lean startup methodology

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Lean Startup Methodology Robert Love

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Page 1: Lean Startup Methodology

Lean Startup Methodology

Robert Love

Page 2: Lean Startup Methodology
Page 3: Lean Startup Methodology
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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

Page 5: Lean Startup Methodology

What's a "Startup"?

A human institution designed to create new products and services under conditions of extreme uncertainty.

Page 6: Lean Startup Methodology

The five principles:

1. Entrepreneurs are everywhere2. Entrepreneurship is management3. Validated learning4. Innovation accounting5. Build-Measure-Learn

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Entrepreneurs are everywhere

● You don't have to work in a garage to be in a startup

● All industries● All sectors

Page 8: Lean Startup Methodology

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

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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

Page 10: Lean Startup Methodology

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

Page 11: Lean Startup Methodology

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

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"Founders that learn are more successful"

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"Startups that pivot once or twice raise 2.5x

the money"

Page 15: Lean Startup Methodology

http://getlisted.me/

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Problem

It's hard to determine the best person for a job (both ways).

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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

Page 18: Lean Startup Methodology

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?

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Experiment #1: Hypothesis

Recruiters will pay for a list of top talent in a profession.

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Experiment #1: Method

Create a list of 50 fake software engineers and sell it to 25 recruiters for $200 each.

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Experiment #1: Results

No lists were sold.

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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!)

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Pivot or Persevere?

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Pivot!

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Experiment #2: Hypothesis

In order to avoid expensive recruiter fees, businesses will pay for a list of top talent in a profession.

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Experiment #2: Method

Take our list of 50 fake software engineers and sell it to 25 businesses for $200 each.

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Experiment #2: Results

No lists were sold.

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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

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Pivot or Persevere?

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Pivot!

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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

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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

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Experiment #3: Results

● 509 listees● 157 sign-ups● 0.31 V-Co

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Pivot or Persevere?

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Persevere!

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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?

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Thanks

[email protected]● http://au.linkedin.com/in/robertlove