Intro to Lean Startup

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Hung PhamRegional Workshop Leader - Lean Startup MachineFounder and Producer - Culture SummitFounder - Profile GurusEmail: hung@leanstartupmachine.com

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What is Lean Startup?

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Lean Startup is a method for developing businesses and products first proposed in 2011 by Eric Ries. Ries claims that startups can shorten their product development cycles by adopting a combination of business-hypothesis-driven experimentation, iterative product releases, and what he calls “validated learning”.

- Wikipedia

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Lean Startup is a process for validating and invalidating your assumptions as quickly as possible to discover and deliver what people actually want while reducing waste.

- Me

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Lean Startup comes from Lean Manufacturing and Lean Thinking, which is derived from Toyota's factory production system, as they rose to prominence.

The fundamental principle of lean thinking is eliminating waste. Waste is any human activity which absorbs resources but creates no value.

- Womak/Jones “Lean Thinking”

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Type of Waste Definition

Waste of Over Production Creating more than is needed

Waste of Defects Errors, mistakes causing rework

Waste of Inventory Holding more inventory than needed

Waste of Over Processing Processing more than required

Waste of Transportation Movement of items more than required

Waste of Waiting Time loss by employees & customers from waiting

Waste of Motion Movement of people that does not add value

In a start-up waste is defined as anything that keeps the team from learning about how to create value for the customer. 

- Eric Ries “Lean Startup”

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It Starts With a Vision

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It Starts With a Vision

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It Starts With a Vision

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Too Often Startups Build This

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When the Customer Wants This

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Lean Startup is a process for validating and invalidating your assumptions as quickly as possible to discover and deliver what people actually want while reducing waste.

- Me

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The Foundation of Lean Startup

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The Foundation of Lean Startup

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The Foundation of Lean Startup

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The Foundation of Lean Startup

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The Foundation of Lean Startup

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The Foundation of Lean Startup

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The Foundation of Lean Startup

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The Lean Startup Process

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ExperimentsBrainstorm here. When you’re ready, pull it over to the right to start your experiment.

Customer

Problem

Solution

Result &Decision

Learning

RiskiestAssumption

SuccessCriterion

1 2 3 4 5

To form a Customer/Problem Hypothesis:I believe my customer has a problem achieving this goal.

To form your Assumptions:0U�VYKLY�MVY�̸hypothesis to be true, assumption needs to be true. Determine how you will test it:The least expensive way to test my assumption is...

Who is your customer?

What is the problem? Phrase it from your customer’s perspective.

+LÄUL�[OL�ZVS\[PVU�VUS`�HM[LY�`V\�OH]L�]HSPKH[LK�H�WYVISLT�^VY[O�ZVS]PUN�

What are the assumptions that must hold true, for your hypothesis to be true?

Need help? Use these sentences to help construct your experiment.

To form a Problem/Solution Hypothesis:I believe this solution will resultin X\HU[PÄHISL�V\[JVTL.

To identify your Riskiest Assumption:The assumption with the leastamount of data, and core to the viability of my hypothesis is...

Determine what success looks like:I will run experiment with # of customers and expect a strong signal from # of customers.

Project Name: Team Leader Name:

GET OUT OF THE BUILDING!

ExperimentsStart here. Brainstorm with stickies, pull it over to the right to start your experiment.

Customer

Problem

Solution

Result &Decision

Learning

RiskiestAssumption

SuccessCriterion

1 2 3 4 5

To form a Customer/Problem Hypothesis:I believe my customer has a problem achieving this goal.

To form your Assumptions:0U�VYKLY�MVY�̸hypothesis to be true, assumption needs to be true. Determine how you will test it:The least expensive way to test my assumption is...

Who is your customer? Time Limit: 5 Min People buying Vespas on Craigslist

People with KPMÄJ\S[�commute NYC

Relying on products that useoil

Understandingsafety & timesaving ofVespa

People with KPMÄJ\S[�commute NYC

Vespa tooexpensivefor identityrisk

Vespa One-Pager +Trial

Rent Vespa& Return ItIf Not Fit

No friendsVespa

Pay $250/month

INTERVIEW:8/10 don’thave friendwith Vespa

SELL:15 emailaddressesin 2 hours

Care about environment

INTERVIEW: 5/20 buying Vespa bcenvironmentimportant

0/20

PIVOT!

5/10

PIVOT!

50+ in 2 hours

PERSEVERE!

- Skinny Tie!- Buying for lifestyle

- “I’m not a scooter person”- Lifestyle is a risk

- People typing in ALL CAPS- Jumping out of seat to try

What is the problem? Phrase it from your customer’s perspective. Time Limit: 5 Min

+LÄUL�[OL�ZVS\[PVU�VUS`�HM[LY�`V\�OH]L�]HSPKH[LK�H�WYVISLT�^VY[O�ZVS]PUN���������Time Limit: 5 Min

List the assumptions that must hold true, for your hypothesis to be true. Time Limit: 10 Min

Need help? Use these sentences to help construct your experiment.

To form a Problem/Solution Hypothesis:I believe this solution will resultin X\HU[PÄHISL�V\[JVTL.

To identify your Riskiest Assumption:The assumption with the leastamount of data, and core to the viability of my hypothesis is...

Determine what success looks like:I will run experiment with # of customers and expect a strong signal from # of customers.

Project Name: Team Leader Name:

GET OUT OF THE BUILDING!

ExperimentsStart here. Brainstorm with stickies, pull it over to the right to start your experiment.

Customer

Problem

Solution

Result &Decision

Learning

RiskiestAssumption

SuccessCriterion

1 2 3 4 5

To form a Customer/Problem Hypothesis:I believe my customer has a problem achieving this goal.

To form your Assumptions:0U�VYKLY�MVY�̸hypothesis to be true, assumption needs to be true. Determine how you will test it:The least expensive way to test my assumption is...

Who is your customer? Time Limit: 5 Min

What is the problem? Phrase it from your customer’s perspective. Time Limit: 5 Min

+LÄUL�[OL�ZVS\[PVU�VUS`�HM[LY�`V\�OH]L�]HSPKH[LK�H�WYVISLT�^VY[O�ZVS]PUN���������Time Limit: 5 Min

List the assumptions that must hold true, for your hypothesis to be true. Time Limit: 10 Min

Need help? Use these sentences to help construct your experiment.

To form a Problem/Solution Hypothesis:I believe this solution will resultin X\HU[PÄHISL�V\[JVTL.

To identify your Riskiest Assumption:The assumption with the leastamount of data, and core to the viability of my hypothesis is...

Determine what success looks like:I will run experiment with # of customers and expect a strong signal from # of customers.

Project Name: Team Leader Name:

GET OUT OF THE BUILDING!

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STEP 1: Who is the customer?

!

Define Your Customer Hypothesis

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CUSTOMER@hungvpham

STEP 2: What is her problem?

!

Define Your Problem Hypothesis

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PROBLEM• Must be specific to the person!!

INCORRECT: • “People are not recycling” is not a problem someone has!

CORRECT: • “Forgets the day of the week for collection”• “Confused how to sort plastics”!

• Two similar but different problems

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SOLUTION

Do not define until the problem is validated!

Why? Because every problem has multiple solutions

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STEP 3: What do you test?

!

Plan your Experiment (MVP)

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Minimum Viable Product! Test your riskiest assumption

MVP != Shitty ProductThe Minimum Viable Product (MVP) is that version of a new product which allows a team to collect the maximum validated amount of learning about customers with the least effort.

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What must we learn?

What are the Core Assumptions of our business?!

Assumption: A behavior, mentality, or action that needs to happen in order for hypothesis to be true.

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What must we learn?

Prioritize: Which Assumption is the Riskiest?!

The one that is most unknown, and crucial to the business

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What do we build to test?

1.Exploration -> reproduce problem2.Pitch -> collect currency3.Concierge -> deliver customer

expectation!

(Methods increase in cost of testing)

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How do we measure result?

Decide on the weakest outcome you will accept as validation!

Called the Minimum Success Criterion

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SHOW ME THE MONEY!

Examples of Customer Validation: 5,000 Email Signups OR $1,000 in Cash OR 5 Contracts from Big Companies

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STEP 4?

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GET OUT OF THE

BUILDING!

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STEP 5: What did you learn?

!

Analyze Results

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What happened?VALIDATED Brainstorm and test next RA(NOTE: if you validate with the wrong customers, it is not validated)!

INVALIDATED Pivot the hypothesis

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