CDI Founder Workshop Session 4 - Lean Startup Methodologies - Kayla Trautwein- EvoNexus (https://www.linkedin.com/in/kayla-trautwein-b3bbb621) Time/ Date- Nov 8th, 6p-8p Description- Founders often fall into a trap: building a solution for a problem they aren’t sure that their customer really has. With so many options available to consumers, it’s difficult for businesses to stay above the noise. No longer can we ask “Can we build this?” Rather, the question has become “Should we build this?” In other words, “Are we building something that customers really want/need?” After all, the customer is always right. One of the biggest challenges for entrepreneurs is finding product-market fit, and this journey all begins with customer development. The Lean Startup Methodology will teach you best practices in customer development which will lead you to determine whether to 1) improve the solution you have built, 2) change direction (pivot) or 3) abandon your product or service and try something new. With the odds of failure so high for today’s startups, the Lean Startup Methodology offers an essential regimen for failing fast and iterating so that you have a better chance for success. Homework- Watch “The Lean Approach: The Lean Method” with Steve Blank by the Kauffman Founders School. Watch “The Lean Approach: Getting Out of the Building: Customer Development” with Steve Blank by the Kauffman Founders School. Read “Customer Development: What Questions Do You Ask Potential Customers?” Watch “Good and Bad Examples of Customer Interview Questions.” Engagement From the video and blog content, you’ve learned that in order to keep driving your product/service in its current direction you should have some validation from potential customers. In the Lean Startup Methodologies Session we’re going to walk through some sample customer interview exercises to help you think about ways to get closer to product/market fit and give you tools to help determine when it’s necessary to make a pivot. If you don’t currently have a startup you’re working on, no problem. This session will still be beneficial as you think about other applications for customer interviews, whether it’s in your current job or in a networking scenario.

1. Lean Startup Methodologies
November 8th, 2016
Kayla Trautwein
Director & Sr. Portfolio Manager, EvoNexus

2. EvoNexus is a non-profit technology incubator and
hub for Southern California’s startup community
designed to accelerate the growth and success of
entrepreneurial companies.
EvoNexus is community supported and takes zero
equity, or fees from incubating startups.

3. The Problem with Product-Market Fit
One of the biggest challenges for entrepreneurs is finding product-
market fit, and this journey all begins with customer development. The
Lean Startup Methodology will teach you best practices in customer
development, which will lead you to determine learn whether to 1)
improve the solution you have built, 2) change direction (pivot) or 3)
abandon your product or service and try something new. With the odds
of failure so high for today’s startups, the Lean Startup Methodology
offers an essential regimen for failing fast and iterating so that you have
a better chance for success.

4. Customer Validation: A Must Have!
From the video content, you’ve learned that in order to keep building
your product/service you should have some validation from potential
customers. In the Lean Startup Methodologies Session we’re going to
walk through some sample customer interview exercises to help you
think about ways to get closer to product/market fit and give you tools
to help determine when it’s necessary to make a pivot. If you don’t
currently have a startup you’re working on, no problem. This session will
still be beneficial as you think about other applications for customer
interviews, whether it’s in your current job or in a networking scenario.

5. By the end of this session, you should be able to answer the following
questions:
1. What are the do’s and don’ts of customer interviews?
2. How do I know if I’m getting close to product/market fit?
3. What do I do with the information discovered in my customer interviews?
We’ll be testing the following traits:
1. Critical Thinking
2. Creativity
3. Empathy

6. Customer Interview Exercises

7. Misleading Scenario #1
You are speaking with a farmer about a fertilizer you have
developed that will increase their yields by 50%. After
telling them about your product, you ask “Would you use
a product like this?”
What are the problems with this approach?

8. Misleading Scenario #1
You are speaking with a farmer about a fertilizer you have
developed that will increase their yields by 50%. After
telling them about your product, you ask “Would you use
a product like this?”
What types of questions could you ask to understand your
potential customer’s real problem?

9. Misleading Scenario #2
You have developed a new wearable for fitness tracking
that is 10X better and more accurate than FitBit, for
seated exercises called “SitBit.” At a family function, you
interview your grandmother to see what she thinks about
your product. You ask, “How much would you pay for a
product that tracks your fitness while you’re sitting down?
What are the problems with this approach?

10. Misleading Scenario #2
You have developed a new wearable for fitness tracking
that is 10X better and more accurate than FitBit, for
seated exercises called “SitBit.” At a family function, you
interview your grandmother to see what she thinks about
your product. You ask, “How much would you pay for a
product that tracks your fitness while you’re sitting down?
What type of person would be a better customer
interviewee?

11. Now we have some ground
rules…

12. • Know your audience!
• Ex: While friends and family may be your target customer, don’t only
interview those individuals. They are more likely to tell you what you want
to hear.
• Don’t talk about your idea (at the beginning).
• Ex: I have developed this awesome product. Would you buy it?
• Steer away from Yes/No questions.
• Stay away from future hypotheticals
• Ex: How much would you pay for a product that could do X?
• Listen: be genuinely interested in learning what the customer’s problem is.
The more questions you ask, the more a customer will open up to you and
you’ll get insight into what direction to take your product/service.

13. Let’s Practice!

14. You are an architect tasked with building your client’s dream
home. Your role is to ask questions that lead you to find out
what features the home should have without leading the
client to agree to features you propose. Think outside of the
box! For example, don’t ask how many bedrooms the client
wants in their home, try asking about whether they want to
have a family in the future, what size house they grew up in,
etc.

15. But wait…how do I determine
who my customer is and who I
should be interviewing?

16. According to HubSpot…
A buyer persona is a semi-fictional representation of your
ideal customer based on market research and often times real
data about your existing customers. When creating your buyer
persona(s), consider including customer demographics, behavior
patterns, motivations, and goals.
Customer Personas

17. Can you guess whose customer persona this is?
Our customers:
• Do not own a car.
• Do not want to drive themselves to a party or function.
• Like to travel in style and want to be treated as a VIP.
• Want a cost-efficient cab at their doorstep.
Example Customer Persona

18. Why should my customers care
about my product/service?

19. According to Forbes…
In its simplest terms, a value proposition is a positioning
statement that explains what benefit you provide for who
and how you do it uniquely well. It describes your target
buyer, the problem you solve, and why you’re distinctly
better than the alternatives
Value Proposition

20. • Order a driver on demand through your device
• No need to wait for a taxi for long times.
• Free rides on certain occasions and discounts from time to time.
• Prices lesser than the normal taxi fares.
• Tagline says – Your personal driver. It lets customers travel in style.
• Fixed prices for common places like Airport etc.
Uber’s Value Proposition

21. Being a two-sided marketplace (drivers vs. passengers) Uber had to test
demand on both sides. Uber interviewed black car drivers, and the app
in its earliest form started out as a service used by the Founder and his
friends.
Demand grew and grew until they realized they had a service that
solved real pain points for both drivers and passengers, and they were
really able to hone in on their customer persona and value proposition.
Uber Didn’t Grow to a $68B Market Cap Overnight

22. Now, let’s break into groups for some more practice.
First, write a description of your assigned company, create
a customer persona and define the company’s value
proposition to its customer. Then, develop sample interview
questions you could ask your ideal customer to learn

23. GROUP 1: Yelp for vegetarians
GROUP 2: Uber for trucks
GROUP 3: Online platform for finding classical music concerts near
you
GROUP 4: Postmates for pet supplies
GROUP 5: Kayak for engagement rings
Fictional Companies

24. So…what do I do with the
information discovered in my
customer interviews?

25. Learn…measure…build!

26. Sometimes in customer interviews, you’ll discover that your
product/service is missing a key feature or features that your
customer really needs.
Sometimes you’ll discover that your target customer has a
different persona than you imagined.
In any case, you should be learning whether your solution is
solving a real problem felt by your target customer.

27. The more you talk to customers, you understand their
problem and determine how to build or alter your solution to
fit a real need.
Keep learning, measuring and building, and once interviews
are complete you can move on to letting customers use your
product for even more feedback!