lean startup methodology
DESCRIPTION
TRANSCRIPT
Lean Startup Methodology
Robert Love
What is "Lean"?
● Takes its name from "Lean Manufacturing"● Toyota Production System (TPS)● Preserving value with less work● Value is defined as any action or process
that a customer would be willing to pay for
What's a "Startup"?
A human institution designed to create new products and services under conditions of extreme uncertainty.
The five principles:
1. Entrepreneurs are everywhere2. Entrepreneurship is management3. Validated learning4. Innovation accounting5. Build-Measure-Learn
Entrepreneurs are everywhere
● You don't have to work in a garage to be in a startup
● All industries● All sectors
Entrepreneurship is management
● A startup is an institution, not just a product● Requires management● A new kind of management specifically
geared to its context of extreme uncertainty
Validated learning
● Startups exist not to make stuff, make money, or serve customers
● They exist to learn how to build a sustainable business
● This learning can be validated scientifically, by running experiments that allow us to test each element of our vision
Innovation accounting
● Improve entrepreneurial outcomes● Hold entrepreneurs accountable● Focus on the boring stuff:
○ How to measure progress○ How to setup milestones○ How to prioritize work
● This requires a new kind of accounting specific to startups
Build-Measure-Learn
● The fundamental activity of a startup is to:○ Turn ideas into products○ Measure how customers respond○ Learn whether to pivot or persevere
● All successful startup processes should be geared to accelerate that feedback loop
"Founders that learn are more successful"
"Startups that pivot once or twice raise 2.5x
the money"
http://getlisted.me/
Problem
It's hard to determine the best person for a job (both ways).
Solution
If we could create a list of the best people for a given profession... ● Employers could find the best people● The best people could land jobs perfectly
matched to their skills
Smoke test
● What can we test before we build anything?● What can we do before we have to build?● How can we find out if anyone finds this list
valuable enough to pay for it?
Experiment #1: Hypothesis
Recruiters will pay for a list of top talent in a profession.
Experiment #1: Method
Create a list of 50 fake software engineers and sell it to 25 recruiters for $200 each.
Experiment #1: Results
No lists were sold.
Experiment #1: Learnings
● Recruiters didn't see the value in the list● Felt that's what their job was● "Why would we just pay for a list"● Felt threatened● (and so they should - after all - we are trying
to disrupt them!)
Pivot or Persevere?
Pivot!
Experiment #2: Hypothesis
In order to avoid expensive recruiter fees, businesses will pay for a list of top talent in a profession.
Experiment #2: Method
Take our list of 50 fake software engineers and sell it to 25 businesses for $200 each.
Experiment #2: Results
No lists were sold.
Experiment #2: Learnings
● Don't offer a flat list● Offer a service where users create lists from
people in their own networks (Facebook and LinkedIn)
● We'll be growing the network of GetListed users without having to do the initial service
● Requires strong viral coefficient (V-Co) to maintain sustainable growth
Pivot or Persevere?
Pivot!
Experiment #3: Hypothesis
1. A user creates a list2. Listees are notified via Facebook wall post
or LinkedIn message that they have been added to a list
3. Listees sign up to GetListed and become users
4. Rinse and Repeat5. V-Co of 1+ will be achieved
Experiment #3: Method
Build and Measure the following: 1. Spread of the network
New members / lists created2. Conversion
New members signed up / new members added3. Cycle
Signups who created a list4. Returning users
Existing signed in users / existing base users
Experiment #3: Results
● 509 listees● 157 sign-ups● 0.31 V-Co
Pivot or Persevere?
Persevere!
Next steps...
Achieve a V-Co of 1+ by connecting via email and experimenting with different messaging. ● Hey Bosco - Michael just joined GetListed - why not add
him to a list?● Hey Bosco - Michael added you to X list - why not list
him back?● Hey Bosco - Phil added Michael to X list - why don't you
list him?
Thanks
● [email protected]● http://au.linkedin.com/in/robertlove