Lean Startup: A Brief Introduction

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Lean Startup A Brief Introduction

Objectives
By the end of this presentation, you will understand:
• The basic principles of the Lean Startup method,
• How to apply it to your business development project,
and
• Why it’s important to the success of your business
innovation.
You will also learn a technique for quickly and
inexpensively testing the most important assumption
of your business model: whether or not your business
idea is addressing a problem people are willing to
spend money on to solve.

Lean Startup Basics

9/10startups fail.
biz dev initiatives
Is this necessary?

“Our research is
unequivocal:
persistently high
innovation failure
rates are not an
immutable law of
nature.”

e
A systematic process for reducing
the risk that a new business
development initiative will fail.
len start p
Lean Startup

Why do most
biz dev initiatives
fail?

Creating a new
business is like
solving a complex
puzzle.

In unsuccessful business development initiatives,
the resources run out before the puzzle is solved.

Thus the “lean” in lean startup.

Going after the wrong customer Solving the wrong problem
Building the wrong
product or more
features than
necessary
Charging the wrong
person & monetizing
the wrong thing
Using the wrong
marketing channels &
tactics
Hiring the wrong
people
Investing in the wrong
resources /
partnerships
Using the wrong
governance model or
organization
Where’s the waste?

Core Tenets of Lean Startup
1. Acknowledge the uncertainty
2. Articulate your hypotheses
3. Identify & prioritize the risks that are
embedded in these hypotheses
4. Design & execute experiments to
validate or invalidate the hypotheses at
the lowest possible cost
5. Iterate

?
What do we really know?
?
?
???
? ?

Where’s the risk?

Build-Measure-Learn Loop

Key Stages of Lean Startup
STAGE 1
You have
identified an
important
problem
STAGE 2
You have
designed a
solution that
customers
like
STAGE 3
You have
delivered a
solution that
satisfies
customers &
investors
STAGE 4
You have built
the systems &
infrastructure
necessary to
scale
Ideas Biz Concept Product
Offering
Technical
product design
Distribution
partnerships,
staffing plans,
etc.
Product Pitch Deck “Coming Soon”
landing page
Minimum
Viable Product
Partnerships,
etc.
Data Results of ~ 20
“Problem
Interviews” w/
target
customers
Landing page
conversion
metrics
End-to-end
customer
conversion &
retention
metrics
Operational
metrics

Customer Problem Interviews
The quickest & cheapest way to validate (or
invalidate) the riskiest assumption of your
business concept

Background
• For most businesses, the #1 problem is not
building the product, but finding a customer
who is willing to pay for the product.
• Customer Problem Interviews are a specific
technique used by early stage entrepreneurs
to quickly and cheaply validate (or
invalidate) key hypotheses regarding:
– Who is the customer, and
– What is the nature and urgency of the
customer’s problem?

Process Summary
1. Formulate testable hypotheses
2. Script the interview
3. Schedule interviews
4. Conduct interviews
5. Review results & decide what’s next

Formulate Testable Hypotheses
• Who is the customer
– Hypothesis 1: The customer will be businesses with at
least 1 – 10 employees
– Hypothesis 2: The customer will be in the retail industry
sector
– Hypothesis 3: The customer will have been in business
for 5+ years
• What is the nature and urgency of the customer’s
problem
– #1 Problem – Don’t have a plan for growing their
business. Urgency = High
– #2 Problem – Don’t have reliable access to quality
business coaching. Urgency = Medium
– #3 Problem – Lack a network of “peer mentors.” Urgency
= Medium

See Example
Script the Interview

Schedule Interviews
Hi –
This is [your name]. I am one of the leaders of a new startup company that
hopes to [your mission].
We are in the very early stages of our project and have not yet even
developed our product. But before we get too far ahead of ourselves, we
wanted to sit down with the type of people/organizations we envision as
our future customers and make sure we have really understood their
needs.
Would you be willing to sit down with me for a 30-minute conversation to
help me understand your current [workflow, etc.]. I’m not selling anything,
just looking for advice.

Conduct Interviews
1. Check your biases at the door
2. Stick to your script
3. Have a team member present
4. Avoid recording the interview
5. Document the results immediately after

Review & Decide
• Exit criteria for the Problem Interview
Process
– At least 10 completed interviews
– You see a clear pattern of regarding the
customer segment & problem
• Review all your notes
• Update your business concept with your
validated learnings
• Ideate revisions to your business concept as
necessary
• Decide what to do next

Lean Startup: A Brief Introduction

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