Workshop on How to Build a Startup

1. RAOMAL PERERA
raomal@LeanDisruptor.com | @raomal @LeanDisruptor | www.facebook.com/LeanDisruptor
How to Build a Startup
#LEANSTARTUP

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4. www.Facebook.com/LeanDisruptor
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7. Find the Gap
How to find
opportunities that others
don’t see.
- Amy Wilkinson
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8.  Lean Startup Dublin Meetup launched Jan 2012 – now over 1,200
members
 Workshops run by Ash Maurya, John Mullins, Brant Cooper & Raomal
Perera
 Talks on Lean Startup, Social Media, Agile, Fund Raising, How to Build
a Startup, Lego Serious Play, Lean in Corporates, Crowd Funding,
Cartier Women’s Initiative Award (CWIA)
 LeanCamp
Lean Startup Dublin Meetup
http://www.meetup.com/Lean-Startup-Dublin/
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9.  Lean Startup for Enterprise Meetup inaugural meeting Feb 17,
2016 opened by Alex Osterwalder on Value Proposition Design.
 This is a group for enterprises wanting to learn about the latest
concepts and frameworks in business to help them grow.
Some of the topics we will discuss are: Lean Startup, Business
Model Innovation, Design Thinking, Growth Hacking, Innovation
Accounting, Lean Analytics, Purpose Driven Organisation and Social
Media.
NEW: Lean Startup for Enterprise Meetup
http://www.meetup.com/Lean-Startup-for-Enterprise/
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10. Lean Launchpad Programme
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Entrepreneurs Create Jobs – Can We Help
Them Increase Their Chance Of Success?

11. Lean Launchpad programme – (elements)
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12. Playing Lean – The Board Game
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Google Trends
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What is the single
most important thing
you want to take
away by the end of
the day?

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OBSERVING & ASSOCIATING

18. How breakthrough ideas emerge from
small discoveries
Creative thinkers practice a set of simple but
ingenious experimental methods
• failing quickly to learn fast
• tapping into the genius of play
• engaging in highly immersed
observation
Free their minds, opening them up to making
unexpected connections and perceiving
invaluable insights.
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20. Often (first-time) entrepreneurs feel that
step 1 involves writing a business
plan/building a slide deck and getting
funded!
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21. What is a Startup?
A TEMPORARY organisation
DESIGNED to SEARCH …….
For REPEATABLE and SCALABLE
Business Models
Startups are NOT just SMALLER versions of a LARGE
Company
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PITCHING YOUR IDEAS

23. You have the awesome solution
“Your Solution Is Not My Problem”
Source: Dave McClure
…. to a problem that does not exist.
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24. The Problem / Need Statement
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Finding the Problem is the Hard Part
– Kevin Systrom & Mike Krieger (Instagram
Co_Founders)
Instagram Co-Founder Kevin Systrom believes building
solutions for most problems is the easy part; the hard part is
finding the right problem to solve. Here he opens up about
how he and fellow Co-Founder Mike Krieger identified the
problems they wanted to solve around sharing photos through
mobile devices. He also reminds entrepreneurs to embrace
simple solutions, as they can often delight users and
customers.

26. Pivot
SEARCH EXECUTE
Customer Development
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27. Problem/
Solution Fit
Product/
Market Fit
Scale
The 3 Steps
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29. Key Question: Do I have a problem worth solving?
Who has the problem?
What is the top problem?
How is it solved today?
Where do they have the problem or in what context do
they have a problem? (milkshake example)
When do they have the problem?
Why is it a problem? (root cause analysis. Why is the
single best word for creating value in a start-up and an
established business) - It is not possible to know what the
top problem is without knowing where, when and why
they have a problem. Also the questions may not be
answered in sequence e.g. will we find the problem and
the person with the problem at the same time?
Identify the Problem
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30. Take a stab at defining the solution
Build a demo (MVP)
Test it with assumed customers
Will the solution work? (can the proposed
solution create customer value that exceeds the
cost to produce and deliver the solution to the
customer)
Who it the early adopter?
Does the pricing model work?
Define the Solution
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31. Build an MVP
Soft launch to early adopters
Do they realise the unique value proposition
How will you find enough early adopters to support
learning?
Are you getting paid?
Analysis: There needs to be a bit of intuitive thinking
around the MVP. We need to ask and then guess how we
can create the most unique customer value in the shortest
amount of time with the least resources. With a bit of
thinking and an equal amount of action we have a chance
of appropriating real value in the short term
VALIDATE THE QUALITATIVELY
Validate Qualitatively
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32. Launch your refined product to a larger audience
Have you built something people want?
How will you reach customers at scale
Do you have a viable business?
Analysis: A refined product needs to test both
qualitatively and quantitatively in order to find out
why the refined product creates customers’ value
and how large is the market potential?
Can this business produce (organically or through
investment) enough cash in the short term in order
that customers value - cost to produce = profit
Validate Quantitavely
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MINIMUM VIABLE PRODUCT (MVP)

34. MVP
A Minimum Viable Product (MVP) is
“that product which has just those
features and no more that allows you
to ship a product that early adopters
see and, at least some of whom
resonate with, pay you money for, and
start to give you feedback on”
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35. MVP #1 Explainer video
Explainer video is a short video that explains
what your product does and why people should
buy it.
A simple, 90 seconds animation is sufficient.
e.g. Dropbox
How to make an explainer video
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36. MVP #2 A Landing Place
A landing page is a web page where
visitors “land” after clicking a link from
an ad, e-mail or another type of a
campaign.
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37. MVP #2 A Landing Page
• Craft your Landing Page
• Set up a Google AdWord campaign and drive traffic
to your new landing page. Even here you can let the
AdWord engine rotate different messages and test
what works best on your prospects
• Set up Google Analytics. The most important thing to
measure is conversions – percent of visitors that sign
up (or perform another desired action)
• Set up a chat to make it easy for the visitors to raise
questions
• Set up a service like Qualaroo to survey your visitors
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38. MVP #3 Wizard of Oz
A “Wizard of Oz” MVP is when you put up a
front that looks like a real working product, but
you manually carry out product functions. It’s
also known as “Flinstoning”.
Zappos shoes is the biggest online shoe
retailer, with annual sales exceeding $1 billion.
In his Lean Startup book, Eric Ries describes
how the founder started with a Wizard of Oz
product.
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39. MVP #4 The Concierge MVP
Instead of providing a product, you start
with a manual service. But not just any
service! The service should consist of
exactly the same steps people would go
through with your product.
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40. MVP #5 Piecemeal MVP
This strategy is a blend between the “Wizard of
Oz” and “Concierge” approaches. Again, you
emulate the steps people would go through
using your product – as you envision it.
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41. MVP #5 Crowd Funding
Sell it before you build it.
The basic idea is simple: launch a crowd
funding campaign on platforms such as
Kickstarter or IndieGoGo.
Not only will you validate if customers want to
buy your product, but you will also raise
money.
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45. Problem/Solution
Fit
Product Market
Fit
Scale
Focus: Validated
Learning
Experiments: Pivots
Focus: Growth
Experiments:
Optimisations
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46. Traction is a measure of your product’s engagement
with its market. Investors care about traction over
everything else.- Nivi and Nival, Venture hacks
Problem/Solution
Fit
Product/Market
Fit
Scale
Ideal
time to
raise
money
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47. “Studies comparing successful and
unsuccessful innovation have found that the
primary discriminator was the degree to
which the user needs were fully
understood.”
– David Garvin, Harvard Business School
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CUSTOMER INTERVIEWING

49. ABC
ANN
APPROACHED
THE BANK 121314
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50. You may have jumped to the
“ABC” or “12 13 14” or “financial
institution”
Conclusions
Without EVEN KNOWING or
CONSIDERING alternatives!
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51. I force you to use your
rational brain only?
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52. What is 17x24?
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53. Our subjective judgements are
biased: we are far too willing to
believe research findings based
on inadequate evidence and
prone to collect too few
observations in our own
research
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Knowledge is having the right answer.
Intelligence is asking the right questions
The Art of Customer Interviewing

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BUSINESS MODEL INNOVATION

57. What is a business model?
A business model describes the rationale
of how an organisation Creates, Delivers
and Captures value
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58. Why we need a shared language for
business models?
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https://strategyzer.com/academy/cours
e/business-models-that-work-and-
value-propositions-that-sell/1/1
Note: You may need to license the online learning tool on Strategyzer to
view this clip from Osterwalder

59. Use of BMC in Established Companies
IMPROVE ----------------------------------INVENT
Know Problem/Know Solution -Unknown Problem/Unknown
Solution
------EXECUTE -------------------------SEARCH------------
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60. Business Model Innovation
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61. Business Model Innovation
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“It is not the strongest of the
species that survive, nor the
most intelligent, but the one
most responsive to change.”
- Charles Darwin

63. Getting from Business Idea to Business Model
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65. Nespresso’s Business Model
What is Nespresso’s Business Model? What
made them so successful?
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66. Getting started with the canvas
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67. Best Practices
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68. Group Exercise: 20 Mins
Develop a BMC using an A1 canvas
poster.
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69. Strategy for Startups
• Planning before the Plan
• Use the Osterwalder Canvas to do two things:
– Organise our thinking
– Get out of the Building to turn the hypothesis into
facts
• SEARCH for the Business Model First and then
Write it Up (Business Plan)
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70. Customer Development Process
Post it to the Wall
 Create the canvas
 Make it visible
 Use Yellow Post-It
notes with your
guesses
Get out of the building and test your hypotheses.
There are NO FACTS here. Talk to customers, partners,
vendors. Design experiments, run tests,
get data
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71. Customer vs. Product Development
• More startups fail from a lack of
customers than from a failure of Product
Development.
• We have all the processes to manage the
Engineering Risk
• No processes to manage the Customer
Risk.
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72. Customer Development Manifesto
1. There are No Facts Inside Your Building, So
Get Outside.
2. Pair Customer Development with Agile
Development
3. Failure is an Integral Part of the Search
4. Make Continuous Iterations and Pivots
5. No Business Plan Survives First Contact with
Customers. So Use a Business Model Canvas
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73. Customer Development Manifesto
6. Design Experiments and Test to Validate Your
Hypotheses.
7. Agree on Market Type. It Changes Everything
8. Startup Metrics Differ from Those in Existing
Companies
9. Fast Decision-Making, Cycle Time, Speed and
Tempo
10.It is All About Passion
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74. Customer Development Manifesto
11.Startup Job Titles Are Very Different from a
Large Company’s.
12. Preserve All Cash Until Needed. Then Spend
13.Communicate and Share Learning
14.Customer Development Success Begins With
Buy-In
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75. Hypotheses or Guesses
The canvas is a set of hypotheses, i.e. guesses
It helps us to organize our thinking! It is not
about functional organisation, but about the
business
The real question is HOW do we change those
guesses into FACTS?
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76. Customer Archetypes
Meet Paul, Sheetal and Barbara
Paul-RegularExerciser
• 20 – 45
• Aim to maintain and
track active lifestyle
• Looking for
inspiration on diet &
exercise regimes
• Gets a buzz from
exercising
Sheetal-SpiritualHealth
•
• 30 – 55
• Already follows a
healthy lifestyle
• Interested in
alternative
medicines/
treatments
• Believes eating well
is as important as
exercise
Barbara-On-OffDieter
•
• 30 +
• Yo-yo dieter, has
tried many of the fad
diets but never stuck
to one
• Needs tips and
motivation to keep
up a healthy lifestyle
• Irregular or
infrequent exerciser
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77. Strategy and Business Models – DIT PM Module 1 77
VALUE PROPOSITION CANVAS

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79. 79
Observe

80. Clayton Christensen
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Jobs to be Done
“If you understand the job,
how to improve the product
becomes just obvious”

81. “People buy products and services to get jobs
done. As people complete these jobs, they
have certain measurable outcomes that they
are attempting to achieve. It links a company's
value creation activities to customer-defined
metrics.” - Ulwick
OUTCOME-DRIVEN
INNOVATION
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89. The Environment https://strategyzer.com/projects/aca
demy/business-model-environment
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90. Case Study: Owlet
Owlet Infant Health Tracker Takes The Wearable
Revolution Into The Crib
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Note: You may need to license the online learning tool on
Strategyzer to view this clip from Osterwalder

91. Review
–First Identify the problem and then define the
solution. Not the other way around.
–Find the Gap
–If you understand the job, how to improve the
product becomes obvious
–The BMC is a shared language for business
modelling. Use the template to change your
guesses to FACTS.
–Never underestimate the power of
networking
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92. “There are no
shortcuts to any
place worth going”
– Beverly Sills

93. Strategy and Business Models – DIT PM Module 1
raomal@LeanDisruptor.com | @raomal @LeanDisruptor | www.facebook.com/LeanDisruptor
RAOMAL PERERA
THANK YOU!

94. 94
APPENDIX

95. Relevant Blogs
Alex Osterwalder -
www.alexosterwalder.com
Business Model Generation
 www.businessmodelgeneration.com
Steve Blank – www.steveblank.com
Ash Maurya – www.leanstack.com
Eric Ries - www.startuplessonslearned.com
John Mullins – www.getting-to-plan-b.com
Raomal Perera – www.LeanDisruptor.com

96. Books
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97. Additional Resources
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Books:
What Customers Want – Using Outcome-
Driven Innovation to Create Breakthrough
Products and Services – Ulwick
Lean Analytics – Croll & Yoskowitz

98. Additional Resources
98
BMC Online Tools:
Strategyzer
https://canvanizer.com/ (free tool)
BMC tool for educators:
Launchpad Central offers end-to-end solutions to
validate business hypotheses, testing for value and
accelerating time to market.

99. Additional Resources
99
Stattys Notes; http://www.stattys.com/
- A new generation of adhesive notes with a unique "Write
and Slide" function.
Mapping the business model design space

100. Additional Resources
100
Video creation tool: Videoscribe
Business Modelling card decks:
www.amazon.com

101. 101
BMC ADDITIONAL SLIDES

102. 102

103. “No one cares how much you know, until
they know how much you care”
– Theodore Roosevelt
EMPATHY MAPS
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104. 104
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105. “People buy products and services to get jobs
done. As people complete these jobs, they
have certain measurable outcomes that they
are attempting to achieve. It links a company's
value creation activities to customer-defined
metrics.” - Ulwick
OUTCOME-DRIVEN
INNOVATION
105

106. Key Value Proposition Questions
• Problem Statement: What is the problem?
• Ecosystem: For whom is this relevant?
• Competition: What do customers do
today?
• Technology / Market Insight: Why is the
problem so hard to solve?
• Market Size: How big is this problem?
• Product: How do you do it? 106

107. • Problem Statement: Net security without a CTO
• Ecosystem: Small banks under FDIC pressure
• Competition: Expensive, Custom or DIY
• Technology / Market Insight: Small Companies
without Big Resources…Fines getting bigger
• Market Size: 9000 little banks, 5000 + more
• Product: perimeterusa.net
Example
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108. © 2004 Valista Ltd. confidential information.108

109. Through what
mechanism
will your service
(product) be
delivered to your
client?
How will we GET,
KEEP and GROW
Customers? How will I
get the Value
to my
Customers?
How best to
communicat
e to each
customer
segment
Channels & Customer Relationships
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110. Two Critical Channel Questions
How do you want to sell your product?1
is subtle, but more important than the first:
How does your customer want to buy your
product?
2
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111. Physical Channels
© 2012 Steve Blank
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112. Web Channels
© 2012 Steve Blank
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113. Customer Relationships
Physical & Web Mobile Are Different
© 2012 Steve Blank
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114. © 2012 Steve Blank
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115. © 2012 Steve Blank 115

116. © 2012 Steve Blank 116

117. © 2012 Steve Blank 117

118. © 2012 Steve Blank 118

119. 119
WORKSHOPS

120. Fund Raising for Entrepreneurs
120

121. Building Emotional Capital for Leadership
121

122. Business Model Innovation
122

123. How to Build a Startup
123

124. Strategy and Business Models – DIT PM Module 1
raomal@LeanDisruptor.com | @raomal @LeanDisruptor | www.facebook.com/LeanDisruptor
RAOMAL PERERA
THANK YOU!