Using the Lean Startup Method for an Internet Broker in ... · Taking notes Interviews Analyse data...

Fakultät für Informatik

Technische Universität München

Using the Lean Startup Method for an

Internet Broker in the Recycling Industry Master Thesis

1 2013-12-02 – Stefan Weymann – Using the lean startup method for an internet broker in the recycling industry © sebis

Editor: Stefan Weymann

Supervisor: Prof. Dr. Florian Matthes

Chair: Prof. Dr. Isabell M. Welpe

Motivation

© sebis 2013-12-02 – Stefan Weymann – Using the lean startup method for an internet broker in

the recycling industry 2

Development of Google Search for the term Lean Startup

Source: Google Trends

A new method of how to start a business is coming…

Research Question

What is the Lean Startup method and how does it contribute/hinder a new

venture?

© sebis 2013-12-02 – Stefan Weymann – Using the lean startup method for an internet broker in

the recycling industry 3

How does the lean startup method contribute to :

Positive effects No effect Negative effects

Agenda

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1. Lean Startup Method

2. Participant Observation

3. Case Study

4. Findings

5. Outlook

A Startup is a human institution designed to create a new product or service

under conditions of extreme uncertainty. (by Eric Ries 2011)

Lean Startup Method

© sebis 2013-12-02 – Stefan Weymann – Using the lean startup method for an internet broker in the recycling industry 5

The minimal viable product (MVP) is that version of a new product which allows a

team to collect the maximum amount of validated learning about customers with the

least effort. (Ries, 2011)

Lean Startup Method

© sebis 2013-12-02 – Stefan Weymann – Using the lean startup method for an internet broker in

the recycling industry 6

Build

Measure Learn

Build-Measure-Learn loop by Eric Ries

2011

Build-Measure-Learn Loop

Lean Startup Method

© sebis 2013-12-02 – Stefan Weymann – Using the lean startup method for an internet broker in

the recycling industry 7

Hypothesis-Driven-Entrepreneurship (by

Eisenmann, Ries and Dillard 2013)

Participant observation is a research method used for studying groups, programs,

or organizations, formal and informal, ranging in size from several participants to

large-scale organizations. (Kurz, 1984)

Stages of doing participant observation

1. Preparation

2. Choosing the observer role

3. Entering the setting

4. Doing the research

Taking notes

Interviews

Analyse data

Participant observation

© sebis 2013-12-02 – Stefan Weymann – Using the lean startup method for an internet broker in

the recycling industry 8

Case Introduction

© sebis 2013-12-02 – Stefan Weymann – Using the lean startup method for an internet broker in

the recycling industry 9

Schrott-Deal UG (haftungsbeschränkt)

Date of foundation: 2013-06-06

Purpose:

1. Investigate the use of the lean startup concept

2. Test the business idea

3. Start a new business

Hesham Ghandour Savas Hobelsberger Stefan Weymann

About Student Computer

Science

Manager at a

recycling retailer

Student TUM-BWL

Responsibilities CTO COO CEO

Case - Team

© sebis 2013-12-02 – Stefan Weymann – Using the lean startup method for an internet broker in the recycling industry 10

Case Lean Startup Approach

© sebis 2013-12-02 – Stefan Weymann – Using the lean startup method for an internet broker in

the recycling industry 11

Hypothesis-Driven-Entrepreneurship (by

Eisenmann, Ries and Dillard 2013)

Case – Set vision

© sebis 2013-12-02 – Stefan Weymann – Using the lean startup method for an internet broker in the recycling industry 12

Consumer

Recycling retailer

Recycling wholesaler

Metal factory

Producer

Where we come in

Producer Wholesaler/Retailer Consumer

Recycling industry Retail industry

Broker/ Affiliates

Case - MVP

© sebis 2013-12-02 – Stefan Weymann – Using the lean startup method for an internet broker in

the recycling industry 13

Do people use the service?

Iteration 1

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the recycling industry 14

• Two orders within the first

week

• Around 100 orders at end of

November

Iteration 2

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the recycling industry 15

Where to ask for the phone number in the purchase funnel?

0

5

10

15

20

25

30

7.4

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7.6

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Next Button/Orders

next button

order

Ask for the phone

number in step one

I3: Which products are requested from customers?

I4: Which prices are accepted by the customers?

I5: Which website design brings better conversions?

I6: How should the order handling tool looks like?

I7: How can marketing expenses be reduced?

I8: Can the business model be scaled to other cities?

Iterations 3 to 8

© sebis 2013-12-02 – Stefan Weymann – Using the lean startup method for an internet broker in

the recycling industry 16

Findings

© sebis 2013-12-02 – Stefan Weymann – Using the lean startup method for an internet broker in

the recycling industry 17

How does the lean startup method contribute to :

Positive effect Neutral Negative effect

- Answers questions

which are difficult to

find out

- Brings new insights

early

- Fast evaluation of the

business idea

- Legal questions - Most VCs still want to

have a business plan

- Some founding

programs require to

apply before starting

Start:

15.06.3013

Inaugural presentation: 22.07.2013

Final presentation: 02.12.2013

End:16.12.2013

Outlook

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the recycling industry 18

Questions

© sebis 2013-12-02 – Stefan Weymann – Using the lean startup method for an internet broker in the recycling industry 19

Stefan Weymann

weymann.stefan@gmail.com

www.schrott-deal.de

Sources

© sebis 2013-12-02 – Stefan Weymann – Using the lean startup method for an internet broker in the recycling industry 20

Ries, E. (2011). The Lean Startup. New York: Crown Editors.

Eisenmann, T., Ries, E., & Dillard, S. (2013). Hypothesis-Driven

Entrepreneurship : The Lean Startup. Harvard Business Review, 1–26.

Kurz, D. E. (1984). THE USE OF PARTICIPANT OBSERVATION IN

EVALUATION RESEARCH, 6, 93–102.

Backup

© sebis 2013-12-02 – Stefan Weymann – Using the lean startup method for an internet broker in

the recycling industry 21

SEA / Google AdWords

© sebis 2013-12-02 – Stefan Weymann – Using the lean startup method for an internet broker in

the recycling industry 22

• Connect with Google Analytics

• Keyword Planner

• Local campaign

• Day limit

• Max CPC Vs. CPC

• Call us: 0800- 589- 4011

Product development

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the recycling industry 23

7.4.13 7.11.13 7.18.13 7.25.13 8.1.13 8.8.13 8.15.13 8.22.13 8.29.13 9.5.13 9.12.13 9.19.13 9.26.13 10.3.13 10.10.1310.17.1310.24.13

Besu

ch

er

Eindeutige Besucher

1 2 3 4 5 6 Phase

Phase 1

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the recycling industry 24

Learnings:

• User visit the site and customer use the service

• Customer interact via telephone and not as estimated over the web formula

• Internal processes do not work so far

7.4.13 7.5.13 7.6.13 7.7.13 7.8.13 7.9.13 7.10.13 7.11.13

Eu

ro

Besucher

Besucher

Eindeutige Besucher

Adword-Klicks

Phase 2

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the recycling industry 25

Eu

ro

Verhältnis Werbekosten zu Umsatz

Kosten kummuliert

Umsatz kummuliert

Learnings:

• Traffic from SEA is expensive need for SEO

• Weekends do not generate any queries stop SEA on the weekends

SEO

On page vs. Off page Optimization

Google Webmaster Tools

Crawling errors

Search requests

Links to your website

SEO / Google Webmaster Tools

© sebis 2013-12-02 – Stefan Weymann – Using the lean startup method for an internet broker in

the recycling industry 26

Phase 3

© sebis 2013-12-02 – Stefan Weymann – Using the lean startup method for an internet broker in

the recycling industry 27

Implementation of the new CRM Tool

Phase 3

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the recycling industry 28

7.4

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Au

fträ

ge

Weiter-Klicks / Aufträge

Weiter-Klicks

Aufträge

Learnings:

• CRM tool needs to be improved

• Customer often leave the form in step 2

• Photo upload function is not used

Phase 4

© sebis 2013-12-02 – Stefan Weymann – Using the lean startup method for an internet broker in

the recycling industry 29

Implementation Phase

Phase 5

© sebis 2013-12-02 – Stefan Weymann – Using the lean startup method for an internet broker in

the recycling industry 30

Eu

ro

SEA

Kosten

Umsatz

SEO

Impression

Klicks

Learnings:

• SEA didn’t run good

• SEO met first goals

How does SEA really works at Google AdWords?

Phase 5

© sebis 2013-12-02 – Stefan Weymann – Using the lean startup method for an internet broker in

the recycling industry 31

Phase 6

© sebis 2013-12-02 – Stefan Weymann – Using the lean startup method for an internet broker in

the recycling industry 32

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Umsatz/Kosten

Kosten

Umsatz

SEA Problem is solved

Outlook

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the recycling industry 33

E-Commerce

© sebis 2013-12-02 – Stefan Weymann – Using the lean startup method for an internet broker in

the recycling industry 34

E-Commerce is the exchange of goods and services with the help of computer and

the internet (by Kumar 2009)

Impression

Clicks

Visits

Conversion