lean startup for developers university

@sarbogast #Devoxx #ls4dev

Lean Startup for DevelopersSébastien Arbogast

Take Eat Easy


Who are you people?

• How many of you are not developers?

• How many of you thought of creating their own startup one day?

• How many of you went through and did create a startup?

• How many of you are still working in your startup?

• How many of you are working in a startup right now?

• How many of you are familiar with Lean Startup?

• How many of you are fed up with me saying the word "startup" at this point already?


Who am I?

• Java developer for 10+ years

• iOS developer for 5 years

• Agile methodology advocate for 8 years

• Freelancer for 5 years

• Lean Startup practitioner for 4 years

• Startup coach for NEST'up

• VP of Engineering for Take Eat Easy


Why create your own startup?


It's cool to be an entrepreneur!


The (real) entrepreneur lifestyle


Your unique million-dollar idea


There is no such thing


You want to be your own boss


Power comes with responsibility


Your product will be so much better


Think business model


Somebody told you...


Scratch your own itch


Tired of being a consultant?


Beware of the pimps


Obsessed about building a product


Startup is not the best environment


You've got the skills


The perfect triangle


Use your favorite technologies


Over design will kill you


Something out of your pet projects


You will have to keep focus


You want to improve everyone's life


Niche strategy is key


Market research shows you the way


Quality over quantity


Good reasons to do it


Invest in yourself


Find your own solutions


Unique opportunities and expertise


Grow as a human being


Be a part of the solution


Choose the people you work with


Why you would NOT do it


You know what you have...


Not enough money set aside


You miss some business skills


You need to pay the bills


You don't have enough time


Startups are for youngsters


Your ideas are not good enough


You are not in the right place


What if I fail?


Why you are uniquely positioned to do it?


The power to execute


You already know about lean


You are surrounded by problems


You can easily go freelance


Let's create this startup together


Market study

• Questionnaires and surveys

• Market reports

• Quantitative only

• Takes time and money

• Only valid if you want to verify a strong hypothesis

• Very long iteration cycles

• Tends to confirm what you want to hear


Business plan

• Takes time to write

• Long iteration cycle

• Very cumbersome to update

• Who will read it?

• 3-year projections are for existing business models


Incorporate

• In Belgium, you need to set aside 6000€

• It takes about a month

• Once you are in you need an accountant and an office address

• It costs 3000 to 4000€ to shut down

• You'd better be pretty sure it's gonna be worth it


The infamous prototype

• You guess what people are going to need

• You guess what they are familiar with

• You include as many features as you possibly can

• Very few of those features will actually be used

• A lot of wasted time and effort

• DO NOT consider that as "free effort": opportunity cost

• When do you stop?


Non-disclosure agreement• You are afraid that somebody with more money will steal

your great idea before you have the time to realize it but…

• Good and original ideas don't exist

• AWFUL IDEA = -1

• WEAK IDEA = 1

• SO-SO IDEA = 5

• GOOD IDEA = 10

• GREAT IDEA = 15

• BRILLIANT IDEA = 20

• NO EXECUTION= $1

• WEAK EXECUTION = $1000

• SO-SO EXECUTION = $10,000

• GOOD EXECUTION = $100,000

• GREAT EXECUTION= $1,000,000

• BRILLIANT EXECUTION = $10,000,000

X

Source: Derek Sivers


Raise angel funding

• Angel investors are interested in

• Quality, passion, commitment, integrity

• Market opportunity and potential

• Business plan AND initial traction

• Technology and intellectual property

• An appropriate valuation

• Exit strategies

• You need: an elevator pitch, a pitch deck, a prototype…

• But more importantly, you need introductions!


Start testing on real customers

• Build it and they will come

• How do you measure what work and what doesn't?

• What's your launching strategy and marketing budget?

• How will you cut through all the noise?

• What if it doesn't work at all?


Become rich!


Doesn't that ring a bell?


Lean Startup to the Rescue


You know nothing Jon Snow…


Let's upgrade your software


A startup is a learning organization


How not to lose yourself spinning?

• Values: who are you?

• Mission: why do you want to do it?

• Vision: what do you bring into the world?


The goal is to find a business model

• Customer

• Problem

• Solution


Generic process1. Find a customer with a problem2. Find a solution that solves this problem for this customer to

the point he's ready to pay3. Reach product-market fit4. Scale up


Elevator PitchMy company [company name]is developing [defined offering]to help [target customers]solve [problem]with [secret sauce]


Company name

• Don't spend too much time on that

• Start with a code name

• Be pragmatic

• Find a name that is available

• Beware of cultural bias

• Think ahead, think big

• Something easy to remember

• domainr.com

http://domainr.com


Defined Offering

• A platform is not a defined offering

• Think beyond mobile apps and websites (hammers and nails)

• "Concierge mode" is an excellent way to learn

• Because you can doesn't mean you should

• Mailing lists, phone numbers, forums, blogs, brick-and-mortar

• Pen and paper

• Minimum Testable Product

• then Minimum Viable Product


Target Audience• The world is the worst starting

point

• Quality over quantity

• Think growth strategy

• Early-vangelists

• Start with a niche

• Customers != Users

• Criteria priority: pain level, ease of reach, price, market size


Problem

• Customers won't pay for a nice-to-have, only for a must-have

• Shark-bite versus mosquito-bite

• Entertainment is the only exception

• Facebook is not an exception

VS


Secret Sauce

• Not necessarily a secret

• Difference for the sake of difference doesn't matter

• Unique combination of ingredients

• Unique connection to its cook


Information radiatorThe Lean Canvas


How to model a business?


1- Customer segments

NameBehaviors

Needs & goalsFacts


2- Problem3 mostpressingproblems

Existingalternatives

for eachproblem


3- Unique Value Proposition

Tagline for your

marketingwebsite

X for Y


4- SolutionOne key featurefor eachproblem


5- Channels

AwarenessAcquisitionDistribution


6- Revenue Streams

SubscriptionsOne-time


7- Cost Structure

Variable vs fixedHow many customer to

offset costs


8- Key Metrics

How will you

measure success?


9- Unfair Advantage

Can't be easily

copied or bought


Customer-Problem Experiments


Example process

• Brainstorm all potential niches

• Cherry pick 3 of them based on gut feeling

• Draft a lean canvas for each niche

• Sort them by

• Customer pain level

• Ease of reach

• Price

• Market size


Choose the first one…

• and list your hypotheses

• in terms of

• who your target is

• what his problems are

• how they are ordered

• what his alternatives are


Reach out…

• Find at least 5 people to interview

• Schedule interviews


Problem interviews

• Do not sell anything

• Watch verbal and non-verbal answers

• Always ask for referrals


Validate hypotheses

• Every 10 interviews

• Adapt and iterate

• Update your canvas


Don't stop until

• At least 10 persons interviewed

• Well-defined demographics

• Must-have problem

• Understand how customers solve problem today


Problem-Solution Experiments


Draft a solution

• 3 key features with pen and paper

• Pricing proposition


Go back to your first customers

• And their referrals

• See how they react to your features

• Analyze their reaction to your pricing proposition


Learn and adapt

• Update your canvas

• Don't write any code!

• Landing pages are good too

• Coffee shop interviews


Now you can start coding…


Words to the wise

• Don't quit your job until you really have to (customer/problem)

• Don't incorporate before you have a real business

• Find yourself at least one cofounder

• Agile methodologies are a perfect fit

• Do not give shares for advice/contacts

• Beware of bad investment deals

• Take all this with a grain of salt


Questions?