module 1 - lesson 6 constraints 2... · module 1 - lesson 6 constraints ash. 3 2 1 repeatability 3...

ASH MAURYA@ashmaurya

ash@spark59.comPracticeTrumpsTheory.com

MODULE 1 - LESSON 6CONSTRAINTS

ash

3

2

1 Repeatability

3 ATTRIBUTES OF A SYSTEM

Constraints

Throughput

How do you achieve right action, right time?

Problem Solution Unique Value Proposition

Unfair Advantage

Customer Segments

Key Metrics Channels

Cost Structure Revenue Streams

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Everything here is a risk

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Problem Solution Unique Value Proposition

Unfair Advantage

Customer Segments

Key Metrics Channels

Cost Structure Revenue Streams

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Systematically de-risk your vision

customers

investors

entrepreneur

team

Prioritize tackling what’s riskiest, not what’s easiest in your business model.

Systematically test your plan

Identify the riskiest partsof your planDocument your Plan A

Systematically test your plan

Identify the riskiest partsof your planDocument your Plan A

01 Use your intuition.

Incorrect prioritization of risk is the top contributor of waste.

02 Start with top 3 universal risks.

Problem Solution Unique Value Proposition

Unfair Advantage Customer Segments

Key Metrics Channels

Cost Structure Revenue Streams

Lean Canvas is adapted from The Business Model Canvas (http://www.businessmodelgeneration.com) and is licensed under the Creative Commons Attribution-Share Alike 3.0 Un-ported License.

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3

2

Early AdoptersExisting Alternatives

1

03 Seek out domain experts.

Problem Solution Unique Value Proposition

Unfair Advantage

Customer Segments

Key Metrics Channels

Cost Structure Revenue Streams

Help me, help you. - Jerry Maguire

Advisor Paradox: Hire advisors for advice but don’t follow it, apply it.

-Venture Hacks

There is a better way that doesn’t require guessing.

Theory of Constraints:

Every business is a system of interconnected processes with a single constraint.

StepA

StepB

StepC

StepD

StepE

10 units/day 15 units/day 7 units/day 9 units/day 10 units/day

MARKET DEMAND12 units/day

Production Example

StepA

StepB

StepC

StepD

StepE

10 units/day 15 units/day 7 units/day 9 units/day 10 units/day

MARKET DEMAND12 units/day

Production Example

1. What is the maximum system output per day?

StepA

StepB

StepC

StepD

StepE

10 units/day 15 units/day 7 units/day 9 units/day 10 units/day

MARKET DEMAND12 units/day

Production Example

1. What is the maximum system output per day?2. Where is the constraint?

StepA

StepB

StepC

StepD

StepE

10 units/day 15 units/day 7 units/day 9 units/day 10 units/day

MARKET DEMAND12 units/day

Production Example

Throughput is 7 units/day

StepA

StepB

StepC

StepD

StepE

10 units/day 15 units/day 12 units/day 9 units/day 10 units/day

MARKET DEMAND12 units/day

Production Example

StepA

StepB

StepC

StepD

StepE

10 units/day 15 units/day 12 units/day 9 units/day 10 units/day

MARKET DEMAND12 units/day

Production Example

1. What is the maximum system output per day?2. Where is the constraint?

StepA

StepB

StepC

StepD

StepE

10 units/day 15 units/day 12 units/day 9 units/day 10 units/day

MARKET DEMAND12 units/day

Production Example

New throughput is 9 units/day

StepA

StepB

StepC

OUTPUT3 customers/day

Customer Factory Example

Acquisition

Activation

Revenue

20 signups/day 6 users/day

POTENTIALMARKET DEMAND

100 visitors/day

Equipment Capacity: 10,000 users/day 1000 users/day 1000 users/day

People Capacity: N/A 20 users/day 20 users/day

Conversion Rate: 20% 30% 50%

Time To Conversion: 5 minutes 7 days 20 days

Constraints help you identify right action, right time.

It’s time to act on your big idea.Validate and grow your business idea with advice from top business model coaches and lean experts.

Ash Maurya | Author, Running Lean | Founder, Spark59 | @ashmaurya

Life is too short to build something nobody wants…