Running Lean

RUNNING LEAN

A systematic process for iterating your web

application from Plan A to a plan that works

ASH MAURYA@ashmaurya

http://www.ashmaurya.com

Thursday, November 4, 2010

The sad statistics of Plan A.

9/10 startups fail

66% drastically change their original plans

Not a better Plan A. But a path to a plan that works.

Running Lean is a systematic process for iteratingfrom Plan A to a plan that works.

Agenda

1. What is Running Lean?2. What does a Lean Startup look like?3. How can you use Lean to define and measure progress?

Agenda

About Me

Practice Trumps Theory

What is Running Lean

Customer Development +

Lean Startup +

Bootstrapping

Requirements ReleaseDevelopment QA

Customer Development

Some learning

Some learning Most learning happens here

Some learning

Very little learning

Most learning happens here

A synthesis of Customer Development, Agile, and Lean Thinking.

Lean Startup

Funding with customer revenue.

Bootstrapping

Startups that succeed are those that manage to iterateenough times before running out of resources.

- Eric Ries

Get out of the building.

- Steve Blank

Learning

Right Action, Right Time.

- Bijoy Goswami

Speed, Learning, Focus.

There are no silver bullets

Agenda

1. Document your Plan A2. Systematically Test your Plan A

There is an “I” in Vision

Smart people can rationalize anything.

Business Model vs Business Plan

A document investors make you write that they don’t read

A single diagram of your business

Problem

Top 3 problems

Solution

Top 3 features

Unique Value Proposition

Single, clear, compelling message that states why you are different and worth buying

Unfair Advantage

Can’t be easily copied or bought

Customer Segments

Target customers

Problem

Top 3 problems

Key Activity

Activity that drives retention/revenue

Single, clear, compelling message that states why you are different and worth buying Channels

Path to customers

Customer Segments

Target customers

Cost Structure

Customer Acquisition CostsDistribution CostsHostingPeople, etc.

Cost Structure

Revenue Streams

Revenue ModelLife Time ValueRevenue Gross Margin

Revenue Streams

The 3 Stages of a Startup

Problem/Solution Fit

Product/Market Fit

Validate Problem/Solution Fit

Product/Market Fit

Do I have a problem worth solving?

Problem

Top 3 problems

Solution

Top 3 features

Unfair Advantage

Customer Segments

Target customers

Problem

Top 3 problems

Key Activity

Path to customers

Customer Segments

Target customers

Cost Structure

Revenue Streams

Achieve Product/Market Fit

Have I built something people want?

Product/Market Fit

Some learning

Very little learning

Most learning happens here

Requirements Release

Customer Discovery

Customer Validation

ContinuousDeployment

Problem

Top 3 problems

Solution

Top 3 features

Unfair Advantage

Customer Segments

Target customers

Problem

Top 3 problems

Key Activity

Path to customers

Customer Segments

Target customers

Cost Structure

Revenue Streams

Optimize for Scale

How do I accelerate growth?

Product/Market Fit

Problem

Top 3 problems

Solution

Top 3 features

Unfair Advantage

Customer Segments

Target customers

Problem

Top 3 problems

Key Activity

Path to customers

Customer Segments

Target customers

Cost Structure

Revenue Streams

Before Product/Market Fit

Validated Learning

Pivots

Product/Market Fit

After Product/Market Fit

Growth

Optimizations

Validated Learning

Pivots

Product/Market Fit

Agenda

Not just limited to code

Speed, Learning, Focus.

How to build a validated learning loop

1. Formulate falsifiable hypotheses2. Time-box experiments3. Validate Qualitatively, Verify Quantitatively4. Create accessible dashboards5. Communicate learning early and often

Problem

Top 3 problems

Solution

Top 3 features

Unfair Advantage

Customer Segments

Target customers

Problem

Top 3 problems

Key Activity

Path to customers

Customer Segments

Target customers

Cost Structure

Revenue Streams

Leap of Faith: Being known as an “expert” will drive early adopters

Hypothesis: Blog post will drive >100 early sign-ups

Time is more valuable than money.

Qualitative Quantitative

Start here Verify with data

Words matter

Images matter

We thought (Hypotheses):

Our Customers told us (Insights):

Next Steps (Future Experiments):0

Jan Feb Mar Apr May June July

• Personal Authority would be a viable channel to early adopters• Customers would vote the problem as “must-have”• Customers would pay $49/mo

• Most early adopters did come through blog and twitter• Customers voted #3 problem as “must-have”. Others as nice-to-have• $49/mo works for customers with early traction

• Test MVP based on “must-have” problem• Test a “Free” model

Results from last iteration

Not a better Plan A. But a path to a plan that works.

Thanks!Ash Mauryatwitter: ashmauryablog: http://www.ashmaurya.com

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