Lean Startup Workshop

1/10/2018
LEAN STARTUP THINKING

2018 WORKSHOP
DAVID BOCKING
AGENDA
• Introductions 1:00- 1:20
• Lean StartUp – What & Why 1:20- 1:30
• Tools
– Business Model Canvas 1:30 -2:30
– Break 2:30 – 2:45
– Value Proposition Design 2:45 – 3:45
– Testing 3:45 – 4:15
• Alberta Innovates Programs 4:15 – 4:45
• Feedback / Questions 4:45- 5:00
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1/10/2018
INTRODUCTIONS
• Housekeeping
– Emergency
– Washrooms
• Confidentiality
• Materials
– Presentation material – yes
– Canvases – yes
– Pens and left over Post-It notes - no
DAVID BOCKING
TECHNOLOGY DEVELOPMENT ADVISOR
✓ Telecom, energy services
✓ Internet of Things / M2M
Marketing / ✓ Software, hardware, services
Product ✓ Marketing Communications
Management
✓ Service Development
(11 years) ✓ Consumer / B2B
TDA 18 months • 250+ clients

Innovation and • 600+ coaching
Strategy Sales sessions
Consulting (10 years) • 70+ funding
(10 years) applications
✓ Ideation & Innovation
✓ Healthcare, software ✓ Telecom, Food, Software, Services
✓ Enterprise Mobility ✓ Channel Program Development
✓ Remote Health Monitoring ✓ Leadership / Management
✓ Public & Private Sector ✓ Executive Relationships
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1/10/2018
THREE STARTUP ROLES
Hustler / Huckster Hipster Hacker

Generate outside interest Deliver great customer Build the damn thing
experience
Personality traits: Personality traits: Personality traits:

• Go-getter • Creative • Analytical
• Die-Hard • Empathetic • Structured
• Disciplined • Thoughtful • Reliable
• Extroverted • Good • Focused
• Networker communicator • Stress-resistant
• Minimalist
Hi, I am __________ and I am a _<hustler, hipster, hacker>__

that founded _____________________________
We are creating ________< product>____________

that will ____< value >_______________________
for ______< target customer>__________________________
which is better than ____<competition>_____________
because ____<differentiator>_________________________
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1/10/2018
INTRODUCE YOURSELF AND YOUR IDEA
blood test
We are creating a ____________________
detect lung cancer
that will _________________________________
screening all adults
for _____________________________________
CT scans
which is better than _______________________
is safer, more accessible and less costly
because it ______________________________
WHAT IS THE SINGLE MOST

IMPORTANT THING EVERY
BUSINESS MUST HAVE?
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1/10/2018
Customers
TWO SCENARIOS – TO SCALE
10
5
1/10/2018
GOALS FOR THIS WORKSHOP

• Processes and tools
– Think about and design your business
– Build the right product
– Become more fact based
– Reduce risk of your startup
• Challenge your own assumptions
• Get you closer to the money from
– Customers
– Investors
11
THOUGHT LEADER INTRODUCTIONS

Steve Blank Eric Ries Alex Osterwalder
Clayton Christensen Dan Olsen Justin Wilcox
“Read 500 pages every day. That’s how knowledge works. It builds up, like compound interest”
Warren Buffett on key to his success
12
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1/10/2018
LEAN STARTUP
13
WHAT IS A STARTUP?
A human institution designed to
create a new product or service
under conditions of extreme
uncertainty!
Eric Ries
A temporary organization
designed to search for a
repeatable and scalable
business model!
Steve Blank
14
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1/10/2018
LEAN STARTUP MOVEMENT
1. Building products or services

that no one will buy
2. Persevering with your idea
despite feedback from the
market
Don’t fall in love

with your idea
until your
customers do!
15
CAUSE – STARTUP FAILURE
16
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TRADITIONAL APPROACH
MINDSET: CAN WE BUILD IT?
Engineering
Risk
Technology Readiness Level
Operational Deployment
Operational Demonstration
Operational Prototype
Customer
Lab Prototype Risk
POC
Commercial Readiness Level
17
LEAN STARTUP APPROACH

MINDSET: SHOULD WE BUILD IT?
Engineering
Risk
Technology Readiness Level
Minimum
Business
Viable
Model Fit
Product
Product
Market Fit
Customer
Problem Risk
Solution Fit
Commercial Readiness Level
18
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GOAL: VALIDATED LEARNING
Build
Lean Startup
Ideas MVP
=
Experiments
Learn Measure
Data
19
MINIMUM VIABLE PRODUCT (MVP)

1. What is the most important thing we need to
learn on our project?
2. What’s the least amount of work we need to
do to learn that?
– The MVP is what you build for the experiment
– Learn
– Persevere as planned, Pivot, Pause (kill it)
MVP is not the Phase 1 Release of the product!

20
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CONVERGE ON CUSTOMER
Engineer
(Agile)
Should we
build it?
Design “Customer” Product
(Design (Lean
Thinking) Startup)
21
PROCESS AND TOOLSET
22
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1/10/2018
WHY DO WE NEED PROCESS & TOOLS
✓Common language for innovation

✓Visual and collaborative
✓Way to think about the problem – break it
down into its parts
✓Way to communicate our vision / plans
✓Captures best practices / builds capacity
✓Efficiency – lean thinking / manage risks
MOMENTUM – COLLABORATIVE / CUMULATIVE EFFORT
23
HIGH LEVEL APPROACH

Lean Startup Mindset – Validated Learning
Process
Tools
Techniques / Testing
24
12
1/10/2018
CUSTOMER DEVELOPMENT PROCESS

Customer Development is the process to organize
the search for a business model
www.steveblank.com
25
CUSTOMER DEVELOPMENT
https://youtu.be/f_LNNnNfpp4
26
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WHAT IS A BUSINESS MODEL?

Business Model – describes the rationale of how
an organization creates, delivers and captures
value
27
BUSINESS MODEL CANVAS EXPLAINED
https://youtu.be/QoAOzMTLP5s
28
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30
31
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BUSINESS MODEL
✓You create value for your customers with

your value proposition
✓You deliver value to your customers through
your solution -- which customers find through
your channels
✓You capture value back from your customers
through your revenue streams
32
Timing!
Innovation Context?
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1/10/2018
EXERCISE 1: COMPLETE YOUR

BUSINESS MODEL CANVAS
10 MINUTES
34
PROTOTYPE YOUR BUSINESS MODEL

• Don’t write on the canvas • 10 Minutes
• One idea per Post-It note • Your homework
(no bullet lists) assignment should have
• Color coding – use one caused you to think about
color per customer most of these elements
segment • Coaches available for
• Use visuals and words questions
• Don’t mix present
(existing) and future (new)
• Don’t get too granular –
focus on the story /
linkages
35
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36
PITCH YOUR BUSINESS MODEL PROTOTYPE
One minute
➢ Start with customer segment

➢ Value Proposition
➢ Revenue Stream
➢ Channel & Customer Relationship
➢ Activities & Resources
➢ Partnerships
➢ Costs
37
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1/10/2018
HOW STRONG IS YOUR BUSINESS MODEL

• Take away
• Revisit after each
iteration
• Challenge yourself to
see if you can make it
stronger
38
BREAK – 15 MINUTES
39
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1/10/2018
PROTOTYPE OF YOUR BUSINESS
40
LEAP OF FAITH: VALUE PROP & TRACTION
Do I have a Have I built How do I

problem worth something accelerate
solving? people want? growth?
Value Proposition
Traction Model
41
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1/10/2018
WHY WE NEED VALUE PROPOSITIONS
https://youtu.be/WnPjqt6vEzA
42
WHAT IS A VALUE PROPOSITION?

Value Propositions – describe the benefits
customers can expect from your products and
services
43
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VALUE PROPOSITION CANVAS TOOL
https://youtu.be/ReM1uqmVfP0
44
JOBS TO BE DONE (JTBD)
“the progress that a “the process a consumer goes

customer desires to make in through whenever they evolve
a particular circumstance” themselves through buying and
using a product”
45
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JOBS TO BE DONE (JTBD)
1. How do your products or services

help your customers make
progress in their lives?
2. In which circumstances are they
trying to make progress?
3. What are the functional, social
and emotional dimensions of this
progress?
46
JOBS TO BE DONE - MILKSHAKES
https://youtu.be/sfGtw2C95Ms
47
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1/10/2018
PUTTING JTBD TO WORK

• What will customers stop using when
they start using your product? Defines
your competition!
• Learn what kind of progress customers
are seeking. What’s their emotional
motivation (JTBD)?
• Don’t focus solely on functionality.
• Ask yourself, “From which budget will
my product take away money?”
• Create better marketing material by
speaking to your customers’ JTBD.
48
JTBD AND VALUE PROPOSITION
49
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FOCUS ON HIGH VALUE JOBS
http://blog.strategyzer.com/
50
Solar Roofing System Millennials Building New Homes
100%
Renewable
Solar Use
Shingles Renewable
Pay off Energy
mortgage
Battery in 15 Yr Not be a
System slave to
mortgage
Solar
Feed In Panels Are
Solar is Adhere to
Agreement Ugly
unreliable building
guidelines
Wind not High up

allowed front costs
51
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1/10/2018
Solar Roofing System Millennials Building New Homes
100%
Renewable
Solar Pay off Use

36 hours mortgage Renewable
Shingles
storage in 15 Yr Energy
Battery Buy excess Not be a
System power slave to
Solar is mortgage
3 Styles of unreliable
Feed In
shingles Adhere to
Agreement High up building
front costs guidelines
Solar
Panels Are
Ugly
Wind not
allowed
52
PROTOTYPE – VALUE PROPOSITION

• Don’t write on the canvas • 10 Minutes
• One idea per Post-It note • Your homework
(no bullet lists) assignment should have
• Color coding – caused you to think about
– Yellow – jobs & products most of these elements
– Red – pains • Coaches available for
– Green for gains, gain questions
creators and pain relievers
• Use visuals and words
53
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1/10/2018
EXERCISE 2: COMPLETE YOUR

VALUE PROPOSITION CANVAS
10 MINUTES
54
Pick One Segment
Focus on most
Map the features to What we What we important jobs and
the most important their associated
jobs, pains / gains design! observe! pains / gains
55
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1/10/2018
PRESENTATION – 1 MINUTE EACH

• Customer segment ________________________________
• Tell the story
– Their most important jobs are: _________________________________
– The most important gains are:

________________________________________________________
– The biggest pains in completing this job are: ____________________

________________________________________________________
• Describe your Value Map
– What are your Gain Creators ________________________________
– What are your Pain Relievers ________________________________
56
COMPETITIVE ADVANTAGE
Your Solution
Competitor
Strength
Weakness
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1/10/2018
RE WORK YOUR ELEVATOR PITCH?
We are creating ________< product>____________

that will ____< value >_______________________
for ______< target customer>__________________________
which is better than ____<competition>_____________
because ____<differentiator>_________________________
59
TESTING / EXPERIMENTATION
60
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RISK MANAGEMENT
61
BUSINESS MODEL HYPOTHESIS DEVELOPED
Extreme Uncertainty
Start Here
62
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TEST TO LEARN: EVIDENCE BASED INSIGHTS
63
GET OUT OF THE BUILDING – TEST, TEST….
64
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TESTING PROCESS
65
TESTING TOOLS
66
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TRACKING YOUR PROGRESS
67
INNOVATION EVIDENCE
68
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1/10/2018
BUILDING A MVP
High
Opportunity Competitive
Importance
of Job
Not Worth Going After

Low
Low High
User Satisfaction with Current Solutions
69
COMMON TESTS FOR MVP
https://youtu.be/cEyjOkRCpV8
70
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LET’S GET SPECIFIC – CUSTOMER

DISCOVERY
Tools &
techniques for
Customer
Discovery
71
INNOVATION EVIDENCE
72
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1/10/2018
CUSTOMER DISCOVERY
Get Out Of the Building
• Problem – Solution Fit
• Founders should not outsource these insights
• Start with Customer Discovery Interviews
• Lay the foundation for future testing
• Use Value Proposition Canvas as starting point
73
WHO TO INTERVIEW
https://youtu.be/m0kiZocBbO8
74
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WHAT TO ASK
https://youtu.be/OTkP2JDeGWM
75
I've spent the last few days meeting with companies in Calgary,
Red Deer, and Edmonton. I forced myself not to speak about our
offering, but instead just listen to challenges that these
companies were facing.
Not only did it help me understand more about the "Jobs" they
were trying to do, but it also takes the tension out of the
meeting that is normally associated with a pitch meeting.
Customer discovery feels more like a casual chat and the
companies don't feel like they need to be on guard for the pitch
or ask at the end.
Jeff Kennedy – Timberstone Tools (Sept 1, 2017)

76
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CUSTOMER INTERVIEW TEMPLATE
77
RISKIEST ASSUMPTION FOR STARTUPS

The riskiest assumption, for every startup, is that there are people actively trying to solve the
problem your product will solve for them – these are your Early Adopters .
In particular, your goal during this phase of testing is to validate:

1. There are people already trying to solve the problem (Early Adopters)
2. You know how they describe the problem
3. You know the emotions they experience associated with the problem
4. You know where/how to reach them
5. The deficiencies of their current solution
Experiment to Run: The best technique for validating these assumptions is the customer discovery interview.
• Interviews will answer any questions you have regarding the assumptions above, and set you up for success
in validating the rest of your assumptions.
Metric to Measure: What percentage of customers you interview report taking steps to solve the same problem
w/n the last 6 months?
Once 60% of your last 10 interviewees report actively trying
to solve the same problem, you’ll have found your Early Adopters.
www.customerdevlabs.com
78
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RISKIEST ASSUMPTION TEST (RAT)
79
INNOVATION EVIDENCE
81
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5 DAY SPRINT
https://youtu.be/-ivb5R-44ww
82
TRACTION MODEL -
INTRODUCTION
83
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WHAT IS TRACTION?
Traction is the rate at which a

business model captures
monetizable value from its users.
84
TRACTION MODEL – 10X
www.LEANSTACK.COM 86
41
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TRACTION MODEL
TRACTION MODEL – 7 KEY METRICS
42
1/10/2018
WHAT SHOULD YOU DO NEXT?
90
MINDSET: SHOULD WE BUILD IT?
Engineering
Risk
Validated Learning / Traction
Minimum
Business
Viable
Model Fit
Product
Spend
Product
Market Fit
Customer
Problem Risk
Solution Fit
Customer Customer Customer Company

Discovery Validation Creation Building
91
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DESIGN SCALABLE BUSINESS MODEL
92
INNOVATION JOURNEY
93
44
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SUMMARY
• Customer Development Process – search for a business model
• Tools – Business Model & Value Prop Design
• Risk management – understand your assumptions and test the
most important ones
• Design tests and experiments to prove your assumptions
are wrong – start with customer discovery interviews
• Get out and talk to lots of customers and find your early
adopters
• Don’t get too wed to your first idea, be prepared to pivot
• Never stop networking, find mentors and have fun!
94
ACTION PLAN
• Business Model Canvas – update it weekly

• Value Proposition Canvas – anchor it on most
important jobs – validate, validate,……
• Test – RAT, Prioritized Test Plan
• Run the experiments / tests
• Proceed, Pivot or Pause
95
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1/10/2018
RESOURCES
Two canvases are the primary tools: Business Model Canvas is the rationale for how you create, deliver and capture value. There are nine
elements that must work together. The Value Proposition Canvas helps you dive deeper into the Customer Segment and Value Proposition
elements of the business model. Successful business models require a very strong value proposition at the foundation. There are a couple of
quick videos at this link and you can download the tools. https://strategyzer.com/canvas
There are more tools here if you create a free account http://blog.strategyzer.com/posts/2016/4/26/access-30-free-strategyzer-tools-in-our-
resource-library There are 5 free webinar videos here that give you a quick overview of the key tools
http://blog.strategyzer.com/posts/2016/4/4/strategyzer-webinars-essential-links-to-our-free-live-sessions
A great pod cast here on the “Jobs to be done” theory of innovation https://hbr.org/ideacast/2016/12/the-jobs-to-be-done-theory-of-
innovation?utm_campaign=harvardbiz&utm_source=twitter&utm_medium=social
Steve Blank – Customer Development www.steveblank.com
Why you need to do interviews? (hint: turn guesses into facts)

https://www.youtube.com/watch?v=PFlSiHWaaMs&feature=youtu.be
Customer Dev Labs http://customerdevlabs.com/

– Who to interview? https://youtu.be/m0kiZocBbO8
– What do you ask? https://youtu.be/OTkP2JDeGWM
– After the interviews? https://youtu.be/YFolzMOC3NA
– Interviewing Anxiety https://youtu.be/RwB70bXMcmg
Startup Series - 220 Videos

https://www.youtube.com/watch?v=VZvgj6B2JZs&list=PLAwxTw4SYaPnxzSuovATBMrNowGaaEBmW
96
ALBERTA INNOVATES
ENTREPRENEURIAL INVESTMENTS
97
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1/10/2018
ENTREPRENEURIAL INVESTMENTS
Technology
Executive Business
Development
Advisors
Advisors
Coaching
SMEs
Regional Innovation Access to dilutive
Networks and debt capital
Community Capital
Alberta
Non-dilutive
Entrepreneurship
Granting Programs
Incubator
98
FIVE FUNDING PROGRAMS
• Voucher Programs (2) – help you hire a 3rd

party service provider
• Associates Programs (2) – help you hire
business or technology staff
• Product Demonstration Program – help you
prove your product in an operational
environment
99
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1/10/2018
PROGRAM SUMMARY
Program % Alberta $ Maximum Term Notes
Innovates
Funds
Micro Voucher 75% $10,000 Up to 1 Yr 1 Service Provider
Arms length
No restriction on location
Voucher 75% $100,000 Up to 2 Yr Up to 3 Service Providers
6 Milestones Arms length
No restriction on location
Commercial 75% L1=$52,500 Up to 2 Years Must reside in Alberta
Associate L2=$75,000 Full-time T4 Employees
(business) L3=$105,000 Max of 3 Associates
r&D Associate 75% L1=$52,500 Up to 2 years Cannot own > 15% equity
(technical) L2=$67,500 $7000 / Yr for expenses
Product 50% $300,000 Up to 2 Yr Up to 3 partners, one should

Demonstration 6 Milestones be a customer
50% contribution can be in-
kind from applicant or
partners
http://fund.albertainnovates.ca/Fund/CommercializationServices/IndustryFundingFormsandGuidelines.aspx
100
APPLYING
• Alberta SME – must be incorporated and for profit
• We fund projects
• Open call – evaluated as received
• Requirements:
– Online application
– Business Plan – including 5 year pro forma financials
– Financial Statements – last 6 months
– Vouchers: quote from service providers
– Associates: resumes and letters of reference
– PDP: Letter of Intent from project partners
101
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1/10/2018
APPLYING
• Helpful: evidence/validation of market interest,
letters of support especially from customers,
quantification
• Decisions: 30 days for Micro Voucher, 60 days
for the rest
• TDA: are coaches through the process, not the
decision makers
• Grant contracts / Reporting requirements
102
SUCCESS DEPENDS ON….
✓Technology or knowledge based businesses

✓High potential - high growth
✓Revenue, jobs and export growth
✓Diversify the economy
✓Social and economic benefit to Alberta
103
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1/10/2018
GET CONNECTED IN THE ECOSYSTEM
• Startup Calgary http://startupcalgary.ca/

• Innovate Calgary https://www.innovatecalgary.com/
https://www.rainforestab.ca/
104
DAVID BOCKING
TECHNOLOGY DEVELOPMENT ADVISOR
ALBERTA INNOVATES
DAVID.BOCKING@ALBERTAINNOVATES.CA
403-305-1705
TWITTER: @INNOTRACTION
LINKEDIN: HTTPS://CA.LINKEDIN.COM/IN/DAVID-BOCKING-238A323
105
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1/10/2018

LEAN STARTUP THINKING

TDA 18 months • 250+ clients

THREE STARTUP ROLES

Hustler / Huckster Hipster Hacker

Personality traits: Personality traits: Personality traits:

Hi, I am __________ and I am a _<hustler, hipster, hacker>__

We are creating ________< product>____________

INTRODUCE YOURSELF AND YOUR IDEA

WHAT IS THE SINGLE MOST

TWO SCENARIOS – TO SCALE

GOALS FOR THIS WORKSHOP

THOUGHT LEADER INTRODUCTIONS

Clayton Christensen Dan Olsen Justin Wilcox

LEAN STARTUP MOVEMENT

1. Building products or services

Don’t fall in love

CAUSE – STARTUP FAILURE

Commercial Readiness Level

LEAN STARTUP APPROACH

Commercial Readiness Level

GOAL: VALIDATED LEARNING

MINIMUM VIABLE PRODUCT (MVP)

MVP is not the Phase 1 Release of the product!

PROCESS AND TOOLSET

WHY DO WE NEED PROCESS & TOOLS

✓Common language for innovation

HIGH LEVEL APPROACH

CUSTOMER DEVELOPMENT PROCESS

WHAT IS A BUSINESS MODEL?

BUSINESS MODEL CANVAS EXPLAINED

✓You create value for your customers with

EXERCISE 1: COMPLETE YOUR

PROTOTYPE YOUR BUSINESS MODEL

PITCH YOUR BUSINESS MODEL PROTOTYPE

➢ Start with customer segment

HOW STRONG IS YOUR BUSINESS MODEL

PROTOTYPE OF YOUR BUSINESS

LEAP OF FAITH: VALUE PROP & TRACTION

Do I have a Have I built How do I

WHY WE NEED VALUE PROPOSITIONS

WHAT IS A VALUE PROPOSITION?

VALUE PROPOSITION CANVAS TOOL

JOBS TO BE DONE (JTBD)

“the progress that a “the process a consumer goes

JOBS TO BE DONE (JTBD)

1. How do your products or services

JOBS TO BE DONE - MILKSHAKES

PUTTING JTBD TO WORK

JTBD AND VALUE PROPOSITION

FOCUS ON HIGH VALUE JOBS

Solar Roofing System Millennials Building New Homes

Wind not High up

Solar Roofing System Millennials Building New Homes

Solar Pay off Use

PROTOTYPE – VALUE PROPOSITION

EXERCISE 2: COMPLETE YOUR

Pick One Segment

PRESENTATION – 1 MINUTE EACH

– The most important gains are:

– The biggest pains in completing this job are: ____________________

RE WORK YOUR ELEVATOR PITCH?

We are creating ________< product>____________

BUSINESS MODEL HYPOTHESIS DEVELOPED

We are creating < product>____

We are creating < product>____