A Startup is A THESIS

Tendayi Viki, PhDUniversity of Kent

Follow Me: @tendayiviki

Lean Startup Machine Rotterdam

About Me:

Academic: @unikent

4 failed startups: Tasksauce

Currently: Valideation

The Challenge 

Most new businesses fail. In some cases failure rates are

over 90%.

Previous success does not guarantee future success (Frankish et al., 2012).

Entrepreneurs don’t really learn, they just say they do!

http://ow.ly/eR6Uh

This can be problematic:

Because it places too much emphasis on the value of the initial idea.  

Most new business ideas suck!

Including the initial ideas within many companies that are successful overtime.

Great entrepreneurs are comfortable with “killing their babies”…

And pivoting to new ideas….

Startups also fail because they try to act like a large company too early.

Startups are not smaller versions of

big companies! (Steve Blank & Bob Dorf, 2012)

Startups are more like frogs than fish.

Rob Fitzpatrick and Salim Virani

(2012)

No two startup situations are the same…(Even in the same market as another company)

What do you do, when you are in a cargo cult:

And the plane lands?!

Rob Fitzpatrick and Salim Virani (2012)http://www.foundercentric.com/

Each startup situation has its own topography….

And it’s a great challenge to business plan for that…

A Startup is A Thesis 

A Path for Searching:

For a sustainable and profitable business model…

A Startup is a Research Project:

So we don’t write a business plan, we should write a research proposal…

The Startup Team is a Research Team:

All hands on deck, to learn what customers want…

And a sustainable/profitable way to deliver that value to them….

A Significant Contribution:

The significant contribution of a startup is building something people want…

Upon achieving product-market fit, a startup graduates…

The Lean Startup approach is not anti-planning!

But the plan is to learn…

And use tools that allow us to learn from customers quickly…

.

Eric Ries (2011) The Lean Startup

http://lean.st

This is not the same as market research or focus groups!  

Introspection

◦Market research methods are based on one major premise: If you want people to tell you

what they think, just ask them!

Introspection

◦This premise is based on one major problematic assumption: People are able to introspect

and gain access into how they feel and communicate it to researchers.

Introspection

People often don’t know what drives their thoughts and actions.

◦ But if you ask them, they often have something to say.

◦ Psychologists call this confabulation.

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To Fully Understand Your Customers You Have to

GoBeyond the Focus Group

Running Successful Experiments

Document your Plan A Who are the customers? What problems do they have? What solution are you

proposing?

Ash Maurya (2012)Running Lean

http://www.runningleanhq.com/

Alexander Osterwalder (2012)http://www.businessmodelgeneration.com/

Identify your riskiest assumptions. Transform these into falsifiable

hypotheses. This means you have to

operationalize your assumptions.◦Say what exact behaviour you are

assuming your customer will show.

Running Successful Experiments

In science, the power of an experiment is that:

It controls for potentially confounding factors and variables.

Specify who you are going to be talking to from the beginning.◦Be specific about your target sample.

If you talk to anyone who will talk to you: ◦It becomes hard to distinguish signal from

noise.

Running Successful Experiments

Specify exactly what you would expect to find if your assumptions are correct.

◦Set minimum success criteria

Otherwise, there is no way to know if you have learned anything.

Running Successful Experiments

Capture reliable data. Do not try to fudge the data.Avoid the confirmation bias.

Running Successful Experiments

The hypothesis/objective you are trying to learn.

from the target market segment you are trying to learn about

and the form it takes to achieve that learning.

Patrick Vlaskovitz (2012)

http://vlaskovits.com/2012/09/apple-maps-debacle-and-minimum-viable-products/

A Great MVP

THANK YOU