Lean Startup

Introduction
 Inspirations

Customer Development
+ Lean Manufacturing
+ Agile Software Development
___________________________
= Lean Startup
90% of startups fail
Only 4% make it to $1 million turnover
How startups are built?

Start with an idea

☟
Write Business Plan
☟
Raise $$
☟
Build Product
☟
Launch
☟
Marketing
☟
90% chance to fail
No business plan survives first
contact with customers

Steve Blank - godfather of the Lean Startup

 Waterfall Product Development

Requirements

Specifications

Problem: Design
known

Solution:
known Implementation

Verification

Maintenance
Achieving Failure

= Successfully executing a bad plan

On budget, on time, well designed?

“There is nothing so useless as doing

efficiently what should not be done at all.”
Peter Drucker (1909-2005)
 Agile Product Development

“Product Owner” or in-house customer

Problem:
known

Solution:
unknown
 Lean Startup

Problem:
unknown

Solution:
unknown
 Unknown
Lean
Agile
Startup

Solution
(How)
Known

Waterfall

Known Unknown
Problem (What)
Can it be done?
Should it be done?
A startup is a temporary
organization formed to search for a
repeatable and scalable business
model
Steve Blank
 Search Execute
VS

Explore Exploit

Experimenting Planning

Unexpected Discovery Predictable outcome

Test & fail Do not fail

Learn Optimize
 Reactive and not perfect
Adaptability over planning
 Select the riskiest assumption

Learn if your assumption is true

of false

True: move on to the next

riskiest assumption

False: review your hypotheses Build an experience or

MVP to test this
assumption on the market.

Measure customer behaviours

during that experience
You are wasting if you are not learning
Lean Canvas
 Search ☞ Validate ☞ Grow
Problem / Solution Product / Market Scale

Customer Discovery Customer Validation Company Building

Customer/Problem Channels Sales Execution
Solution Growth Engine Scale Organisation
Delivering Value Pricing Scale Operations
Retention Virality, CAC, CLTV Scale Delivery

Quality

Quantity

Problem Solution Concierge Landing Mock MVP Crowd Growth Optimisation

interview interview Page Sales funding Experiment
 Diffusion process

Source: the diffusion process, by Joe M. Bohlen, George M. Beal and Everett M. Rogers, 1957
 Target micro-segment

Source: the diffusion process, by Joe M. Bohlen, George M. Beal and Everett M. Rogers, 1957
 Customer & problem

? ?
A startup is a temporary
organization formed to search for a
repeatable and scalable business
model
Steve Blank
 Turn your hypotheses into facts

Identify the riskiest assumption from

1 your business model.

Design and run an experiment that can

2 prove the hypothesis true or false.

Based on the outcome, pivot or

3 persevere. Go back to step 1.
Iterate
The better you know your customers
the better you can help them
Iain Wallace - 2015
Problem? Need? Pain? Desire?
Think job-to-be-done...
Customer don’t just buy products.
They “hire” them to do a job.

Clayton Christensen
People don’t want to buy a drill.
They want a hole.
Theodore Levitt - 1962
Customer Discovery:

Find a problem worth solving

for your customers
 Customers Discovery
Don’t Do
Survey ● Observation
Questionnaire ● Interview
Focus group ● Role play
Market Study ● Games
Your personal experience
Conversation with friends ☞ Behaviours
 Market study: No need for iPhones in 2007

Question: Conclusions:

“I like the idea of having one “Users not motivated to replace

portable device to fulfill all my their digital cameras, cellphones
needs” and MP3 players with one
device that did everything.”

“No need for a convergent

product in the U.S., Germany
and Japan”

Sources: http://universalmccann.bitecp.com/um_report_pttp_lr3.pdf
http://www.gsb.stanford.edu/news/headlines/itamar-simonson-emanuel-rosen-how-digital-age-rewriting-rule-
book-consumer-behavior
It’s really hard to design products by
focus groups.

A lot of times, people don’t know what

they want until you show it to them.

Steve Jobs
If I had asked people what they wanted,
they would have said faster horses
Henry Ford
what people what people
think say

what people
do

Franck Debane @fdebane

 How to understand the customer need?

Observation
witness the customer experiencing the problem
methods: day in the life, shadowing, video journal, fly in the
wall

Interviews
listen the customer talk about the problem, ask questions
this is called Problem Interview

Immersion
https://www.youtube.com/watch?v=CKsSvR5u-qk
GET OUT OF THE

BUILDING
How to do
Customer Interviews?
Be like Columbo
Nice with everyone
Look at the problem from all possible angles
Trust no one
Draw your own conclusions based on FACTS
Interviews are hard
Empathy and Active listening
(no questionnaire)
Forget your idea
Focus on the customer problem
Guide and Drill
Learn, be curious
Ask why. Why why. Be nosy.
Find facts and avoid opinions
Watch for bias
Ask about past events
Do you get headaches frequently
if so how often?
2.2 / week

Do you get headaches occasionally

if so how often?

0.7 / week

Source: John Hayes, Interpersonal Skills at work. Routledge 2002 referencing Loftus, 1975
What you can discover
Bigger problems the customer has
Alternative solutions
Cost of the problem
How customer looks for solution
Root causes of the problem
Key insights to design a solution
Pain level...
 Pain level…

has the problem

aware of having the problem
looking for a solution
hacked a solution
pay for a solution

Early adopter?
1. What do you do when you have this problem?
1. What else did you try?
2. Tell me the last time you had this problem...
3. How much would you pay for this?
4. Why did you do this?
5. Does it happen to you often?
6. How much does it cost you?
Customer em
Probl es
Segment
y pothes
h

Interview preparation
Go with a partner
Understanding
Notes
Bias
Finding customers
Persona
Behaviours
Alternative solutions
IRL. Online.
Starting the conversation
Just one person
“I am doing a research on ...”
Smile. Make them comfortable
Trust and complicity
About them
After the interview
Thank you
Answer questions
Ask for introductions and referrals
Debrief with partner
Solution Interview
 Tangible proof of
commitment
Something that has a cost for the
buyer
 Tangible proof of commitment

Money - pre-order
Check - to cash later
A signed agreement - with blood?
Invitation to another meeting - location?
An email, phone number, access to friends list
Access to their sensitive data
Something that is valuable...your ideas...
1. I love it, it’s amazing.
2. That’s great. Please let me know when it’s
ready.
3. I will surely buy this!
4. When it’s ready, I will tell my friends.
5. This sucks!
6. Amazingly awesome!
7. I love it. Here is my money...
 Unless commitment is
made, there are only
promises and hopes; but
no plans

Peter Drucker