •  [email protected]  •  Nächste  Lean  InnovaFon  Trainings  in  Zürich:  

•  25./26.  März,  2015  •  19./20.  Mai,  2015  hpp://pragmaFc-­‐soluFons.ch/training.php?KP=20&TITLE=Lean%20InnovaFon%20Training  

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agility  accelerates  ...  

THE END

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