Lean Startup: Insider's Story

Lean Start-upInsider’s Story

http://squeek.ru

Bayram Annakov Oleg Parinovcrazy CEO JDI Project Manager

WTF is lean?

WTF is start-up?

WTF = wikipedia to fools

Lean Startup is a concept coined (and trademarked) by Eric Ries. Ries writes that lean startups are born out of the following three trends:

1. use of free and open source software,

2. application of agile software development methods, and

3. ferocious customer-centric rapid iteration, as exemplified by the Customer Development process[1].

Lean Startup initially advocates the creation of rapid prototypes designed to test market assumptions, and uses customer feedback to evolve them much faster than via more traditional software

engineering practices, such as the Waterfall model. It is not uncommon to see Lean Startups release new code to production multiple times a day[2], often using a practice known as Continuous

Deployment[3].

According to the New York Times, "The term 'lean start-up' was coined by Mr. Ries, 31, an engineer, entrepreneur and blogger. His inspiration, he says, was the lean manufacturing process, fine-

tuned in Japanese factories decades ago and focused on eliminating any work or investment that doesnʼt produce value for customers." [4]

Lean Startup is sometimes described as Lean Thinking applied to the entrepreneurial process[5]. A central tenet of Lean Thinking is to reduce waste. Lean Startup processes reduce waste by

increasing the frequency of contact with real customers, therefore testing and avoiding incorrect market assumptions as early as possible[6]. This approach attempts to improve on historical

entrepreneurial tactics by reducing the work required to assess assumptions about the market, and to decrease the time it takes a business to find market traction. This is referred to as Minimum

Viable Product.

In The Entrepreneur's Guide to Customer Development, Brant Cooper and Patrick Vlaskovits add a fourth element, and that is the use of powerful, low-cost and easy-to-use analytics. While some

characteristics of lean startups have been practiced for years, the confluence of these trends is a recent phenomenon and offers the potential for unprecedented "speed of iteration" or "number of

learning cycles per dollar" as business hones in on product-market fit[7].

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Our story

Nov 2010

Mobile Ad

Mobile Ad

Developer Advertiser

Advertising Network

PrototypeFeb

2011

Two-sided market

Developer Advertiser

more...

more...

Others

Insight #1

Focus

Focus on developers

We need a success story

Mar 2011

Change of plans!

Change of plans!

- security systems

Change of plans!

- security systems

- online project management

Change of plans!

- security systems

- online project management

- first personal computers

Change of plans!

- security systems

- online project management

- first personal computers

- collection of links to research papers

Change of plans!

- security systems

- online project management

- first personal computers

- collection of links to research papers

- online game

Change of plans!

- security systems

- online project management

- first personal computers

- collection of links to research papers

- online game

- printer drivers

Squeek

Apr 2011 Get in touch with people nearby

•Group messaging•Location-based•Simple!•and no ads...

Insight #2

Understand your

market

First user testing

Apr 2011

Be closer to user

First user testing

Apr 2011

Be closer to a user

What is happening?

May 2011

How many people?

What are they doing?

What is the cost of ad campaigns?

Key Performance Indicators (KPI)

Customers (users)funnelVisited the site

Downloaded the app

Opened the app

Wrote the first message

Visited more than once

iPhone users

Customers acquisition

Visited the site

Downloaded the app

Opened the app

Wrote the first message

Visited more than once

iPhone users

Retention

Visited the site

Downloaded the app

Opened the app

Wrote the first message

Visited more than once

iPhone users

next steps in counting

• lifetime value of a customer (LTC)

• crash rate

• revenue/acquisition cost

Insight #3

Count everything and double-check

There is no product feature without counting

«Zero problem»

May 2011

People need people to talk to

Tactics

Feel free not to choose

Push notifications

Invite

Insight #4: Strategy thinking

Why realtime?

June 2011

Action items

Flexibility

Market

Changes

Fails

Tools for flexibility

• Mock-ups and prototypes

• A/B testing

• Business models

Mock-ups

• Mock Flow

• Simple Diagrams

• Post-its

A/B testing

Hard to decide? Test both!

A/B for e-mail

Business model

Lean Start-up

idea

prototype

test

idea

• brainstorm

• self-usage

• ask!

prototype

• developing new product

• adding new feature

• can we test our idea without implementing?

test

• give it to the market

• take data how the customers use the feature (what indicators?)

• decide the necessity of the feature

example: share button

Idea: let the users share the room to their friends

Prototype: share button to facebook or vkontakte wall, to twitter or via email

Test: nobody uses the button

example: topicsIdea: people need topics for discussion

Prototype: creating rooms for different topics

Test: how many people discussed topics

Decision: let’s create topics

the number of messages per day

Next step for topics

• How we can test without implementing and waiting?

• We have got Squeek - a dolphin bot

• Let the bot give the topic (or ask about it)

• How can we evaluate the result?

Summary

• Be flexible

• Test your ideas on the market

• Analyze the data

• and...

and... love your product!

thanks

http://squeek.ru