Transcript

Lean Startups - a Method to successfully build your business 1

MY TWO MANTRA’S IN BUILDING A COMPANY

Da Vinci Code Building a Business is like sailing a Sail boat

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LEAN STARTUP METHODOLOGY

Why Lean Startup

Businesses tend to fail because you either run out of time or money.

With unlimited time and unlimited money, all business have 100% ability to exceed

Success is achieved as long as you can figure out the model before you run out of time or money

Key Steps in Building your Business

Document your Plan A

Identify the Riskiest Parts of Your Plan

Systematically Test Your Plan

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DOCUMENT YOUR PLAN A

Step 1 to start you business:

A strong initial vision

a ‘Plan A’ for executing against the vision

BUT....... Most Plan A’s don’t work!

The Lean StartUp

Uphold the strong vision with facts, not faith

It’s built on untested assumptions

Critical Success Factor - Test and refine the vision

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STEP 1: WRITE IT DOWN ON 1 PAGE

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Top 3Problems

Top 3features

Key activitiesyou measure

Simple, clear, compelling message that states why you are different and worth buying

Path to Customers

Can’t be easily copied or bought

Target Customers

Customer Acquisition CostsDistributing CostsHosting, People, etc.

Revenue ModelLifetime ValueRevenueGross Margin

PRODUCT MARKET

PRODUCT VS. WHOLE PRODUCT

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Top 3Problems

Top 3features

Key activitiesyou measure

Simple, clear, compelling message that states why you are different and worth buying

Path to Customers

Can’t be easily copied or bought

Target Customers

Customer Acquisition CostsDistributing CostsHosting, People, etc.

Revenue ModelLifetime ValueRevenueGross Margin

PRODUCT MARKET

WHOLE

PRODUCT

THE PROBLEM - CUSTOMER SEGMENT

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Top 3Problems

Top 3features

Key activitiesyou measure

Simple, clear, compelling message that states why you are different and worth buying

Path to Customers

Can’t be easily copied or bought

Target Customers

Customer Acquisition CostsDistributing CostsHosting, People, etc.

Revenue ModelLifetime ValueRevenueGross Margin

PRODUCT MARKET

WHOLE

PRODUCT

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THE PROBLEM - CUSTOMER SEGMENT

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Top 3Problems

Top 3features

Key activitiesyou measure

Simple, clear, compelling message that states why you are different and worth buying

Path to Customers

Can’t be easily copied or bought

Target Customers

Customer Acquisition CostsDistributing CostsHosting, People, etc.

Revenue ModelLifetime ValueRevenueGross Margin

PRODUCT MARKET

WHOLE

PRODUCT

3One of Most ImportantHardest to Get rightWhy you are different and worth getting attention

Be different, but make sure your difference mattersTarget early adoptersFocus on “finished story” benefits

THE PROBLEM - CUSTOMER SEGMENT

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Top 3Problems

Top 3features

Key activitiesyou measure

Simple, clear, compelling message that states why you are different and worth buying

Path to Customers

Can’t be easily copied or bought

Target Customers

Customer Acquisition CostsDistributing CostsHosting, People, etc.

Revenue ModelLifetime ValueRevenueGross Margin

PRODUCT MARKET

WHOLE

PRODUCT

4 5

THE PROBLEM - CUSTOMER SEGMENT

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Top 3Problems

Top 3features

Key activitiesyou measure

Simple, clear, compelling message that states why you are different and worth buying

Path to Customers

Can’t be easily copied or bought

Target Customers

Customer Acquisition CostsDistributing CostsHosting, People, etc.

Revenue ModelLifetime ValueRevenueGross Margin

PRODUCT MARKET

WHOLE

PRODUCT

678 9

Now What? Step 2: Identify Risks

With Plan A, you are now at the start line of the marathon 11

WHAT ARE RISKS?

Uncertainty = Risk

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Uncertainty: The lack of complete certainty. i.e. the existence of more than one possibility.

An unknown

/Risk: A state of uncertainty where some of the possibilities involve a loss, catastrophe, or other undesirable outcome.

The list of possible reasons your company won’t exist in 5 years.

Three Kinds of Risk

Product Risk - Getting the Product Right

Customer Risk - Building a Path to Customers

Market Risk - Building a Viable Business

PRIORITIZE THE RISKS & GO THRU THEM SYSTEMATICALLY

Customer Pain Level (Problem)

Key Customer segments that need product most (highest pain)

Ease of Reach (Channels)

Sales Go To Market is one of hardest parts of the “Whole Product”

Price/Gross Margin (Revenue Streams/Cost Structure)

The math has to work!

Market Size (Customer Segments)

The Customer Segment needs to be big enough (example: The $1 Billion Rule)

Technical feasibility (Solution)

Is our solution feasible?

AND OF COURSE, Team

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Step 3: Get Ready to Experiment

14Startup = Experiment

BUILD MEASURE LEARN

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Implement

BUILD MEASURE LEARN WITH SPEED LEARNING FOCUS

Speed: Cycle Time - how quickly you can complete a loop of “Build, Measure & Learn”

Learning - Learning about customers thru measurement

Focus - what is your specific idea

Not enough of any one can cause failure:

Lack of Speed - run out of $ or competitor beats you

Lack of Learning - you’re a dog chasing your tail

Lack of Focus - premature optimization trap (example: scaling servers with no customers or optimizing web page with no product)

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Implement

NUMBER 1 SKILL: INTERVIEW CUSTOMERS

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The PROBLEM Interview

Understand your customer’s world before you build a solution

Product Risk - What are we solving (Problem): How do they rank the top three problems?

Market Risk - Who is the competition: How do they solve these problems today

Customer Risk - Who has the pain: Is this a viable customer segment

The SOLUTION Interview

Test the solution with a ‘demo’ before building the actual product

Customer Risk - Who has the pain: Who are my early adopters?

Product Risk - How will you solve these problems: What are the minimum features needed to launch?

Market Risk - Pricing Model: Will customers pay for a solution and what price will they bear?

Get to Release 1.0 of your Company

18Our objective is maximizing learning (about customers) per unit time.

MVP - MINIMUM VIABLE PRODUCT

Once you define what the problem worth solving is:

Something customers want, they will pay for, and it can be solved

Define the MINIMUM feature set to address these problems. This is your MINIMUM FEATURE SET and is the initial product you will build.

The MVP is not half-baked or a buggy product. It addresses not only the TOP PROBLEMS but also the problems worth solving.

It should deliver enough value to justify charging a customer.

Reduce your MVP

Once you define your product, go thru a detailed analytical exercise to reduce it. Take each Unique Value Prop, eliminate nice-to-haves and don’t needs for each.

Focus on learning, not optimization

Little mice in the background is absolutely key!

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Next Step Marketing

Attend the Lean Marketing Session on Saturday, October 27, 2012 20

Presented by: Nathan Monk (‘Digital Cowboy’)

Bio:

•Mars ICE advisory team member with focus on consumer ent. & ecommerce companies•Have a strong passion for entrepreneurship •‘Lean Startup’ practitioner•Digital marketer, sales and BD professional•Experience: CBC, CanWest, OgilvyOne and Yahoo!

Follow Nathan:

@Cowboytweets

Linkedin.com/in/nathanmonk

marsdd.com/blog/author/nmonk/feed/

Questions?

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