INTRO TO THE LEAN STARTUPLUNCH & LEA(R)N - DEC 2015

WHY DO I CARE?

I’M A 3X “WANT-TREPRENEUR”.

▸ 2007: Online Social Language Learning! #fail

▸ 2008-2010: Emotive Social Profiles! #fail!

▸ 2012-?: Dance Online! (fail date TBD)

FOX INTERACTIVE MEDIA - 2006

QUIT GOOD JOB, 9 MONTHS SPAM & RICE, $$$$ FAMILY LOAN THAT I’M STILL PAYING BACK

2 YEARS DEV OUTSIDE DAY JOB, ALMOST LOST FUTURE WIFE

3 MONTHS DEV, $$ AD SPEND

LEARNED SOME THINGS!

WHAT HAPPENED?

REDUCED WASTE & EMPHASIZED LEARNING

I READ THIS BOOK

5 PRINCIPLESWHAT IS THE LEAN STARTUP?

PRINCIPLE #1: ENTREPRENEURS ARE EVERYWHERE.

Eric Ries

LEAN PRINCIPLE #1: ENTREPRENEURS ARE EVERYWHERE.

A STARTUP: A HUMAN INSTITUTION DESIGNED TO CREATE NEW PRODUCTS AND SERVICES UNDER CONDITIONS OF EXTREME UNCERTAINTY.

Eric Ries

LEAN PRINCIPLE #1: ENTREPRENEURS ARE EVERYWHERE.

I THINK WE’RE A STARTUP.

Me

LEAN PRINCIPLE #1: ENTREPRENEURS ARE EVERYWHERE.

PRINCIPLE #2: ENTREPRENEURSHIP IS MANAGEMENT.

Eric Ries

LEAN PRINCIPLE #2: ENTREPRENEURSHIP IS MANAGEMENT.

A STARTUP IS AN INSTITUTION, NOT JUST A PRODUCT, AND SO IT REQUIRES A NEW KIND OF MANAGEMENT SPECIFICALLY GEARED TO ITS CONTEXT OF EXTREME UNCERTAINTY.

Eric Ries

LEAN PRINCIPLE #2: ENTREPRENEURSHIP IS MANAGEMENT.

BECAUSE STARTUPS OFTEN ACCIDENTALLY BUILD SOMETHING NOBODY WANTS, IT DOESN’T MATTER MUCH IF THEY DO IT ON TIME AND ON BUDGET.

Eric Ries

LEAN PRINCIPLE #2: ENTREPRENEURSHIP IS MANAGEMENT.

THE GOAL OF A STARTUP IS TO FIGURE OUT THE RIGHT THING TO BUILD— THE THING CUSTOMERS WANT AND WILL PAY (OR SIT THROUGH ADS) FOR— AS QUICKLY AS POSSIBLE.

Eric Ries

LEAN PRINCIPLE #2: ENTREPRENEURSHIP IS MANAGEMENT.

GIVEN OUR COMPETITIVE MARKET AND LEAN TEAM, I FEEL THE IDEAS WE IMPLEMENT SHOULD BE MANAGED LIKE STARTUPS TO ACHIEVE MEASURABLE RESULTS AS QUICKLY AND EFFICIENTLY AS POSSIBLE.

LEAN PRINCIPLE #2: ENTREPRENEURSHIP IS MANAGEMENT.

PRINCIPLE #3: VALIDATED LEARNING.

Eric Ries

LEAN PRINCIPLE #3: VALIDATED LEARNING.

STARTUPS EXIST TO LEARN HOW TO BUILD A SUSTAINABLE BUSINESS.

Eric Ries

LEAN PRINCIPLE #3: VALIDATED LEARNING.

THIS LEARNING CAN BE VALIDATED SCIENTIFICALLY BY RUNNING FREQUENT EXPERIMENTS THAT ALLOW ENTREPRENEURS TO TEST EACH ELEMENT OF THEIR VISION.

Eric Ries

LEAN PRINCIPLE #3: VALIDATED LEARNING.

PRINCIPLE #4: BUILD-MEASURE-LEARN.

Eric Ries

LEAN PRINCIPLE #4: BUILD-MEASURE-LEARN.

THE FUNDAMENTAL ACTIVITY OF A STARTUP IS TO TURN IDEAS INTO PRODUCTS, MEASURE HOW CUSTOMERS RESPOND, AND THEN LEARN WHETHER TO PIVOT OR PERSEVERE.

Eric Ries

LEAN PRINCIPLE #4: BUILD-MEASURE-LEARN.

ALL SUCCESSFUL STARTUP PROCESSES SHOULD BE GEARED TO ACCELERATE THAT FEEDBACK LOOP.

LEAN PRINCIPLE #4: BUILD-MEASURE-LEARN.

Eric Ries

LEAN PRINCIPLE #4: BUILD-MEASURE-LEARN.

THE LEAN WAY TO BUILD-MEASURE-LEARN

▸ Take your great idea (“Vision”) and identify its Leap-of-Faith assumptions. Identify the riskiest assumption.

▸ Devise the smallest thing you can build in order to test that assumption (“MVP”).

▸ Release MVP and measure user engagement.

▸ Learn from the data whether your assumption was validated.

▸ If so, great! Build and test the next assumption of your Vision.

▸ If not, decide whether to change your idea/strategy (“pivot”) or persevere.

THE LEAN STARTUP METHOD BUILDS CAPITAL-EFFICIENT COMPANIES BECAUSE IT ALLOWS STARTUPS TO RECOGNIZE IT’S TIME TO PIVOT SOONER, CREATING LESS WASTE OF TIME AND MONEY.

LEAN PRINCIPLE #4: BUILD-MEASURE-LEARN.

Eric Ries

WHAT IDEAS CAN YOU THINK OF THAT COULD BE APPROACHED IN A “LEAN” WAY?

LEAN PRINCIPLE #4: BUILD-MEASURE-LEARN.

PRINCIPLE #5: INNOVATION ACCOUNTING.

Eric Ries

LEAN PRINCIPLE #5: INNOVATION ACCOUNTING.

TO IMPROVE ENTREPRENEURIAL OUTCOMES AND HOLD INNOVATORS ACCOUNTABLE, WE NEED TO FOCUS ON THE BORING STUFF: HOW TO MEASURE PROGRESS, HOW TO SET UP MILESTONES, AND HOW TO PRIORITIZE WORK.

Eric Ries

LEAN PRINCIPLE #5: INNOVATION ACCOUNTING.

LEAN PRINCIPLE #5: INNOVATION ACCOUNTING.

ACCOUNT FOR INNOVATION WITH 3 LEARNING MILESTONES

▸ Learning Milestone #1: Choose your Engine of Growth and baseline its key metrics.

▸ “Sticky” Growth Engine: Growth = (User Acq Rate >> Churn Rate)

▸ “Viral” Growth Engine: Growth = (Viral Coefficient > 1.0)

▸ “Paid” Growth Engine: Growth = (Rev per User >> User Acq Cost)

▸ Learning Milestone #2: Tune your engine with MVPs that actually drive its metrics.

▸ Learning Milestone #3: Over time, see if your numbers are trending towards Growth — If not, decide whether to Pivot or Persevere!

WHAT DO YOU THINK?THANKS FOR LISTENING!