UXSG2014 Workshop (Day 1) - Lean Startup (Bryan Long)

Welcome to

Startup Testing Preview

by The Testing Ground

About me

• Founder of The Testing Ground and Co-Founder of Jumpdesk

• President of the Association of Lean Startups

• Organiser of Singapore Lean Startup Circle

• Mentor at Lean Startup Machine, Startup Leadership Programme, The Scape, Ideasinc, Startup@Singapore, Youth Entrepreneurship Symposium…

• Engineering degree, MBA…and just graduated from NUS law! Woohoo!

Introduction to Lean Startup

Definition of a Lean Startup

Validated Learning as the measure of progress

Customer Development(discover unknown problem and solution)

Lean Product Development e.g. agile dev, design thinking, lean engineering

(create unknown product)

+

From sequential activities …

…to an iterative process

Why Lean Startup?

• Developed by Eric Ries along with Steve Blank in response to all the waste that comes from failed startups.

• They realized that startups are taking too long developing their products only to launch them with no customers wanting to buy.

Lean Startup

A temporary organisation built to search for the answers to what makes a repeatable and scalable business model before running out of resources

A temporaryorganisation built to search for the answers to what makes a repeatable and scalable business model before running out of resources

Lean Startup

Lean = No Waste

No Waste

=

figure out the right thing to build as quickly as possible

No Waste

=

Figure out the right thing to build as quickly as

possible

Waste = Not Figuring Out

Waste = Building Wrong Thing

Waste = Too Slow

Figure Out=

Validated Learning

No waste: figure out the right thing to build as quickly as possible

Lean Startup Concept:

Build-Measure-Learn




= Experiment


Image courtesy William Harris

Lean Startup is about making entrepreneurship into a management science


ValidatedLearning


The Testing Board helps to keep track of your experiments

As quickly as possible=

speed



Traditional Development


Lean Startup

Why? You have more tries

Photo Credit: Roger Smith via Compfight cc 2.0

Lean Startup Concept:

Get out of the Building


“There are no facts

inside your building, so get outside

”

- Steve Blank

Photo Credit: http://www.troll.me/images2/steve-blank/keep-calm-and-get-out-of-the-building.jpg

Testing BoardLevel 101 introduction to conducting Lean Startup

Experiments

State your hypotheses and

assumptions

Build your Experiment

Learn

The Testing Board helps you structure your experiments


assumptions


Learn

Get rid of your biases:

1) State your hypotheses (guesses) and your

assumptions (beliefs)

2) Forces you to take the view that your startup will

fail


assumptions


Learn

Provides Focus and Clarity

1) Know what you are building to test and

how you are going to do it

2) Know what signal the customers must give

you


assumptions


Learn

Gives you the basis for the

changes you are going to make to

your business model

Your potential customer:Your Early-vangelists

aka Cookie Monster:

You can’t reach out to everyone•So break up a large customer segment into smaller ones

•“Characters living on Sesame Street”• Big Bird• Elmo• Cookie Monster!!

WHAT ARE PROBLEMS?

•Specific to the Customers• “People have difficulty with transportation” is not specific

•“Motorists don’t know when is the best time to avoid a jam” is a problem

WHAT ARE PROBLEMS?

•A problem is when a customer has:•Difficulty doing a task•Difficulty having a desire or needmet

•…in a particular situation

TYPES OF PROBLEMS

Doing a Task Getting a Need or Desire Met

Selling somethingin a hurry

Highest Pricewhen broke

Finding a Datewhen you are bald

Marrying the right spousewhen very few choices are left

Buying a carfor the first time

Status recognitionwhen people are comparing

18 TO 22 YEAR OLD UNIVERSITY STUDENTS

DIFFICULTY FINDING FOOD AT NIGHT FOR

A PARTY

These are only your guesses! SO DON’T ARGUE WITH EACH

OTHER

Assumptions

•What do you believe is true so that your customer or problem hypothesis is true?

Assumptions

•Two ways to figuring out assumptions:

•Explaining the hypothesis•Failing the hypothesis

Assumptions

Explain the Hypothesis

Assumptions

We believe [CUSTOMER]Has this [PROBLEM

Because[reason 1][reason 2][reason 3]

Assumptions

We believe [CUSTOMER]Has this [PROBLEM

Because[reason 1] = Assumption[reason 2] = Assumption[reason 3] = Assumption

Assumptions

Force your startup to fail

Assumptions

• My startup helping busy working women with

their difficulty in finding cheap healthy food will

fail because

Assumptions

• My startup helping busy working women with

their difficulty in finding cheap healthy food will

fail because

• They don’t care about their health

• Someone else is cooking food for them

• They already find it easy to use google

AssumptionsWhat would kill my startup idea

Therefore I am assuming that

They don’t care about their health

They care about their health

Someone else is cooking food for them

No one else is cooking food for them

They already find it easy to use google

They don’t find googling for cheap food easy

Listing Assumptions

•VERY IMPORTANT

•Forces you to face your cognitive biases (remember the blind man in a hotel?)

Riskiest Assumption

Very Uncertain

Very Certain

Big Impact If Wrong

Small Impact If Wrong

18 TO 22 YEAR OLD UNIVERSITY STUDENTS

DIFFICULTY FINDING FOOD AT NIGHT FOR

A PARTY

THIS IS WHAT YOU BELIEVE IS TRUE ABOUT

YOUR BELIEF

STUDENTS ORGANISE

PARTIES AT THE LAST MINUTE

NO FOOD PLACES ON

CAMPUS

Minimum Viable Interaction• What is the smallest interaction you can

have with the customer to validate your riskiest assumption?

For now, it’s just a simple face to face interview

Customer Acquisition Strategy• How are you going to get the customers to

carry out the MVI?

• E.g.• Facebook invitation• Networking events• Referrals

For now, it’s just a simple “get out of the building” to talk to people off the streets

Experiment Steps• Forces you to state what you need to do and to time box

it• Creates

• Focus• Urgency• Common understanding between team members

For now, just state1) Prepare interview questions (15 minutes)2) Get out of the building for 2 hours3) Find customers at 5 star hotels. 2 customers/30 minutes4) Team member 1 go to Hotel A. Member 2 go to Hotel B ….

Success Criteria• What kind of signal are you expecting so that you

have confidence to proceed?

Example:

I expect that 8 out of 10 university students have difficulty finding food at night for their last minute party because there are no food places on campus opened at night

Would you put your money down based on that signal?

Problem Interviews

Interviews are not surveys

Interviews are not sales pitches

This is what we want

It’s about you learning from the customer the real truth…

…even when it hurts to hear it

It’s about letting the customers talk to you

…and you listening

http://www.wikihow.com/React-to-an-Ugly-Baby

Big Steps

• Build• Hypotheses

• Form your Questions

• Finding prospects

• Measure• Carry out interviews

• Learn• Consolidate learning and patterns

let’s work now on your questions

Testing a problem: The Mum Test (coined by Rob Fitzpatrick)

Can you ask questions such that even your mother won’t be able to lie to you?

Carrying out The Mum Test

Talk about their life instead of your idea

• Otherwise Mum will always listen to you talk


Ask about specifics in the past instead of generics or opinions about the future

• Mum will always say what you want to hear or cover up discouraging words with generic words

• “Tell me about the last time the problem happened”

• “What did you do?”


Talk less and listen more

“Mum, that’s interesting…tell me more…”

Things to look out for

• Too many closed-end questions• Only use them for qualifying.

• Start questions with What, Who, Why, When and How

Things to look out for

• Avoid bad data by anchoring Fluff• Fluff

• Generic claims (I usually, I always, I never)

• Future-tense promises (I would, I will)

• Dealing with Fluff• Ask them to bring you to specifics in the past

• When it last happened and how they solved it.

• Avoid “would you ever” questions

Do interviews in your team

• One asks questions. The others writes down answers and think about how to improve

• Change to another team member for each new customer

Learning from the

Experiment

Result and Decision

• Result = What did you actually get?• 12/16 have the problem

• Decision:• Persevere: Pass success criterion. Move to

next stage• Pivot: Did not pass success criterion.

Repeat with a change in strategy• Iterate: Data not enough. Repeat the

experiment with more data points.

Pattern

Insight

Insight

Learning

• What other customer insights did you get?

• Alternatives

• Behaviours

• Competitors

• Mentality

• Bigger problems to solve

All about Pivoting

Building the Right thing =

the thing customers want and will pay for


But what do you do when you learn that the problem

you wanted to solve isnot a problem?


Lean Startup Concept :

Pivoting


Pivoting=

A change in your business model without a change in

vision

based on validated learning


Group Action For Changing The World

Group Action For Buying Cheaper Stuff

Pivot

The key to pivoting is thus your vision

Product = Vision

Product = Vision

Big Vision

Problem 1

Product 1

Product 2

Problem 2

Product 3

Product 4

Problem 3 Product 5

Types of Pivots

Zoom-In PivotA single feature become the whole product

E.g. From Electric Car to just Electric Car Batteries

Zoom-Out PivotA whole product becomes a single feature of a much

larger product

E.g. Galaxy Note – Walcom Digitizer

Customer Segment Pivot

Attracted real customers…but not the original ones

Customer Problem/Need Pivot

Original problem not big enough but another problem is bigger for that customer segment

Put Customer and Problem Together

How you are going to solve the problem

Solution versus

Product

A is how

you are going to

solve the key

problem the

customer is facing

A is what

you are using to

solve the key

problem the

customer is facing

A focuses

on the customers

and about the

benefits they

receive

A focuses

on the features

which customers

use to get the

benefits

A can

have be made up

of many products

A may not

be a solution

A can be

described with

just words for

customers to give

you feedback

A is hard

to describe and is

better experienced

before the

customer can give

you feedback

Problem: Commuters spend a

lot of time waiting for buses

Solution: Information about

bus arrival time

Products:

1) Bus arrival guide

2) SMS about bus arrival

3) App with real time

information based on GPS



Solution: Share a cab service

Products:

1) Online booking

2) Call a telephone operator

3) Booking app



Solution: Tell you when to

leave work to avoid crowd

Products:

1) Whatsapp group

2) Blog

3) Phonecall

So it’s more important to

think about the solution

first.

Then you build a

Minimum Viable Product

to test the solution with

the Customers

Building a

Successful MVP

What is an MVP?

“The minimum amount of effort you have to

do to complete exactly one turn of the

Build-Measure-Learn feedback loop.”- Eric Ries

In Simpler Terms

The MVP is the fastest way to achieve

learning about the customer with the least

effort

Pre-selling MVP

Exchange of product for some form of

currency: time, money, information or work.

Tests the Riskiest Assumption associated

with your Solution Hypothesis.

Product Pitch

One easy way to do

the pre-selling MVP…

Landing Pages

Determine if the problem resonates enough

with the customer that they will give up

currency

Landing

Page

Offline

Landing

Page

Storyboard

of problem

areas

Pre-selling MVI – What Do You

Want to Get?

* Cash $$$

* Letter of Intent

* Email Addresses

* Pay With a Tweet

* Taking a Meeting

* Time

CURRENCY

PERSONAL INFORMATION

- Email Address

- Mobile Number

WORK

- Effort to make an

appointment to meet me

- Time spent for the

meeting

131

Lean Startup is a like a straight ruler

Measure of Success

Time

Failure without Lean

Failure with Lean

Measure of Success

Time

Small FailuresBut Learning Quickly

= Changes in Strategy without Change in Vision

= Pivoting

Finding Product-Market Fit

Getting to Success

Small FailuresBut Still Learning Quickly

But beware,

Lean Startup can be a

bit confusing

Strategy Level

Tactical Level

Product Level

o For Seed Stage Startupso 20 –Day Programme to develop your customer

development skillso Includes the use of a space at Orchard Roado Helps you answer three important questions at the end:

Is the problem worth solving?

Does any one want your solution?

Do you want to do it?

o Get the focuso Comes with a 150 page guidebook and Startup Testing Boardso 6 hours of face to face workshops together with other startups in the

regiono Mentoring with lead mentors and participant mentors

o Save moneyo Get access to Powtoonso Your own url shortenero Landing page creatorso Comes with the use of TTG

o Join a communityo Member of Association of Lean Startupso Alumni of TTG

Join us at

www.thetestingground.asia

Small Business & Entrepreneurship

UXSG2014 Workshop (Day 1) - Lean Startup (Bryan Long)