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The Lean Startup Matt Coen Second Street matt@secondstreet.com @mcoen

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Lean Startup Principles Entrepreneurs are everywhere.

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How many of you work for startups?

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“A startup is a human institution designed to deliver a new product or service under condition of extreme uncertainty.” - Eric Ries

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Nothing to do with size, sector of the economy, or industry.

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How many of you work for startups?

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Lean Startup Principles Entrepreneurs are everywhere. Entrepreneurship is management.

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Why Startups Fail?

1. The allure of a good plan, a solid strategy, and thorough market research.

2. Just do it! If management is the problem, chaos is the answer.

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STARTUP =

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WE NEED TO TEST

OUR ASSUMPTIONS

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STOP WASTING

PEOPLE’S TIME

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Entrepreneurship is Management

§  Traditional management practices fail. § Management as taught by MBAs

§  Need practices and principles geared towards the start up context of extreme uncertainty.

§  Not just two guys in a garage.

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Lean Startup Principles Entrepreneurs are everywhere. Entrepreneurship is management. Validated learning.

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THE PIVOT

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The Pivot

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Speed Wins

If we can reduce our time between pivots, we increase our potential for success before we run out of time, money, or patience.

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Lean Startup Principles Entrepreneurs are everywhere. Entrepreneurship is management. Validated learning. Build – Measure – Learn

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Achieving Failure

§  If we are building something nobody wants, what does it matter if its done: § On Time § On Budget § With High Quality § With Beautiful Design

§  Does it matter if you successfully execute a bad plan

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IS IT ENOUGH TO LEARN

SOMETHING?

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A STARTUP EXISTS TO LEARN HOW TO

BUILD A SUSTAINABLE

BUSINESS

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MVP = MINIMUM

VIABLE PRODUCT

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Minimize Total Time Through the Loop

IDEAS

CODE DATA

BUILD LEARN

MEASURE

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Lean Startup Principles

Entrepreneurs are everywhere. Entrepreneurship is management. Validated learning. Build – Measure – Learn Innovation Accounting

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STOP FOCUSING ON

VANITY METRICS

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Three Learning Milestones

1.  Establish the baseline: –  Build a minimum viable product. –  Measure how the customer behaves right now.

2.  Tune the engine: –  Experiment to see if we can improve metrics from the baseline to

the ideal.

3.  Pivot (Persevere): –  When an experiment reaches diminishing returns, it’s time to

pivot.

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EXERCISE #1

ASSUMPTIONS

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EXERCISE #2

EXPERIMENTS

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Questions?

Matt Coen Second Street

matt@secondstreet.com @mcoen