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There is a new approach to growing startups popularized by Eric Ries: "Lean Startup". Basic idea is that each startup should be as flexible as possible, should create rapid prototypes and test market assumptions using these prototypes. Flexibility is key to success (or at least to find out that your idea is not that good :-).Bayram and Oleg will explain how this approach is being used in Empatika and will present a real story about Squeek app they developed and marketed. Key topics covered:1. Lean Startup - a new approach to growing startups2. Flexibility is key to success3. Pivots: don't afraid to fail4. Key performance indicators (KPI) for an IT startup6. Lessons Learned and action items.
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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!
