lean innovation introduction
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Dr. Adrian von Orelli, Fredi Schmidli
Zürich, Mai 2014
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Startup Weekend Luzern23. Mai 2014
«Lean Startup»
Neue Wege um das «Richtige»
zu bauen
23.5.2014
Fredi [email protected]
• Business Angel and Boardmember: www.startangels.ch
• Entrepreneur• Community Builder:
- meetup.com/Lean-startup-Zurich/- Agile Breakfasts
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Adrian von [email protected]
• EE PhD ETHZ • R&D leader• Innovator• 15 years of high tech
product development
pragmatic-solutions.ch
To improve the success rate
• 9/10 failing
• by building the wrong product
• 66% of successful Startups significantly change original business idea
• Success does not come from a better idea, but from method/framework which iterates your original ideas to a working business model – before running out of cash
Source: Ash Maurya «Running Lean»323.5.2014 pragmatic-solutions.ch
What is a start up?
A temporary organization in search of a scalable, repeatable business model under condition of extreme uncertainty
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The definitions from Eric Ries, Steve Blank combined
In a startup the customer and what he/she might find valuable is unknown. Value is generated by learning these unknowns.
What is lean?
value is “providing benefit to the customer”, anything else is waste.
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Lean is …
A company culture touching all aspects: Values, Leadership, Employee Development, Empowerment, Performance, Accountability, …
Not a collection of tools
A culture can not be copied
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Deming
“In God we trust, all others must bring data”
W. Edwards Deming
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Goals
Finding a business model, which is
• profitable
• repeatable
• scalable
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Lean Innovation Framework
• documenting your initial business idea
• by iterating and experimentingthrough the feedback loop
• finding out if there is a problemworth solving and if there areenough customers willing to pay
ScaleProduct Market
fit
Problem Solution
fit
Customer Discovery
Customer Validation
Customer Creation
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Lean Canvas by Ash Maurya
Problem Solution UVP Unfair AdvantageCUSTOMERSEGMENTS
KEY Metrics CHANNELS
COST STRUCTURE REVENUE STREAMS
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Hypothesis > Experiment > Facts
Feedback loop
Design experiment
Proposal, Pretotype,Landing page, MVP …
Results fromexperiment
Analyze results Pivot or persevere
weeks
not
years
Assumption/Hypothesis
Run experiment
Creativity happens here
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Experiment report
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Experiment report Title Author: created:
Fro
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ean
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ark5
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Background: what are you trying tio achieve?
why is it relevant?
Falsifiable Hypothesis: declare your expected outcome
[Specific repeatable action] will [expected measurable outcome]
Set scope and time box
Details: How do you set up the experiment
results: qualitative or quantitative results
next action: What is the next experiment
validated learning: Sumarize your learning from the experiment. (Validated, invalidated,
inconclusive.
Lean Innovation Framework
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Traditional versus lean approach
Traditional Lean
50 page business plan 1 page lean canvas
Focus on solution Focus is on problem
Specify all features Minimum viable product
Develop in secrecy Get continuous customer input
Build, launch, sell Build, measure, learn
Complete product build Incremental build
Source: Ash Maurya: Running Lean
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From Proposal to Product
4) MVP: early version with minimal feature set that can be sold to early adopters
1) Proposal: a document describing the solution
3) Pretotype: “Fake” demo of any kind
2) Smoke Test: Landing Page to test interest
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Minimal Viable Product
A MVP is not a minimal product, it is a strategy and process directed toward making and selling a product to customers.
The MVP is that version of a new product which allows a team to collect the maximum amount of validated learning about customers with the least effort. (Eric Ries)
A MVP may be a prototype, an entire product, or a sub-set of product (such as a feature)
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MVP Examples
http://steveblank.com/2013/07/22/an-mvp-is-not-a-cheaper-product-its-about-smart-learning/
Test business model for Drone based imaging system
MVP: Rent camera and planeinstead of building a drone
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Examples of MVP
http://www.thisispaper.co.uk/2013/10/10/mvps-an-introduction/#more-1819/
4. Test vision of service offering for Dropbox
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Examples
MVP
3. Test vision for flat TV
From Tom Kelly „the ten faces of innovation“
Validate your assumptions
Every experiment has three parts
1. A hypothesis that is provable/disprovable
2. The experiment itself; the thing you “build”
3. An indicator of result
Start with the most relevant hypothesis
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The questions to start with
Do customers recognize that they have the problem you are trying to solve?
The questions to verify the value and growth assumptions:
If there was a solution, would they buy it?
Would they buy it from us?
Can we build a solution for that problem?
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Problem Interview
Welcome: Set the scene (2min)
Interviewees demographics-target customer? (2min)
Describe top 3 problems (2min)
Rank the top three problems (4min)
Explore world view, what else keeps them awake (15min)
Wrap up. Sum up feedback to confirm understanding (2min)
Get permission to follow up. Get referrals (2min)
Document results
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Solution InterviewWelcome: Set the scene (2min)
Interviewees demographics-target segment ? (2min)
Tell a story - frame the product (2min)
Show Demo, MVP (15min)
Test pricing (15min)
Wrap up. Sum up feedback to confirm understanding (2min)
Get permission to follow up. Get referrals (2min)
Document results
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Pivot
A change in strategy
without a change in vision
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More information
HBS article „Why lean start up changes everything“
www.steveblank.com
Ash Maurya: “Running Lean”
Eric Ries: „Lean start up“
Brant Cooper: “Entrepreneurs Guide to Customer Development”
Steve Blank: “Customer Development Manifesto”;“Startup Owners Manual”
Alexander Osterwalder: “Business Model Generation”
The end
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