More than 90% of all startup fail. Their plan A for their idea doesn't work out. 2/3 of the successful startups change their plan. because plan A almost never works. Lean Startup is an approach to mitigate these risks, use validated learning, and adapt the plan A to a plan that works. Let's start with innovating ideas and make them successful.

1. How to Run a Lean Startup
August 22nd, 2016
Amancio Bouza, PhD

2. Who am I
Amancio Bouza, PhD
Adventurous Intrapreneur and Dot Connector
Let’s connect:
https://ch.linkedin.com/in/amanciobouza
Follow me:
https://twitter.com/AmancioBouza

3. 90% of all Startups Fail
3

4. Let’s fail fast & cheap
4

5. Still 90% Failures
5

6. 6
What’s
the
secret?
Source: Ehapa/Promo

7. 2 out of 3 successful Startups adapt their plan
7

8. Lean Startup: Measure & Learn and Adapt Your Plan
8

9. 9
#0
ROADMAP

10. 10
Everything starts with an idea
We all have ideas

11. 11
“Nie mehr auf
dem Trockenen
sitzen”

12. 12
The
seconds
that
matter

13. 13
Entrepreneurs,
in contrast to employees,
realize their ideas

14. 14
However,
most Plan A’s
don’t work

15. 15
Iterate from Plan A to
a Plan That Works

16. 16

17. Essence of Running Lean
1. Document your Plan A
2. Identify the riskiest parts of your plan
3. Systematically test your plan
17

18. 18
Step 1:
Document
Your Plan A

19. Capture Your Business Model Hypotheses with Lean Canvas
19
Share with at
least one
other person

20. What is your Product?
20

21. 21
Your Product is
NOT your Product

22. Your “Business Model” is the product
22
SolutionProblem
Cost Structure
Key
Metrics
Unique
Value
Proposition
Unfair
Advantage
Channels
Customer
Segments
Revenue Streams

23. Business Model Canvas
23

24. Lean Canvas vs Business Model Canvas
24

25. 25
Step 2:
Identify the Riskiest Parts
of Your Plan

26. The Three Stages of a Startup
26
Problem/
Solution
Fit
Product/
Market
Fit
Scale
Stage 1 Stage 2 Stage 3

27. Stage 1: Problem/Solution Fit
Q: Do I have a problem worth solving?
• Desirability
• Viability
• Feasibility
27
Problem/
Solution
Fit
Product/
Market
Fit
Scale
Stage 1 Stage 2 Stage 3
Source: http://forty.co

28. Stage 2: Product/Market Fit
Q: Have I built something people want?
• Minimal Viable Product (MVP)
• Test how well your solution solves the
problem
28
Problem/
Solution
Fit
Product/
Market
Fit
Scale
Stage 1 Stage 2 Stage 3

29. Stage 3: Scale
Q: How do I accelerate growth?
29
Problem/
Solution
Fit
Product/
Market
Fit
Scale
Stage 1 Stage 2 Stage 3

30. Pivot Before Product/Market Fit, Optimize After
30
Problem/
Solution
Fit
Product/
Market
Fit
Scale
Validated Learning
Pivot
Growth
Optimization
Focus
Experiment
Focus
Experiment
Pivot: Find a plan that works (effectivity)
Optimization: accelerate that plan (efficiency)

31. 31
Step 3:
Systematically Test
Your Plan

32. An Experiment is One Cycle in the Build-Measure-Learn-Loop
32

33. Iteration-Meta-Pattern
33
Understand
Problem
Define
Solution
Validate
Qualitatively
Problem/Solution Fit Product/Market Fit
Verify
Quantitatively

34. 34
#1
DOCUMENT
YOUR PLAN A

35. Brainstorm Possible Customers
Distinguish between customer and user
a customer pays for your product, a user doesn’t
Split broad customer segments into smaller ones
You can’t create a product for everyone
Sketch a Lean Canvas for each customer segment
start with the top two or three customer segments
Put everyone on the same canvas at first
Easier to start
35

36. Sketching Lean Canvas
36
Solution
Top 3 Features
Problem
Top 3 Problems
Cost Structure
Customer Acquisition Costs
Distribution Costs
Hosting
People, etc.
Key
Metrics
Key activities you
measure
Unique
Value
Proposition
Single, clear,
compelling message
that states who you are
different worth buying
Unfair
Advantage
Can’t be easily copied
or bought
Channels
Path to customers
Customer
Segments
Target Customers
Revenue Streams
Revenue Model
Lifetime Value
Revenue
Gross Margin

37. How to Sketch a Lean Canvas:
Tips:
Go from 1 to 9
Sketch a canvas in one sitting (<15min)
It’s OK to leave sections blank
Be concise
Think in the present
Use a customer-centric approach
37

38. Problem and Customer Segments
List the top one to three problems of customer seg.
List existing alternatives
How do customers solve the problem now?
Identify other user roles
What user interact with the customer?
Focus on Early Adopter
38
Solution
Top 3 Features
Problem
Top 3 Problems
Cost Structure
Customer Acquisition Costs
Distributing Costs
Hosting
People, etc.
Key Metrics
Key activities you
measure
Unique Value
Proposition
Single, clear,
compelling message
that states who you are
different worth buying
Unfair
Advantage
Can’t be easily copied
or bought
Channels
Path to customers
Customer
Segments
Target Customers
Revenue Streams
Revenue Model
Lifetime Value
Revenue
Gross Margin
1 2

39. Unique Value Proposition (UVP)
UVP:
Why you are different and worth buying getting attention
Be different, but make sure your difference matters
Derive from number one problem
Target early adopters
Answer: what, who, and why
Create a high-concept pitch
Focus on finished story benefits
39
Solution
Top 3 Features
Problem
Top 3 Problems
Cost Structure
Customer Acquisition Costs
Distributing Costs
Hosting
People, etc.
Key Metrics
Key activities you
measure
Unique Value
Proposition
Single, clear,
compelling message
that states who you are
different worth buying
Unfair
Advantage
Can’t be easily copied
or bought
Channels
Path to customers
Customer
Segments
Target Customers
Revenue Streams
Revenue Model
Lifetime Value
Revenue
Gross Margin
3

40. Unique Value Proposition (UVP)
40
Solution
Top 3 Features
Problem
Top 3 Problems
Cost Structure
Customer Acquisition Costs
Distributing Costs
Hosting
People, etc.
Key Metrics
Key activities you
measure
Unique Value
Proposition
Single, clear,
compelling message
that states who you are
different worth buying
Unfair
Advantage
Can’t be easily copied
or bought
Channels
Path to customers
Customer
Segments
Target Customers
Revenue Streams
Revenue Model
Lifetime Value
Revenue
Gross Margin
3

41. Solution
DON’T DEFINE THE SOLUTION YET
All you have are untested problems
Sketch out the simplest solution to address each problem
41
Solution
Top 3 Features
Problem
Top 3 Problems
Cost Structure
Customer Acquisition Costs
Distributing Costs
Hosting
People, etc.
Key Metrics
Key activities you
measure
Unique Value
Proposition
Single, clear,
compelling message
that states who you are
different worth buying
Unfair
Advantage
Can’t be easily copied
or bought
Channels
Path to customers
Customer
Segments
Target Customers
Revenue Streams
Revenue Model
Lifetime Value
Revenue
Gross Margin
4

42. Channels
Freer versus paid
Inbound versus outbound
Direct versus automated
Direct versus indirect
Retention before referral
42
Solution
Top 3 Features
Problem
Top 3 Problems
Cost Structure
Customer Acquisition Costs
Distributing Costs
Hosting
People, etc.
Key Metrics
Key activities you
measure
Unique Value
Proposition
Single, clear,
compelling message
that states who you are
different worth buying
Unfair
Advantage
Can’t be easily copied
or bought
Channels
Path to customers
Customer
Segments
Target Customers
Revenue Streams
Revenue Model
Lifetime Value
Revenue
Gross Margin
5

43. Revenue Streams and Cost Structure
Revenue Streams – But why for an MVP?
Price is part of the product
Price defines your customer
Getting paid is the first form of validation
Tip: pricing against existing alternatives
Cost structure
How much to interview 30-50 customers?
How much to build and launch MVP?
Burn rate of fixed and variable costs?
43
Solution
Top 3 Features
Problem
Top 3 Problems
Cost Structure
Customer Acquisition Costs
Distributing Costs
Hosting
People, etc.
Key Metrics
Key activities you
measure
Unique Value
Proposition
Single, clear,
compelling message
that states who you are
different worth buying
Unfair
Advantage
Can’t be easily copied
or bought
Channels
Path to customers
Customer
Segments
Target Customers
Revenue Streams
Revenue Model
Lifetime Value
Revenue
Gross Margin 67

44. Key Metrics
44
Solution
Top 3 Features
Problem
Top 3 Problems
Cost Structure
Customer Acquisition Costs
Distributing Costs
Hosting
People, etc.
Key Metrics
Key activities you
measure
Unique Value
Proposition
Single, clear,
compelling message
that states who you are
different worth buying
Unfair
Advantage
Can’t be easily copied
or bought
Channels
Path to customers
Customer
Segments
Target Customers
Revenue Streams
Revenue Model
Lifetime Value
Revenue
Gross Margin
8
Source: Dave McClure’s Pirate Metrics

45. Unfair Advantage (aka The Hardest One)
Insider information
The right “expert” endorsements
A dream team
Personal authority
Large network effects
Community
Existing customers
SEO ranking
45
Solution
Top 3 Features
Problem
Top 3 Problems
Cost Structure
Customer Acquisition Costs
Distributing Costs
Hosting
People, etc.
Key Metrics
Key activities you
measure
Unique Value
Proposition
Single, clear,
compelling message
that states who you are
different worth buying
Unfair
Advantage
Can’t be easily copied
or bought
Channels
Path to customers
Customer
Segments
Target Customers
Revenue Streams
Revenue Model
Lifetime Value
Revenue
Gross Margin
9

46. 46
#2
IDENTIFY THE RISKIEST PARTS
OF YOUR PLAN

47. 47
Prioritize
Where to Start

48. Uncertainty:
Lack of complete certainty. Existence of more than
one possibility
Risk:
A state of uncertainty where some of the possibilities
involve an undesirable outcome
48

49. How to Quantify Risk
P(Risk) x LO$$(Risk)
49

50. Three Categories of Risks
Product Risk
Getting the product right
Customer Risk
Building a path to customers
Market Risk
Building a viable business
50
SolutionProblem
Existing
Alternatives
Cost Structure
Key
Metrics
Unique
Value
Proposition
Unfair
Advantage
Channels
Customer
Segments
Early adopter
Revenue Streams
P
C
M C
P
MM
C
P
P
M
Product Risk Customer Risk Market Risk

51. How to Rank Your Business Models
1. Customer pain level (Problem)
2. Ease of reach (Channels)
3. Price/gross margin (Revenue Streams/Cost Structure)
4. Market size (Customer Segments)
5. Technical feasibility (Solution)
51

52. Seek External Advice
Avoid the 10-slide deck
Just uncover the Lean Canvas
Devote 20% of time to , 80% to conversation
Listen, Listen, Listen. Everybody has an opinion
Ask specific questions
What is the riskiest aspect of the plan?
Have they overcome similar risks? How?
Are there other people I should speak with?
“Advisor Paradox”
Don’t follow advice, apply it.
52

53. 53
Get Ready
to Experiment

54. Assemble a Problem/Solution Team
Problem Team
Interviews, Tests
54
Solution Team
Developing MVP
Source: Innovation Process Technology AG Source: Innovation Process Technology AG

55. 55
“Get out of the building.”
– Steve Blank

56. Product/Solution Team: two to three people
Start with smallest team possible
Communication is easier
You build less
You keep costs low
You need:
Development
Design
Marketing
NEVER outsource learning about customers!
56
Source: Innovation Process Technology AG

57. Running Effective Experiments
57
Focus
Speed
Learning

58. Maximize for Speed, Learning, and Focus
58
Speed
FocusLearning
Premature optimization Chasing your tail
Running out off resources
The optimal learning loop

59. Formulate a Falsifiable Hypothesis
Formula for falsifiable hypothesis:
[Specific Repeatable Action] will [Expected Measurable Outcome]
Examples:
Bad: Being known as an “expert “ will drive early adopters
Good: Blog post will drive 100 signups
59

60. 60
Validate Qualitatively,
Verify Quantitatively

61. Do the Smallest Thing Possible to Learn
61

62. 62

63. Lessons Learned Report
What we Thought
Insights
What’s Next
Key Metrics
Lean Canvas
63

64. 64

65. 65

66. 66
“Startups that succeed are those
that manage to iterate enough
times before running out of
resources.”
– Eric Ries

67. 67
#3
SYSTEMATICALLY TEST
YOUR PLAN

68. 68
“If I had asked people what they
wanted, they would have said faster
horses.”
– Henry Ford

69. 69
“It is not the customer’s job to
know what they want.”
– Steve Jobs

70. Applying the Iteration Meta-Pattern to Risks
70
Understand
Problem
Define
Solution
Validate
Qualitatively
Problem/Solution Fit Product/Market Fit
Verify
Quantitatively

71. S1. Understand the problem
Who, What, How solved today?
S2. Define the solution
Demo, Pricing?
S3. Validate qualitatively
MVP, soft launch. Getting paid?
S4. Verify quantitatively
Scale? Viable?
71
SolutionProblem
Existing
Alternatives
Cost Structure
Key
Metrics
Unique
Value
Proposition
Unfair
Advantage
Channels
Customer
Segments
Early adopter
Revenue Streams
1
1
1
2
2
2
34
3
4
2
2
Product Risk Customer Risk Market Risk

72. 72
Take Home:
Your Plan A will NOT work

73. 73
Iterate from Plan A to
a Plan That Works
Understand
Problem
Define
Solution
Validate
Qualitatively
Problem/Solution Fit Product/Market Fit
Verify
Quantitatively