1. hi
Thanks for coming to this session.

2. You Are Here
• Interested in startups that create products
• Interested in the concept of “lean startups”
• Have been, currently are, or are thinking
about founding a startup

3. I hope to get you here
• Clear, high level understanding of Market
Validation, Customer Development and The
Lean Startup
• Some level of understanding of how these
benefit the creation of a successful product
• Excited to look into these three models and
try them out and see what works for you

4. Market Validation
What does this mean to you?

5. What is Market Validation?
A process for
determining whether
or not your target
market is:
• Real
• Worthy of your idea
• Addressable

6. Really. What is Market Validation?
• Primary (Proprietary) Market Research
1. Face to Face Interviews
2. Phone Interviews
3. On Line Interviews / Surveys
• Secondary Market Research
– Analysts
– Market Research

7. What does Market Validation Teach Us?
• What state is the market in?
– Early adopter, early majority, late majority, laggards
• What is the competition?
– Actual competitors
– Alternatives to a true solution
• What are customers willing to pay?
• How serious is the need?
• What is the operational cost to adopting your
proposed solution?

8. Takeaway:
Market Validation ensures that you
actually have an opportunity worth
pursuing, and helps you understand
what solution will actually capture
that market opportunity.

9. Customer Development
What does this mean to you?

10. What is Customer Development?
A process for achieving
product-market fit that
helps you to
definitively:
• Define your
customer
• Define your market
state
• Define your go to
market strategy
• Ensure these
definitions are all real

11. Customer Development:
“The Four Steps To Epiphany”
Achieve Achieve
Market Fit Market Dominance

12. Really. What is Customer Development?
• Business Visionary (CEO)
– Customer (Day to day user, Economic buyer, decision
maker)
– Problem / Solution
• Scale of recognition (Latent or Active)
– Impact of pain / Mission Critical?
– How does the customer spend their day now?
• Tech Co-Founder (CTO or Chief Maker)
– Product (Features, Benefits, IP, TCO, Dependency
Analysis)

13. Takeaway:
Customer Development is a
discipline for bringing a product to
the market successfully in a startup.

14. Lean Startup
What does this mean to you?

15. What is a Lean Startup?
A learning
organization, seeking
to discover a working
business model

16. How does a Lean Startup Work?
The Lean Startup Loop

17. Customer Development Engineering
http://www.startuplessonslearned.com/2008/09/customer-development-engineering.html

18. Takeaway:
A Lean Startup is a solution finding
organization, who’s sole purpose is
to validate a business model.

19. Business Model
What does this mean to you?

20. What is a Business Model?
A business model
describes the
rationale of how an
organization
creates, delivers, and
captures value
(economic, social, or
other forms of value).

21. Business Model Canvas

22. Business Model Design + Customer Development

23. Sounds Nice. Here’s Reality
• Startups are hard. It’s REALLY difficult to
actually execute. Don’t ask me why. It just is.
• You will be way better off if you are highly
skilled and experienced in your endeavor than
otherwise.
• Building a quality team is key, and also hard.
A-Level players with good chemistry have the
best chance of winning.

24. More Reality
• You may need money to achieve product-market
fit. Raising money sucks for most of us, and has
nothing to do with innovation or doing great
work.
• Competition validates your market, but can throw
you off your path when you start losing deals to
it.
• Unless you have innovated before and gone
through the pain of mistakes, you will likely make
a lot of them.

25. How to deal with reality
• Lone founder is a tough road. Get a co-founder.
• Get advisors and mentors. You have blind spots.
• Get laser focused on a minimum viable product.
(makes raising money easier when you have
success, or maybe not necessary at all)
• Make goals and measure everything.
• Make sure you can’t not do the startup. It’s the
only thing that will get you through.

26. Practical Application:
• Find a balance of Market Validation & Customer
Development that works for you.
• Check yourself against your Business Model
Canvas.
• Try Squared Circle Agile for Product Development
(I made this crap up).
• Say AAARR! To Determine your MVP.
(Acquisition, Activation, Retention, Referral &
Revenue)
• Be a Data Driven Founder.

27. Squared Circle Agile:
“The Perfect Square Has No Corners” Tao Te Ching 41

28. Product Market Validation as Metrics

29. AARRR Model (Viral, Sticky or Paid)
http://500hats.typepad.com/500blogs/2010/01/startup-metrics-for-pirates-lean-startup-circle-jan-2010.html

30. AARRR Model
http://500hats.typepad.com/500blogs/2010/01/startup-metrics-for-pirates-lean-startup-circle-jan-2010.html

31. Data Driven Startup Philosophy & Framework
The point of testing
is to prove or disprove assumptions quickly
Optimize Your Startup for Learning not Data
Checklist for Data Driven Startup:
★ Operating Dashboard
★ Conversion Funnel Analysis
★ Cohort Analysis
http://www.slideshare.net/dcancel/data-drivenstartups

32. Data Driven Operating Dashboard
http://www.slideshare.net/dcancel/data-drivenstartups

33. Data Driven Conversion Funnel
http://www.slideshare.net/dcancel/data-drivenstartups

34. Data Driven Cohort Analysis
http://www.slideshare.net/dcancel/data-drivenstartups

35. Helpful? Hope So.
Discussion Time.
@marcuswhitney