1. Lean 101
@rafaelbalbijr//rafael@leanstartupmachine.com
Thursday, January 31, 13

2. Thursday, January 31, 13

3. About Me
Rafael Balbi On twitter @rafaelbalbijr
• Lean Startup Machine Director of Operations
• Helped a VC raise 5MM USD
• Skillshare Master Teacher on Lean // Business Models
• Founder of not 1 but 2 failed startups
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4. Singapore
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5. Santiago
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6. Sao Paulo
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7. London
Sydney
Beijing New York
San Fran
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8. 200 WORKSHOPS IN 2013
New York Philadelphia San Diego Shanghai Moscow Riyadh
Boston Los Angeles Toronto Karachi Tel Aviv Sao Paolo
Chicago Washington DC Montreal Lahore Milan London
Austin San Francisco Tokyo Dubai Amsterdam
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9. Making Sh* Happen
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10. Funded Startups
Instacanvas
Borrowmydog.gy
Branch.com
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11. LET’S
ADVANCE THE
SCIENCE OF
ENTREPRENEURSHIP
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12. Let’s break some ice
About Me//About You
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13. The Abyss
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14. Lean
I will code
I will get funding,
I will write a business
plan
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15. Don’t be a super hero
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16. There’s an easier way
A Startup, is a human institution designed to
create and build new products and services
under conditions of extreme uncertainty…
– Eric Ries
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17. Lean is about...
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18. Experiment - An operation or procedure carried out in
order to discover and test
Planning - A detailed proposal for doing or
achieving something.
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19. Experimenting vs Planning
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20. Thursday, January 31, 13

21. What is “waste” in a startup?
• Building the wrong thing
• Pre-mature optimization
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22. Successful startups pivot
• YouTube, Facebook, PayPal
• Twitter, Instagram
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23. Make data-driven decisions
• Increase team transparency
• Move faster
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24. Build//Measure//Learn
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25. Some Context
Day Month Year
No.
Who are our Key Partners? What Key Activities do our Value Propositions require? What value do we deliver to the customer? What type of relationship does each of our Customer For whom are we creating value?
Who are our key suppliers? Our Distribution Channels? Which one of our customer’s problems are we helping to solve? Segments expect us to establish and maintain with them? Who are our most important customers?
Which Key Resources are we acquiring from partners? Customer Relationships? What bundles of products and services are we offering to each Customer Segment? Which ones have we established?
Which Key Activities do partners perform? Revenue streams? Which customer needs are we satisfying? How are they integrated with the rest of our business model?
How costly are they?
What Key Resources do our Value Propositions require? Through which Channels do our Customer Segments
Our Distribution Channels? Customer Relationships? want to be reached?
Revenue Streams? How are we reaching them now?
How are our Channels integrated?
Which ones work best?
Which ones are most cost-efficient?
How are we integrating them with customer routines?
What are the most important costs inherent in our business model? For what value are our customers really willing to pay?
Which Key Resources are most expensive? For what do they currently pay?
Which Key Activities are most expensive? How are they currently paying?
How would they prefer to pay?
How much does each Revenue Stream contribute to overall revenues?
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26. What a VC taught me..
Concept Phase Execution Phase
Value Prop// //Management
Customer Segment// //Systems
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27. Lean Business Models
Get to your first sale as quickly as possible!
Break it! -> Push
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28. Build//Hypothesize
• What’s your idea/
problem that you
want to solve?
• Customer?
•
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29. Measure//Test
Customer Development -
Get out of the building
Putting what we’ve built in
front of people
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30. Learn//Iterate
Gain Knowledge
Implement
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31. Build//Measure//Learn
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32. MVP
• The minimal amount of effort you have to exert to
complete one turn around the Build-Measure-
Learn loop. - Eric Ries
• MVP ≠ functioning product
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33. MVP
• MVP = Minimal Viable Experiment
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34. Goals of MVP
Maximize Learning
Minimize opportunity cost
Rapid Testing + Iteration
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35. Types of MVP
Exploration
Pitch
Concierge
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36. Thursday, January 31, 13

37. Exploration
An interaction with customers
problems to understand behavior
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38. Pitch
Working towards a solution
Pitching the customer on a solution with the
intent of gaining back some form of validation
(email signup, cash, letter of intent)
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39. Pitch
1. Decreasing Discount
2. Meta
3. Innovator
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40. Thursday, January 31, 13

41. Thursday, January 31, 13

42. Concierge
Manually delivering on the solution
Minimal code, pulling+pushing levers
No automation
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43. Concierge
1. One use case
2. Real life simulation
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44. Customer Development
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45. Customer Development is the process
by which we go out and test our
hypothesis and assumptions
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46. Customer Development…
1. Sucks…it hurts, a lot
2. Is the cornerstone and key of LEAN
3. Lot’s of Cust Dev Leads to Results
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47. When is enough, enough?
Look for a Pattern
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48. CUSTOMER
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49. Persona Development
Project Name: Team Leader Name: Experiment #:
Person Pain
Factual information State the problem you believe
about your target customer. your target customers have,
that your solution solves for.
Behavior Goals
Existing behavior they exhibit now, What goals are they trying to accomplish
because they don’t have your solution. through the behavior, that your solution will do better?
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50. Get Out of the Building
“No business plan survives
first contact with customers.”
- Steve Blank
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51. What’s the point?
• Uncovers how users think and behave
• Validates assumptions/removes bias
• Shows difference between intent and reality
• Provides direction and data instead of opinion
or speculation
• Provides the ability to inform design
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52. It is NOT
• Multiple Choice Surveys
• Focus Groups
• Your Personal (Biased!) Experience
• Conversations with Friends
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53. Effective Interviewing
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54. Go in with 2 to 3 objectives
and have a real conversation.
Brant Cooper
Know your goals and questions.
Giff Constable
Use a script.
Ash Maurya
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55. No Selling Allowed
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56. 3 Point Interview
1. Do You {insert problem}
2. Tell me a story about the last time you dealt with
{insert problem}
3. What’s your ideal solution for {insert problem}
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57. Track Data
• Write everything down RIGHT after
• Set up time to evaluate data
• Have one location where everything is
stored
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58. Validation
Board
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59. Thursday, January 31, 13

60. Thursday, January 31, 13

61. “A startup’s runway is the number
of pivots it can still make.”
-Eric Ries
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62. GOAL: Decrease Cash Spent
Between Pivots
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63. GOAL: Decrease Cash Spent
Between Pivots
PRODUCT =
EXPERIMENT
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64. GOAL: Decrease Cash Spent
Between Pivots
PROGRESS =
PRODUCT =
VALIDATED
EXPERIMENT
LEARNING
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65. Ok...so?
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66. What a VC taught me...
VC’s invest to get a return
on $$$
-want $ back w/ i*
Raise skillset...lessen
risk...raise probability of
funding
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67. Business Models
Concept Phase Execution Phase
Value Prop// //Management
Customer Segment// //Systems
want to get out of concept phase as
quickly as possible. business become
profitable at SCALE
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68. Ok...so?
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69. 3D printing - will do to hardware
what the internet did to software
Nanotech Singularity Robotics
Africa/China/Brasil/
India
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70. leanstartupmachine.co
m
validationboard.com
rafael@leanstartupmachine.com
@rafaelbalbijr
Thursday, January 31, 13